A repeat of the prior week – lethargic intra-week trading action finished off by a significant Friday sell – off.
Friday’s action was induced by some new concerns – airlines posting declining earnings on fewer passengers and higher fuel prices, and a pending strike against many auto manufacturers which will hurt them. This in addition to the other concerns about real estate values declining and the Fed keeping rates high for a longer period as inflation remains entrenched at levels above the Fed’s preference.
Friday’s action also included quarterly expiration of options and futures contracts, always a volatile day.
Many stocks, ours included, declined again. For all the concerns of a “potential market correction” to come soon, in reality about 50% of our watchlist stocks are already at or near yearly lows – there is not much further they can fall. For many companies, they have been suffering a recession in stock price for many months. Most investors are not aware because the rigged major indexes do not reflect this.
Interestingly, there are more BUY signals than SELL SHORT signals among our watchlist stocks for next week. Perhaps there is some information that institutional investors are aware of that makes them bullish on stocks going forward from these low prices.
Next week is a Fed rate decision – expectations are for no increase. Any increase would “surprise” investors and result in more sell-off.
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