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发帖数: 1691 | 1 Stocks Stage Positive Reversal, Wiping Out Early Losses
By PAUL WHITFIELD, INVESTOR'S BUSINESS DAILY
Posted 10/16/2014 07:08 PM ET
Stocks made several U-turns Thursday, eventually closing just above the
break-even line.
The Nasdaq and S&P 500 edged up fractionally. The IBD 50 popped 1.5%.
Volume fell across the board.
The indexes were sharply negative until Federal Reserve non-voting member
James Bullard said the Fed should delay the end of its bond-buying program,
set to conclude this month.
While the market welcomed the news, IBD-style investors would be prudent to
keep their cash on the sidelines. The market remains in correction.
The correction has dipped as much as 11% on the Nasdaq, its sharpest
pullback since a 12% retreat in 2012, and there's no guarantee that the low
has been set.
Reactions to Q3 disappointments have been at times vicious, underlining the
dangers of this market.
For instance, Netflix (NASDAQ:NFLX) slid 19% on Q3 results. Earnings topped
views, and revenue was in line with expectations. However, subscriber gains
and guidance were weaker than expected.
In a healthy market, misses don't usually lead to 19% price drops in a
single day.
When the indexes finally begin to string together some up days, resist the
temptation to jump back in too early.
"Too early" means buying before a follow-through day confirms that an
uptrend is underway.
In ugly markets like this one, consider what might help turn the market
around.
Here are three factors to weigh:
•Gasoline prices have dropped sharply. Research shows that consumers
spend more on discretionary items, such as eating out, when gas prices are
low.
Gas prices began to fall in late June. Restaurants were No. 100 of 197
industry groups at the end of June. As of Thursday's IBD, the restaurant
group was No. 15.
•Elections in Brazil and the U.S. midterm elections loom. Politics are
cyclical. In the past six years or so, leftists have prevailed (Barack
Obama in the U.S., Francois Hollande in France, Dilma Rousseff in Brazil).
But India elected a pro-business candidate in May. If Brazil does the same
Oct. 26 and pro-business U.S. congressional candidates prevail Nov. 4, it
could be a sign that a pro-business cycle is under way.
•The Federal Reserve will meet Oct. 28-29. Market watchers will zero
in on that meeting, particularly in light of Bullard's comments Thursday.
Read More At Investor's Business Daily: http://news.investors.com/investing-the-big-picture/101614-722184-stocks-stage-positive-reversal-wiping-out-early-losses.htm#ixzz3GPvdIeL9
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