Well, here we are. The Dow ended the year down 2%. Lots of volatility, and little progress toward the upside when looking at the markets as a whole. However, here were a few pockets of opportunity. Namely FANG. Facebook, Amazon, Netflix and Google. Technology led the way with these four stocks taking the lead.
Some market watchers are concerned that these stock are in a bubble stage. Others view the markets as still a cheap place to invest. Fundamentally speaking, valuations while high, are still low relative to the dot.com bust of 2000.
Chart analysis does not see a bear market in the intermediate future with the 50 day moving averages well above the 200 day ma. As for volume, there has not been heavy selling at critical price levels, and correction points.
Price action is positive. The Aug 2015 correction proved to reveal heavy buying in FANG as investors picked up shares at a discount. Support levels are intact and there was no breach of support.
Despite the fed raising interest rates for the first time in a decade stocks behaved quite well shrugging off the rate hike by posting positive gains in all major indexes the day of the rate hike. There is still plenty of money in the economy and the easy money policy is still in force to support future economic growth.
China has some concerned as there was a bit of a slow down in Asia. The real question is if China will continue to be a leader in economic growth. In the short term a lull should be expected. Long term outlook for China is positive given much buying in Chinese equities from major investment firms.