As we anticipated, the recent bearish pullback ran out of gas, and the bulls decisively took control, driving the S&P 500 well back into range we have experienced for much of 2015. Release of FOMC minutes did nothing to stem the recent upward tide as the markets closed near their highs of the day. Soft overseas markets amidst terrorism and China slowdown concerns did not seem to matter. Overall market sentiment is fairly neutral as there does not seem to be a strong appetite for risk, and yet there is no obvious place to chase yield elsewhere.
The CBOE Volatility Index (VIX) flirted briefly above the 20 level before settling back down close to where we were a week ago, near 16. Seasonal bullishness may cause the VIX to drift lower even more over the next several weeks. While the markets seem comfortable with gradual rate increases starting in December, the Fed remains the key known risk factor in the short term. Options traders have a way to make bank regardless. To get the ultimate in comprehensive options education, go here: http://www.optionsuniversity.com/options-mastery-seminar/
OVERSEAS: Led by the bullishness in the U.S., overseas markets were strong across every major market across the globe. The Dax is up 1.31%, and certain Chinese markets are even stronger. Shenzhen was tops at 2.51%, despite concerns about an economic contraction in both Japan and China. The MNI China Business Sentiment Indicator fell from 55.5 to 49.9.
However, the fact that the mastermind of the Paris attack is now confirmed dead seems to have brightened the mood overall.
OIL: Crude oil prices dipped below $40 per barrel briefly in recent days for the first time in a long time. The growth of inventories seems to have slowed a bit (a 0.3 Million barrel increase compared to a 4 Million barrel increase the previous week). Yet stockpiles remain quite high, and could take several months or even longer to return to a more typical level.
JOBS: Jobless claims data came in almost exactly as expected at 271K. That is 5K fewer claims than the previous week, as the overall trend continues to show improvement in the unemployment situation.
BIOTECH INSIDER: Just days after our resident biotech expert booked gains on Eagle Pharmaceuticals, he believes it may be time to accumulate shares again on the latest breakout. The company faces a December 13, 2015 FDA decision on its rapid infusion product for chronic lymphocytic leukemia, a type of cancer in which bone marrow makes far too many lymphocytes [a type of white blood cell], as well as non-Hodgkin lymphoma (NHL), which also begins in cells called lymphocytes. After a 40% move off October 2015 lows, the stock could retest $100 highs… To learn more about the potential of such stocks, click here: http://optionswealthinsiders.com/biotechv2/
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