Last week was another very difficult week for equity markets as the retest of the August lows is underway. The NASDAQ Composite which has been the best performing of the major indexes took a hit and lost 5.3% of its value closing at 2,483.23. Using SPY, a liquid ETF that tracks S & P 500 performance, can be beneficial for traders. The SPY closed at 113.54 Friday, down 6.57% on the week. The low in SPY from August rests at 110.27.
When markets are as negative as the current one there is typically nowhere to run and nowhere to hide for traders. While Gold has been a strong performer for many months the gold miners yielded to sellers last week as well. The Market Vector Gold Miners ETF, symbol GDX, had been in a solid uptrend. However, the sellers took control and sent GDX down 7.70 point to 56.41 which was a 12% weekly loss. GLD, the ETF that tracks the actual price of gold was down 16.23 to close at 159.80. This was a loss on the week of 9.22%.
XLE an ETF that tracks the performance of the energy sector was also hit heavily and closed down 12.5% for the week and took out its August low. XLU, SPDR Utilities sector, and XLP, SPDR Consumer Staples are more defensive groups and places typically good for late stage investing. These 2 ETFs lost 1.88% and 4.35% last week. The market is clearly in correction mode and we recommend traders remain defensive. Our lone holding Visa, V, came within 5 cents of our buffer zone for the first price target. While frustrating, this business is an art not a science and those types of things do happen. The stock showed great relative strength, both when the market was rising and when it fell as V was only off 0.8% for the week. We will maintain with the same parameters for now. Be cautious but these can be good trading environments for experienced traders as we are oversold and the volatility is high.
