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Tag Archives: panic selling
Extreme Market Conditions Are Developing; Investors Must Be on High Alert to Avoid the Next Crash
Buy/sell signals for Fidelity funds are available at FidelitySignal.com
Explosions at the Boston Marathon Accelerate the Plunge of Global Stock and Commodity Markets; Money Flows to Treasury Bonds
The afternoon explosions at the Boston marathon precipitated a second wave of selling in the financial markets. The largest losses today were in sectors related to natural resources, such as gold and energy. The currently most out-of-favor international markets are Latin America and Eastern Europe. The top gainer was the Fidelity Spartan Long-term Treasury Bond Fund (FLBIX, change: 0.77%).
The greater than 10% drop in the gold sector is an unusually large sell-off that have not been seen in recent years. Gold is highly oversold now and ripe for a relief rally, but we continue to caution investors to stay away from this volatile sector.
Fidelity funds with the largest drops in today’s session:
Fidelity Select Sector Funds | Change |
Fidelity Select Gold (FSAGX) | -11.38% |
Fidelity Select Natural Resources (FNARX) | -5.27% |
Fidelity Select Energy Services (FSESX) | -5.07% |
Fidelity International Funds | Change |
Fidelity Global Commodity Stock (FFGCX) | -5.44% |
Fidelity Latin America (FLATX) | -3.70% |
Fidelity Emerging Europe, Middle East (FEMEX) | -3.27% |
Buy/sell signals for Fidelity funds are available at FidelitySignal.com
Sudden escalation of European debt crisis centered in Italy and Greece causes huge sell-of in equity markets world-wide
Mutual fund screens and buy/sell signals are provided by FidelitySignal.com
Update: the Armageddon portfolio continues to outperform
Our favorite model portfolio continues to be the Armageddon portfolio: http://fidelitysignal.com/armageddon_portfolio
Mutual fund screens are provided by FidelitySignal.com
Panic selling of 2011 continues: U.S. stocks break down
We have warned about the risk of U.S. stocks moving lower in the fall season following the panic selling in early August. Unfortunately, our benchmark S&P 500 index fund moved below its support level today, breaking its support level.
Panic selling continues
The stock market has dropped in panic selling in the last two days and is approaching the support level (see FUSEX chart below). Our best hope is that short sellers will cover their positions ahead of the weekend, which will lead the market higher while reinforcing the support level.
The selling of equities today was ferocious, reminiscent of the worst days of 2008. Energy services stocks got hit especially hard (see FSESX below). This was part of the global sell-off of commodity-related investments (see FFGCX below).
Mutual fund screens are provided by FidelitySignal.com
Gold stocks loose their luster
The last two days of panic selling in the financial markets around the globe brought gold stocks back to their trading range diminishing hopes for gold-related equity investments to serve as safe havens in the highly turbulent markets. A fresh breakout from the trading range will be needed to reassert gold investments as market leaders.
The data tells us that in the current market environment gold stocks no longer provide a hedge against losses in the stock market. Furthermore, the extent of the drop (see chart below) tells us that gold stocks are extremely risky investments right now. A risky investment that does not serve as a hedge against market downturns do not sound like a good deal for us.
Mutual fund screens are provided by FidelitySignal.com
Update: The Armageddon portfolio continues to outperform
Will panic selling resume in the stock markets following the Labor Day weekend? No doubt, this is a difficult market to invest in.
Our favorite model portfolio continues to be the Armageddon portfolio published by FidelitySignal. See their report at http://fidelitysignal.com/aug_2011.