Monday certainly has been a poor start to the week. On the other hand, considering all the geopolitical events, perhaps it is more surprising the markets are not lower. The day started with Fed President Bullard once more calling for a jump to interest rates. That helped to get stocks lower. If he says it often enough though, the impact to stocks may become less. Let’s take a look mid-afternoon at where markets are standing.
Afternoon Stats And Outlook
All indexes are lower and will close in the red.
New York / S&P
The S&P is down 36 points and below the 200 day moving average. A morning rally was poor but enough to buy SPY put options as outlined in the stock market outlook last night and the morning Investing Strategy Notes for today before the open.
There are 40 new 52 week highs and 573 new 52 week lows. Very bearish. 76% of all trading volume is to the downside and 72% of all stocks are falling.
NASDAQ
The NASDAQ is down 27 points and doing better than both the Dow Jones and S&P index.
New 52 week lows are 360 against 37 new highs.
57% of all volume is being traded lower while 58% of all stocks are falling.
TSX Composite Index – Canadian Stock Market Outlook
The TSX Composite Index which last week held up very well today is down 206 points mid-afternoon. The index has struggled to stay above 21,000 and it definitely appears the index will move below it again this week. I bought 400 shares of HXD today but honestly this is a terrible ETF for trading. Despite this, there isn’t a lot of choice for the TSX.
Volume is slightly above average at 289 million shares traded.
69% of all volume is being traded to the downside.
66% of all stocks are falling.
There are just 19 new 52 week highs and 115 new lows.
Morgan Stanley Analysis – Bear Market
Morgan Stanley analysts declared stocks are in a bear market. That report came from Michael Wilson who is a known perma-bear but that’s his opinion.
Outlook
More downside to end the day. I am holding SPY put options for into the close. If I am wrong, I will hold them into Tuesday. I think there is a good chance we will see the lows of January 24 retested, especially if there is an invasion of Ukraine. At present it seems more like Putin is just keeping everyone on edge. That can change quickly. Holding put options on the SPY ETF out a couple of weeks is a good way to provide some profits for a downturn.
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