There will be much talk about how the market (S&P 500)closed at an all time high on last Friday. That’s yesterday’s news. Let’s take a look at the week ahead.
April 1: The market has had an great run. Let’s hope April Fools Day doesn’t extend to the investing public. This interesting tidbit from my friends at BTIG shows that the first of April has been a winner 75% of the time.
April 1st North Korea bluster. What does it mean? Is there an opportunity here? The U.S is unusually showy in flying aircraft over the Korean peninsula. Short Korean ETFs? This is another black swan type of play. It’s highly unlikely the Korean show of force amounts to anything but the systematic devaluation of the Yen will amount to problems for the Korean export driven economy. Another derivative play is long gold in U.S dollars.
April 1st Chinese PMI A Chinese manufacturing gauge rose to an 11-month high, indicating a recovery in the world’s second-largest economy is sustaining momentum. The Purchasing Managers’ Index was 50.9 in March, the National Bureau of Statistics andChina Federation of Logistics and Purchasing said today in Beijing. That compares with 50.1 in February and the 51.2 median estimate of 26 analysts surveyed by Bloomberg News. Readings above 50 indicate expansion. The material stocks like Caterpillar have been laggards. The improving economy and China should help this heavy duty earth mover.
April 1st Schlumberger on 3-31 issued an update “In Venezuela, after meetings with PDVSA, the collections have improved to the point that we will recognize all revenue associated with our first-quarter operations. We further expect to finalize a new payment agreement with PDVSA and we anticipate ramping up activity to meet the current and future needs of PDVSA’s development and production plans, thereby continuing our commitment to Venezuela.” SLB does more than 5% of their business in the post Chavez country. Besides SLB has a nice looking stochastic chart.
April 2nd Express Scripts ESRX hosts a conference call with JP Morgan analyst
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April 3rd Conagra and Monsanto report earnings before the opening. This may shed some light on the dismal state of agricultural commodities prices. It’s a touch ironic that both Mon and CAG are making 52 week highs while the Power Shares DB Agriculture Fund DBA is touching 52 week lows.
April 5th Friday Change in non-farm payrolls. This could be significant. The Fed has said they will keep QE stimulus going until unemployment reaches 6.5 percent unemployment and 2.5 percent inflation for one to two years. If unemployment drops sharply, market participants could get nervous not wanting to be the last one standing when the music stops.
*One of the things we talk about in the Investment Survival Workshop is developing the mindset to think ahead. When I first moved out to Park City, Utah from Atlanta, Georgia I was admittedly a bit anxious about the idea of getting up at 5:00AM every day to start researching the stock market. After all, that’s exactly what I was doing back East except it was 7:00AM and I had a full 2 ½ hours before the market opened at 9:30EST. I did this for some time until I came to the realization that if I was trying to figure out what was happening today, I was already way too late. What was going to happen today already happened early this morning in Europe or even earlier in Asia.
Maybe it was just a form of rationalization but if you are trying to figure out what is going to happen today, you are late to the game. You have to develop a mindset of thinking about something other than today. Now that will vary for everyone. I mean if you look at this as a mental exercise, much like physical exercise, are you training for a half marathon, a 5k walk & run fund raiser or just to be more fit for your family and fun? The point being is that when you have a regular exercise routine, you have goals in mind. When you are planning an investment strategy, it’s no different. What’s your time period? Are you a long-term investor or someone who is just trading week to week or even a day trader? As part of a routine, find time to anticipate what’s going to happen for some period in the future.
Everyone’s time frame will be different. For me, my crystal ball is short term in nature. With that in mind, here are a few of my ideas for the following week, beginning March 5th.
Not necessarily in alphabetical order:
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