Stock Market Analysis

Monday, March 31, 2014

End of Q1 2014

The last trading day of Q1 2014 ended well with the Dow gaining 134 points today, ending the first quarter of 2014 on a positive note exactly how I have predicted it at the start of the year. Overall, the Dow gained 1.68% in the first quarter of 2014 or an annualized 6.7%, which is a very healthy bull trend. However, will the US market really gain 6+% by the end of the year? I am skeptical. As I mentioned at the start of the year, I expect the US market to be in a volatile bull trend all throughout the first to third quarter with the fourth quarter looking to be more uncertain. In fact, I am of the opinion that we could see an extremely significant correction by the fourth quarter due to the business cycle and the Hindenburg Omen.

Looking more closely, today's "Bull Day" seems to be a little doubtful as it was slightly overdone on no significantly bullish economic data or news. Bond yields and put call ratio both didn't display the kind of behavior that a truly bullish day in the stock market produces. As such, I would be careful to call this the start of another very strong leg upwards. Doesn't mean it cannot but that this simply isn't the time to jump in long too strongly without further evidence.


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