Tuesday, December 20, 2016

Markets in Christmas mini-rally mode

Surprisingly, Wall Street shows that it still has the strength to overcome events such as the lamentable terrorist attacks of yesterday in Ankara and Berlin. A slight fall was expected today (SPX +0.28%), but the markets and sectors, despite being almost all of them in overbought and with the VIX close to annual minimums, continue to rise. I understand that it is the usual Christmas mini-rally.


Europe and Asia are not far behind and also continue to rise several days ago. And since this is a week, there are few economic events and generally lower volume of transactions, this bull trend is expected to continue, at least until the end of the year, and then inevitably correct in the first days from January. The 2015 was like this, with a January of precipitous falls, which made presage a major correction that finally did not happen.


Watchlist Update for Christmas


In this section I will leave tips, ideas and links of stocks, etfs and sectors taken from my weekly watchlist, all in tweet mode. It seems to me a more agile way to leave data.


 - Nike NKE earnings on Tuesday, up +1.49% at the moment, after a difficult 2015 unlike its competitors.

All 2016 falling Nike, even with the Social Sentiment at a minimum. The MACD today in turn exceeding the average (dotted line) plus a good earning, could mean its recovery and a good 2017.

- The Mosaic Co. MOS has acquired the Brazilian fertilizer giant Vale VALE, at $2.5B with the clear intention of facing Monsanto MON, today merged with Bayer. It is interesting this sector, it is expected to increase these days its volatility. 

- The banking sector XLF seems to be taking a second look after Trump's triumph. Other analysts believe that their rally is just beginning. In the long term, I think it is a buy, backed by the FED's 2017 plan, which is clearly strong for the dollar and the banks.


- An excellent news for the Peruvian stock market IGBVL, always so slow and heavy: from next year it will be possible to make electronic commerce of shares via internet. It was necessary to take measures so as to make it more dynamic.


- This week the Deutsche Bank DB must resolve the claim with the US Department of Justice. If a resolution that reduces the amount of the same, today at $14.5B, the stock can go to the clouds, taking into account that it is the favorite bank of Trump.

- And Nvdia Corp NVDA continues its unstoppable rally that started this year, almost 280% up. He overcame the important psychological barrier of $100, and against all odds he seems to continue his rise in 2017. He managed to overcome the slight pullback two weeks ago and continues with strength. The same cautiously took this stock because I estimate its rise too high and has again entered into overbought territory.


 - The VIX volatile index or Fear Gauge, is at its lowest levels of the year, below $11.50, so I try to be cautious with longs in these times. As I wrote above, I speculate that the rally may end at the end of the month. See in the chart what happened with the market, index SPX, the last time the VIX reached the levels of today: its correction was shocking. Here is an excellent article on how to trade with volatility through etfs such as VXX, or the one that goes to triple speed UVXY.


The VIX in August 2015 levels. This indicator has the property of returning to its average, if or if, sothat its upward correction should be expected soon, which may or may not be dramatic as it was last year.
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