Dow Ends the Week on a High Note

The market was up today, as all three major indices posted gains. The Dow added 69.15 points and closed out the trading day at 17,477.40. The NASDAQ was up 14.68 points and closed at 5,048.24. The S&P 500 jumped up 8.15 points and closed the day at 2,091.54. World markets were down across the board, likely still suffering from the Chinese currency crisis.

Chinese Market Influence Yields Opportunities

Every time the market drops because something is messed up in China -- whether it's their economy as a whole or just their currency as of late -- there are opportunities in American markets.
In fact, any exogenous event creates the perfect conditions to buy.

When the market is affected by forces aside from supply and demand, any price movement isn't due to a fundamental condition in the market. That creates exactly the sort of conditions which can make big money for investors. There's a major difference between what we'll call organic market movement -- that is differences in supply and demand, or those caused by the essential health of a certain company -- and external movement caused by world conditions.

The US market is affected by world conditions, but not as much by the short-term changes that come along with a currency revaluation. Changing conditions like this are like waves crashing against the side of a huge battleship. The US economy is compared to a battleship a lot, usually in terms of how hard it is to turn around. That comparison is an apt one in other ways too.

Markets might be rocked by these changes, but unless there is a trend behind them it's hard to see how they'll do anything more but cause the battleship of the economy to sway in the waves.

In short, if a stock dips just because China is going crazy, and not because that company has a major stake in the Chinese economy, there may be a big opportunity to buy. You can count on stocks bouncing back pretty quickly

Home Depot at All-Time Highs

Despite the problems in the marketplace, Home Depot (HD) closed the day at an all-time high. The stock added 0.73 points today, and closed at $119.75 per share. Fellow home improvement store Lowe's is also performing well, but not at the same levels of Home Depot. Lowe's (LOW) grew by 0.90 points today, and closed at $72.11 per share.

Published on Aug 14, 2015
By Aaron Phillips
Aaron Phillips is a financial researcher and journalist based out of Michigan. He regularly writes the IG Daily and IG Weekly columns.

Copyrighted 2020. Content published with author's permission.

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