Monday, November 23, 2015

Thanksgiving Markets

Trading resumes on the last full week of November with one of the biggest retail days in sight. After Thanksgiving feasts in the United States, consumer, both online and off, will spend copious amounts of money trying to capitalize on their favorite stores' sales. Like a proverbial"run of the bulls" at Pamplona, hordes of people will wake up early just to partake in the opening of the most robust season of spending in the world, the road to Christmas. Just like those charging bulls in Pamplona, investors will tend to trade in an uptrend as many sectors feel a boost of demand. While prospects for consumption are sure to increase going into December, trading sentiment is currently dragged down by bearish energy shares. Therefore, we should see a lot of flat movement as buying and selling in the overall market will be about equal. individual industries might experience different trends, but broad-based gains and losses should cancel any clear trend through the rest of November and possibly December. Today's trading represents the equilibrium that I am predicting. Earlier in the session the S&P 500 spiked up and down but look to end at a loss of about -0.15%. European and Asian major market indices close similarly with a tiny swab of sellers forcing parsed gains. The Russell 2000 gained 0.64% today representing the benefits of the Christmas season to smaller firms. Because they have smaller cash flows and may obtain a majority of their revenue through consumer consumption, smaller bullish periods as such have more of a positive effect on their price. On top of that, new product releases tend to occur during the densest shopping segment of the year which could predict upgraded revenue streams and new popularity among consumers. With the jolting nature of trading, the volatility index, VIX, grew by 1.49% to warn of the potential for more whipsaws in pricing. Even though there was an increase today, the index continues to trade near 52-weeks low with most investors feeling relatively stable when trading equities. One area that I'd expect to be leading gains in the quarter is the consumer goods sector with emphasis on retail and other similar industries. In Monday's trading, these trends already showed the potential to develop with gains just under 1% for both the S&P Retail Select Industry and the S&P Leisure Time Select Industry on the day. During the same time, Oil and Gas Production and Exploration and Mining and Metals Select Sectors both traded down over -2%. Look for these two industries to lag through the end of the year even though these losses are confined to today's observations. The commodity decline continues to pervade forms in these areas with deflationary pressures in mind as interest rates could be hiked.

These are just a few glimpses of the markets today. There is a whole lot out there that wasn't discussed, but I leave the post abbreviated today and probably through the week, As I have returned home for Thanksgiving, I have decided to hold posting for this week and focus on family, college assignments that I need to finish up at the end of the semester. Check out my StockTwits and Twitter pages for posts on comments I'd like to make throughout the week. Otherwise, enjoy Thanksgiving and have a great week with family. These are the breaks that are so important to replenishing clarity and inspiration to thoughts in every kind of thinking. Cherish them.

In the near future, I will be working on a little statistical study of the numerical correlation between price and supply in Henry Hub Natural Gas and WTI futures trading. It will be very exciting!

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