Friday, March 13, 2015

Week In Review (3/9 - 3/13)

We finished the week with all indices finishing deeply in the red but a late day rally did help soothe some of the pain. What remains is a challenging and volatile market with wild swings back and forth based on a multitude of factors and excuses.  Investors are hearing daily chatter about the strength in the dollar, weakness in the Euro, oil prices, earnings and now Putin's health. The one common theme is they are all excuses and no one knows where the market is going.   A current snapshot of the S&P displays the type of uncertainty that leads to choppy markets. 

In an effort to see where money is flowing on a weekly basis we like to look at simple weekly performance metrics of certain sectors, industries, countries, and market caps.  A simple bar chart from Finviz presents an easy comparison.  We can gather a few facts from the two charts below.  Money continues to chase anything health care related while the utilities have stabilized after a few rough down weeks.  Basic materials were hit the hardest by a wide margin.  If we switch to weekly performance sorted by market cap, large caps have been sold more aggressively than their small cap peers.  What's learned from this quick exercise?  The strength of the dollar is continuing to dominate the macro landscape as bigger cap names that have multinational exposure are showing more weakness.  In the meantime money is hiding in smaller domestic ideas.  Dr. Steenbarger touched on this topic in an earlier blog post. 


We are still slightly oversold at current levels.  And considering how weak the markets reacted yesterday after Thursdays rally, some areas may need to be breached to the downside in order for a sustainable bounce to happen.

Our favorite reads from the week:

Today's fun fact is from   

Today is the worst Friday 13th for since -1.25% in April 2012. Worst Friday 13th ever was -6.12% in Oct 1989.

-Raymond James with comments on Thursday's strong bounce

-Some commentary on the US Dollar's rise and the impact on the stock market

-There's been some interesting debate recently on whether or not cash should be considered an asset class

-Fidelity's Jurrien Timmer on what could push stocks higher

Have a great weekend!

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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