Module 1: Introduction to Options
Weekly Market Update By Michael Carr, CMT
May 15, 2017
Market Overview • Small caps have not confirmed a short-term bullish outlook. • Global market indexes are bullish. • Big picture continues to point to a long-term bull market with a pullback likely.
Let’s look at some charts…
S&P 500 With the Acceleration Indicator Remains Bullish
Short-Term Breadth May Provide a Warning
Small Caps Look Bearish
For Now, This Is a Global Bull Market • Markets around the world are rallying despite bad news. Disruptive elections in Europe. Recognition that the Greek debt crisis will require loan forgiveness. Unsettled situation in North Korea. China’s expansionary policies. No solution in sight for Syria. Low oil prices affect government policies in the Middle East.
France
Great Britain
Germany
South Korea
Israel
Egypt
Investors Are Bullish • Market prices are forward looking. • Traditional interpretation is that instead of seeing problems, investors around the world see growth in stock prices. However, it may be the TINA effect (There Is No Alternative to Stocks).
• Until we see a breakdown in prices, the trend will remain up. A high degree of correlation among global markets indicates a breakdown could be sharp, when it occurs.
Market Opinion • A down move remains likely. A pullback would provide a buying opportunity. For now, a 5% pullback remains likely. Global synchronization is a growing concern because that could lead to a steeper selloff.
May 15, 2017
Market Overview • Small caps have not confirmed a short-term bullish outlook. • Global market indexes are bullish. • Big picture continues to point to a long-term bull market with a pullback likely.
Let’s look at some charts…
S&P 500 With the Acceleration Indicator Remains Bullish
Short-Term Breadth May Provide a Warning
Small Caps Look Bearish
For Now, This Is a Global Bull Market • Markets around the world are rallying despite bad news. Disruptive elections in Europe. Recognition that the Greek debt crisis will require loan forgiveness. Unsettled situation in North Korea. China’s expansionary policies. No solution in sight for Syria. Low oil prices affect government policies in the Middle East.
France
Great Britain
Germany
South Korea
Israel
Egypt
Investors Are Bullish • Market prices are forward looking. • Traditional interpretation is that instead of seeing problems, investors around the world see growth in stock prices. However, it may be the TINA effect (There Is No Alternative to Stocks).
• Until we see a breakdown in prices, the trend will remain up. A high degree of correlation among global markets indicates a breakdown could be sharp, when it occurs.
Market Opinion • A down move remains likely. A pullback would provide a buying opportunity. For now, a 5% pullback remains likely. Global synchronization is a growing concern because that could lead to a steeper selloff.
