And now without further interruption Part III - the conclusion of 2015 - the Year in Review.
In case you missed:
The market could be found hanging on for dear life in early August. The biotech bubble was starting to deflate. $AAPL was getting juiced. The VIX was rallying. China's stock market bubble popped. Eurozone fears remained.
We also had bad market breadth. Just a few leaders were doing all the heavy lifting. The writing was on the wall. But the market was not going to give it up easily.
On August 11th a few weeks away from the market crash, I noted that a break of that key $120 support on $IWM would be the tell that a larger marker pull back was coming.
as August moved to the middle of the Monday - Apple's sell-off and continued volatility created some tremendous returns for it's options.
and GPRO's collapse made those PUT's happier than a selfie stick mounted to a drone.
on the flip side GOOGLE turning into Alphabet turned some call options into big winners:
Up or down the market in 2015 let bulls and bears alike enjoy the action.
2015 was coming to a head. After nearly 9 months of consolidation S&P500 futures were coming together...
but where would the next move be? We were just a few weeks from finding out.
August was another month of Prices reverting to the mean.
The action never was too hot or too cold. The sell offs were never too steep or too shallow.
And the market wasn't handing out the proof of the pull back quite yet. Support levels were tested but not broken.
the following week the market was starting to get funky. The FED minute finger was the final nail in the coffin for the market in August.
My recap after the FED minutes painted the picture for the coming weeks. Support was broken. The pull back that had been trying to pop its head into the picture is coming. Of course at the time I don't think anyone realized just how big it was going to be. The FED minute spike and then sell-off was the domino that started a precipitous decline for stocks.
Here were some of the set-ups I was looking for prior to the market crash.
$IWM broke $120 and the sell-off was on
It was a 'weak' to remember. But it was about to get much weaker the next week. The cracks that had formed late July and early August set the market up for one of its biggest pullbacks in recent history.
The FED Finger 'weak' prior to the market crash.
Sell orders were coming fast and furious
and some great trades on $IBB and $XLE came to fruition.
Then the market crash came
Out of the crash came some great trades for downside. Biotech to name one. $IBB was flying high. An early summer topping pattern morphed into a late summer collapse.
And sometimes more impressive after a market crash, like the flash crash in 2011, is how quickly prices can recover.
and as we ended the most memonralbe week of 2015. It was Friday
an hour before the close on Friday. What better time to send the buybots into a fury.
We ended August lower. But Off the crash lows so we had that going for us....
and the nasty little bear was born
September started off down over 2%. The start of the month has been a trouble spot for the market in 2015. The middle of the month seems to bring the buyers out.
Where did I think the market was headed in Septemeber?
September really brought on the rips sellers.
Two faced market action was running rampant. Sharp spikes to the upside followed by nasty sell-offs.
I was turning decidedly bearish as the action came together. A giant wedge was forming. While I did not know where it would resolve I thought it was going to break lower....
It eventually resolved higher. As the market rallied until the start of December.
There was no V bottom spike. Prices were gyrating up one day, down the next. I yearned for 2014 V bottom action. Sell to the bottom then buy buy buy.
This time around prices were slow to recover.
September 17th came and it was Judgement day. Would the FED raise rates?
I, on the other hand was FED UP
and biotechs were doing what they were supposed to do
and $CAT continued it massive move lower from over $100 in late 2014. The CAT finally came out of the bag
At the end of September we were left wondering what matters to the market?
and he market greeted the POPE's arrival
September had more of those 'close the open' days.
The Pope Omen!
The market found its lows heading into October. It then rallied and never looked back.
The market still has plenty of cracks, but prices are leafing over them.
and Draghi was busy helping the market rally off its lows in October
more QE for the ECB....... that should do the trick!
Turns out $CMG has an ECOLI problem
This took down CMG ate in the session, which worked into some incredible trades.
as the market pulled back into the middle of the month. Another buy point had been reached.
and more 2015'esque action in November
And do Jobs reports matter anymore?
Dr Copper is no More
We learned in 2015 that terrorism and shooting down Russian Fighter planes is bullish for the stock market.
Someone like $SCTY heading into DECEMBER.
The Start of December, like the start of previous months, was met with some selling. The market pulled back into the middle of the month. There were plenty of trades to be made in between. $VRX was moving off its lows. $SCTY squeezed from $28 to near $60 a share. Its share price more than doubled from lows of the previous month.
$CMG provided some more incredible action.
Heading into last week the FED was setting up the market to raise rates. And hike rates they did.
For the first time since the financial crisis, ZIRP is no more.
- I was looking for a quick pull back after the announcement followed by a rally. That is exactly what we got.
Thursday the market looked poised to continue on with the rally. But the rally fizzled out and morphed into a rout. Stocks closed at the lows.
Now the question is... do we get that Santa Rally into years end?
What is in store for 2016?
Stay tuned for our 2016 predictions.