It was great to see stocks reverse course on Friday from a weak afternoon to a very nice advance by the closing bell. Overall, though, investors are just exhausted from the crazy week, which saw two sessions with losses of more than 1000 points for the Dow and two of the major indices enter correction territory. In the end, stocks dropped by approximately 5% this week, marking one of the worst showings since the rough start of 2016.
Still, in the midst of a sharp correction, we’ll take any good news that comes our way. Today, the S&P rose nearly 1.5% to 2619.55, while the NASDAQ increased 1.44% to 6874.5. The Dow advanced 1.38% to 24,190.9. Volatility re-asserted itself this week, and Friday was no exception as these indices were sharply in the red at mid-day.
So the week is over, but is the correction over too? We’ll find out next week. For now, investors can head into the weekend feeling a bit better about things.
The portfolios were active all week as the editors picked up stocks at bargain prices while also shedding names to either secure profits or limit downside. On Friday, TAZR Trader added more to an existing position and took a double-digit profit. Home Run Investor sold two stocks for strong returns. See more below:
Today’s Portfolio Highlights:
TAZR Trader: This correction is turning out to be a bit sharper than Kevin originally thought, but the plan is the same: get ready for the rebound! To close out the week, the editor added 5% to NASDAQ 100 3X Bull ETF (TQQQ). You’ll remember he added 5% just yesterday to stay involved in the “FAAMNNG” (Facebook, Amazon, Apple, Microsoft, Netflix, NVIDIA and Google) while this pullback works itself out. In other news, the editor also sold cyber-security company FireEye (FEYE) for a 27% gain after a strong report met an underwhelming investor reaction. The company is still an acquisition target but Kevin doesn’t want to ride it down again during a stiff correction. He also “took his lumps” in BIDU to swap into TQQQ. Read more about today’s moves in the full write-up.
Home Run Investor: The portfolio sold several names on Friday and a couple of them were big winners. Mindbody (MB) provides cloud-based business management software for the wellness services industry. It has been in the portfolio for a while now, and today Brian Bolan sold it and secured a nice return of nearly 43%. The editor also sold cyber security play Varonis Systems (VRNS), which provides a software platform that allows enterprises to map, analyze, manage and migrate their unstructured data. The sell brings a profit of 29.4% in a little under five months.
Large-Cap Trader:“I want to remind everyone. Last year was a total fluke. It was the lowest volatility year in decades for stock markets everywhere.
“As I started this year with “My 10 Biggest Risks for 2018”, I want to remind you. This is a correction, not a recession. Oxford Economics, a group I respect as an economist, did not change their recession probabilities for the next 6 months.
“Until a recession is in the cards, this can only be a stock market correction. But that is little comfort.They can go -20% before they run their course.” — John Blank
Counterstrike:“Crazy volatility today as the Dow was going bonkers, selling off in the morning and ripping hard in the afternoon. The S&P closed up 1.49%, while the Nasdaq finished up 1.44%. Markets were sampling insane this week, so it wasn’t surprising to see a Friday range of almost 1000 points in the Dow.
“I’m really not sure what to think about the market at the moment. We have some violent liquidation going on that seems to have stemmed from the VIX blowups. The 200-day tested twice today and held. That was a positive sign for the bulls and why we bounced so hard in the afternoon.
“That 200 day needed to hold today. If for some reason we were to come back down to that level, it could be big trouble.
“Next week we will see more earnings and hopefully some calm. If the forced liquidation is done, markets should have a pretty nice week.” — Jeremy Mullin
Have a Great Weekend,
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