Short Covering

Screen Shot 2014-05-05 at 9.13.17 PMDan Stewart CFA®
President/Chief Investment Officer
NorAm Asset Management

The equity markets spent most of the day in the red on Friday.  But then staged a late day rally in the last few hours of trading to close in the green.

It was Options Expiration Friday, the 3rd Friday of every month, for monthly options.  This always skews the numbers as institutional investors are jockeying to keep options positions profitable.  They do this by buying and selling stocks to keep their respective positions within the necessary range to keep their option plays profitable.

In any event, the rally wasn’t particularly impressive.  Advancing issues were 64% on the NYSE and only 59% on the NASDAQ.  Up Volume was 60% on both major exchanges.

Much of the rally was due to short covering as traders were wanting to either protect profits or unwind their positions going into the weekend.

This week will be light regarding economic reports, and in fact, we have none for Monday.  There are also few earnings on which investors can focus.

When the markets have been choppy and unable to find a discernible direction, sometimes the best thing to do is nothing.  This is especially true on a Monday.

At the shop at NorAm, we usually hold off taking new positions on Monday unless there is a really compelling stock or sector ETF showing unusual strength.  You do, however, always want to be ready on a Monday to be defensive.

For a complimentary portfolio review, e-mail me at Dan.Stewart@NorAmAsset.com and we would be happy to review your positions.  We can evaluate your sector risk and individual exposure.

We have no economic reports and only 2 companies reporting on the S&P 500.  We have only a handful of companies reporting in the broader markets.  Some notables are below.

Remember to tune into The Wall Street Shuffle Saturdays on 1190 AM at 10 a.m. in DFW.  You can also listen via iHeart radio.

As a newsletter subscriber, you will receive short weekend video at 9:30 a.m. on Saturday so you can watch & then follow along on The Wall Street Shuffle radio show as we will be covering these topics specifically.

I hope you enjoy the show.  If you have any investment questions you would like discussed on the air or specific investment questions in which you would like personal advice, e-mail me at Dan.Stewart@NorAmAsset.com and I will be happy to respond.

Dan Stewart CFA®
Chief Investment Officer
NorAm Asset Management

Economic Reports Today:

Non

Some Notable Earnings Reports Today:

Campbell Soup(CPB – before market)
Urban Outfitters
(URBN)
Valspar
(VAL – before market)
Hertz Global
(HTZ)

The information presented is for educational and entertainment purposes only.  Opinions and information expressed are based upon information considered reliable.  However, factors are constantly changing and should not be relied upon. You need to do and verify your own research.  

Moreover, no reader or listener should assume that any information or discussion presented serves as personalized investment advice from NorAm Asset Management, Inc. or from any other investment professional, and is not an offer of solicitation for the sale or purchase

of any specific securities, investments, or investment strategies. You need to have your own, individual investment advice suitable for your personal situation.

Investments involve risk and unless otherwise stated are not guaranteed.