Wall Street Greek: Witness Capitulation

Published January 15

Investors awoke to the fruition of their worst fears Friday. Now, these are fears that have weighed on stocks for some time, so logic tells us it should be no surprise that Iran will be clear to sell oil imminently. So the reaction is really due to the sensitivity of investors now, after the slow bleed in stocks since the close of last year. Iranian oil is likely coming to market next week, and oil prices dropped sharply this morning despite the long lead up to the event. Witness capitulation friends, driven by fear, and it so appropriately comes on a Friday before a long weekend. Let the lemmings jump off the cliff. Stocks will likely mark their lows on fear driven capitulation today (possibly intraday) or on Tuesday morning. Energy investors may need to see how Iranian oil impacts its market before taking oil prices higher, but I repeat, the sell-off up until now has well priced in what I believe will not be as bad as was expected. And, upside catalysts exist for oil as well and have a high probability of showing up this year. In any event, given current value, equities would require economic softening or corporate earnings outlook adjustment to justify further decline. Bad news has exhausted its influence. Fear-driven exaggerated selloffs mark market troughs and open the way for unimpeded upticks. See more about the stock market capitulation here.

Market Sector	12:30 PM ET
SPDR S&P 500 (NYSE: SPY)	-3.2%
SPDR Dow Jones (NYSE: DIA)	-3.1%
PowerShares QQQ (Nasdaq: QQQ)	-4.2%
iShares Russell 2000 (NYSE: IWM)	-4.1%
Vanguard Total Stock Market (NYSE: VTI)	-3.3%
United States Oil (NYSE: USO)	-6.3%
iPath S&P 500 VIX ST Futures (NYSE: VXX)	+13%

Please see our disclosures at the Wall Street Greek website and author bio pages found there. This article and website in no way offers or represents financial or investment advice. Information is provided for entertainment purposes only. Article interests investors in: S&P Retail ETF (NYSE: XRT), Wal-Mart (NYSE: WMT), Pier 1 Imports (NYSE: PIR), Ethan Allen (NYSE: ETH), Hooker Furniture (Nasdaq: HOFT), Home Depot (NYSE: HD), Lowes (NYSE: LOW), Apple (Nasdaq: AAPL), Best Buy (NYSE: BBY), The Limited (NYSE: LTD), Chicos (NYSE: CHS), Ann Taylor (NYSE: ANN), The Gap (NYSE: GPS), Macy’s (NYSE: M), JC Penney (NYSE: JCP), Nordstrom (NYSE: JWN), TJX Company (NYSE: TJX), Kohls (NYSE: KSS), Costco (Nasdaq: COST), Target (NYSE: TGT), Wet Seal (Nasdaq: WTSLA), Hot Topic (Nasdaq: HOTT), American Eagle Outfitters (NYSE: AEO), Aeropostale (NYSE: ARO), Abercrombie & Fitch (NYSE: ANF), Saks (NYSE: SAK), Tiffany (NYSE: TIF), Talbots (NYSE: TLB), Lumber Liquidators (NYSE: LL), Builders Firstsource (Nasdaq: BLDR), Fortune Brands (NYSE: FO), Leggett & Platt (NYSE: LEG), Tempur-Pedic International (NYSE: TPX), Acuity Brands (NYSE: AYI), La-Z-Boy (NYSE: LZB), Select Comfort (Nasdaq: SCSS), Sleepy’s (NYSE: ZZ), Furniture Brands (NYSE: FBN), Natuzzi (NYSE: NTZ), Sears (Nasdaq: SHLD), Dillard’s (NYSE: DDS), Bon-Ton (Nasdaq: BONT), Cost Plus (Nasdaq: CPWM), Baker’s Footwear (Nasdaq: BKRS.OB), Bebe Stores (Nasdaq: BEBE), The Buckle (NYSE: BKE), Cache (Nasdaq: CACH), Casual Male (Nasdaq: CMRG), Cato (Nasdaq: CATO), Christopher & Banks (NYSE: CBK), Citi Trends (Nasdaq: CTRN), Collective Brands (NYSE: PSS), Destination Maternity (Nasdaq: DEST), Dress Barn (Nasdaq: DBRN), DSW (NYSE: DSW), Finish Line (Nasdaq: FINL), Footlocker (NYSE: FL), Gymboree (Nasdaq: GYMB), Guess (NYSE: GES), J. Crew (NYSE: JCG), Jones New York (NYSE: JNY), Jos. A Banks (Nasdaq: JOSB), New York & Co. (NYSE: NWY), Men’s Wearhouse (NYSE: MW), Syms (Nasdaq: SYMS), The Children’s Place (Nasdaq: PLCE).