Sunday, March 8, 2015

Week in Review (3/2 - 3/6)

The market remains in a long term up trend but if you look at the Nasdaq when it becomes stretched to the upside it has looked to consolidate or pull back.  If we take a simple moving average envelope looking for overbought levels we are able to see this.  This helps to back up the idea that buying strength has had its limitations in this market. 

Take a look back to 2013 when we started this most current climb higher.  If we take a 5% envelope of the 50 day moving average we can see the support and resistance.  We're currently coming off overbought levels as we had spent some time at the upper envelope. The pullbacks and consolidations have ranged from boringly mild to rather violent.  Trying to predict what will happen is a fools game.  But keeping these levels accounted for is a good exercise in evaluating the day to day market. 

Some worrisome aspects of this market are a potential failed breakouts of the S&P 500 and NYSE Composite.

One of our go-to blogs, Dr. Brett Steenbarger's TraderFeed, gives a good snapshot of current market conditions.

Below are some of our favorite reads from the week past:

-361 Capital Weekly Research Briefing

-Market Insight from Schwab

-Owning Bonds in a Rising Rate Environment

-One of Our Weekly Faves, Raymond James' Jeff Saut

Have a great week ahead and happy daylight savings.  Spring is near!

Ryan Worch is the Managing Director of Worch Capital LLC. Worch Capital LLC is the general partner of a long/short equity strategy that operates with a directional bias and while emphasizing capital preservation at all times.

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