In the major markets, the month of January started strong and ended with its face in the sand. In the first week of January, the S&P 500 was up 2.7%. In the last week of January, it finished down 3.7%. Meanwhile, penny stocks investors continued to make steady gains with a few major breakouts.
Last month, investors in the major markets had more jitters than a virgin groom on his wedding night. And it seemed that nothing could soothe them. Good news was met with skepticism, while bad news was treated with borderline hysteria.
Even a recovery high of 1150.45 on Jan. 19 failed to turn things around. The end result was that the S&P 500 slid steadily to an aggregate loss of 1.6%. However, the new month may be a harbinger of a new attitude.
Today’s early indicators are that the market may be trying to make up some lost ground. The retail index is still down but the energy sector got a nice boost from Exxon Mobil’s better-than- expected earnings report. Expect to see some overflow of goodwill to other energy sectors, including energy-related penny stocks. On the OTCBB, Rainchief Energy Inc (OTCBB: RCFEF) saw a nice 105% jump, while Geneva Resources (OTCBB: GVRS) is looking with 100% increase from last week .
Overall, things looked promising as the midday trading tickers showed the Dow +106.10 at 10173.43, Nasdaq +19.79 at 2167.43, S&P +12.58 at 1086.45.
Still, this is an important week in the market, with another heavy slate of earnings reports and a slew of economic releases set unfold. So it may be too early to make sweeping assumptions. Investors can’t go wrong by looking for the best value for their dollar, particularly in the penny stock market.
The biggest driver is the presumption that the market is due for a bounce following the large losses of late.
The most important release of the week will be the January employment report, which hits the wires Friday at 8:30 a.m. ET. This will give another snapshot of the overall health of the economic conditions. Earlier today, the Personal Income and Spending report for December was released, and the results were mixed. Personal income rose 0.4% (consensus +0.3%) (after an upwardly revised 0.5% gain in November )while personal spending jumped 0.2% (after an upwardly revised 0.7% increase in November).
In the meantime, penny stock and micro-cap investors (or, for that matter, anyone looking for cheap stocks to buy) should keep a close watch on the OTCBB, where some very interesting gains are being made today. Strong sectors include diversified metals and miners; steel; gold; home furnishings; oil and gas drillers; oil and gas explorers; investment banks; casinos and gaming.
Happy hunting!
