Market Updates

Comparing the VIX Index level to its average price range is helpful in identifying whether VIX is “high” or “low” and can provide indications of what the market is predicting about future prices. Generally, a rising VIX indicates Market weakness and a declining VIX indicates the Market is strengthening. When the Coronavirus began accelerating the Market declined and the VIX Index climbed to a high of 85.47. The VIX has been at higher levels then average since the Coronavirus. The VIX Index is also referred as the Fear Index. The VIX Index will rise because of news events, economic events, during earnings season and during political events, such as the Presidential Election.

The market found support and is now moving higher again. It looks as if it wants to get back to the all-time that the Nasdaq 100 EFT hit at 303.50 on September 2nd before the sell-off. With all that is happening in our country it is surprising that the markets are showing so much continued strength. Could the strength be due to the renewed hope for an additional stimulus package?

The NASDAQ 100, which is tracked buy the Exchange Traded Fund symbol QQQ, hit an all-time high at 303.50 on September 2nd. Since then it has declined 11% as of Friday’s close. The run up to the highs was very strong. But what happens now?

What Is Sector Rotation and Style Rotation?

As explained on Investopedia.com: “Sector rotation is the movement of money invested in stocks from one industry to another as investors and traders anticipate the next stage of the economic cycle. Various sectors, or industries… thrive or languish depending on the cycle.” One can find charts on the internet that show sector rotations during economic cycles. Some Traders believe the economy moves in reasonably predictable cycles. The major sectors are Finance, Technology, Consumer Discretionary, Industrials, Materials, Energy, Consumer Staples, Health Care, Utilities, Metals and Mining, Biotech, Telecom, Home Construction, Retail and Real Estate. Style Rotation is comparable Sector rotation. Style Rotation is based on a company’s Market Capitalization. It is based on Mega Cap, Large Cap, Mid-Cap, Small Cap and Micro-Cap companies. Many traders follow both Sector and Style rotation.

Date: July 11, 2020 The chart below is the Nasdaq 100 Exchange Traded Fund (QQQ) which continues to lead the S&P-500 and Dow Jones Industrial Indexes. The QQQ’s are over 10% over the February 19, 2020 high, while the S&P 500 and the Dow Jones Industrial...

June 6, 2020 I will start with - Retirement Information What is the SECURE Act? The Setting Every Community Up for Retirement Enhancement (SECURE) Act, passed into law December 2019 and includes many reforms expanding access to workplace retirement plans for millions...

May 8, 2020 What a change one month can bring! Today I am starting off with informational links to assist clients and those of you who are Small Business owners. If you qualify for the IRS Tax relief check and haven’t received your payment check out this link:...

4/5/2020 I hope everyone is healthy and staying out of harm’s way. To begin I am going to examine what the technical traders are discussing regarding the Markets. Specifically, the S&P 500 index. The Chart above is of the E-mini S&P 500 Index on a 10-year...

March 16, 2020 The mounting coronavirus concerns and the oil war between Russia and Saudi Arabia gave another black eye to the stock market this past week. Three “circuit breakers” were hit this week. On Monday and Thursday this week “limit down” trading caused...

February 12, 2020 The coronavirus has infected tens of thousands, has closed China’s businesses, grounded flights and killed over 1,000 people so far. Most economists believe China faces an economic shock that will be felt around the world. In the past the SARS virus...