Tag Archives: call options
Stocks have done remarkably well since the June lows. Normally, in a midterm election year, the third quarter is a bummer. Unless something disastrous happens in the next two weeks, though, Q3 this year will end up on the plus side of the ledger.
And what a fitting time for it to begin! This afternoon, I received an urgent message from a leading institutional analyst, proclaiming, “The Next Recession Has Started.” Apparently, the stock market wasn’t paying attention. After the Treasury issued a scolding word to China in mid-afternoon about currency manipulation, share prices shot higher to challenge the upper end of last week’s range.
The stock market tried this morning to build on yesterday’s gains, but no luck. It looks as if there’s still enough selling pressure overhead to push prices back into the base that has formed in the 1140-1145 zone on the Standard & Poor’s 500. That’s no big deal for those of us who are buying stocks for the long pull (two to four years).
After yesterday and today’s trading on Wall Street, you may be reaching for the Prozac. I can’t blame you.
The volatility we’ve seen in the stock market over the past few days, both up and down, is enough to drive the calmest soul to manic depression. It’s stock market irrationality in purest, sublimest form: Investors are unsure about the future, so the slightest news impulse goads them to buy (or sell) in a herd.
We’ve just taken the first two steps.
Yesterday and today, buyers came out of their Wall Street bomb shelters and made their first tentative purchases. Another good up day tomorrow would help, but we’re still in the earliest stages of a long recovery road for stocks. Be prepared for lots of back and forth action as the market indexes try to form a solid bottom.