There have been a lot of mixed signals in the market about
whether this correction is wrapping itself up or if its just
getting started. Let's go through a few of the things that
I have seen and see if we can come to a consensus over what is
going to happen over the next few weeks.
First we have retails sales coming in almost a little better
than expected. The Wal-Mart issue was leaked so that helped
when they said that there was still time to get the quarter in
order. Other signals. like the rumors of Best Buy laying
off and closing more stores give the opposite felling to
Next there is the increased volatility in the market.
This could point to lower prices in the near future, but
Tracey pointed out that when the VXX, an ETN that tracks the VIX,
is trading at all time high volumes that could mean that its time
to think about what that says.
Then there is the idea of options activity increasing as cash
generators continue to look to write calls or sell puts in order
to squeeze some more money out of their current positions.
Those income chasers are really getting hurt here on the
increase of volatility of late, so will they continue to chase
stocks if they run up and away from them after seeing their
shares called away.
Finally we have the cash pinch going on. The increased
taxes are eating away at disposable income and the high price of
gasoline is also doing a number on the pocket book of middle and
lower class Americans. That lack of cash is not going to
help things along.
That all being said, do you see the market moving higher or
lower over the next few weeks? And which of these items (or
any other ones) can you point to that support your argument?
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