SmartStops Market Risk Report 
For the week ending Friday, June 21, 2013

Be Paid For The Risk You Take!

Risk does not remain constant, but instead fluctuates over time. Why expose yourself to periods of elevated risk if you don't have to?

Each day you are long and in the market, you are exposed to risk. Make sure you are being paid for the risk you take. Timely protective action to sidestep periods of elevated risk can maximize your return for each day in the market.
This Weeks Market Risk

Market risk has been on the rise as of late.  


As of Friday, the percent of S&P 500 components that are in the Elevated Risk State according to the SmartStops Aggressive Risk Signals reached 57%, which is 1.58 times the 100 day average of 36%.  


Market Risk Level - S&P 500   (View Market Risk Barometer)


The S&P 500 Volatility Index (VIX) has also been on the rise. This is making buying protection via options a bit more expensive.  

  VIX S&P 500 06-21-2013


Recent Events Impacting Market Risk

  • The Federal Reserve Chairman, Ben Bernanke, indicated that late this year the Fed may begin to curtail the current policy of quantitative-easing.  Read Article 
  • Housing report showed continued strength in housing with prices rising in many markets.  Read Article 
  • China's cash squeeze raises fears of a global economic slowdown. Read Article


Highlighted Stocks & ETFs 


Netflix (NFLX)   $216.90   (view NFLX)

Netflix hit a high this week of $235.88 on Thursday before pulling back and closing flat for the week at $223.52. Its 52 week high is $248.85 which it hit on May 16th. The stock is up a whopping 140% year to date.

With the incredible run it has had, and with economic uncertainty creeping back into the markets, it may be a good time to maintain stop loss orders to protect some of the recent gains.  

Netflix remains in the Normal Risk State according to SmartStops' conservative risk signals but did trigger a risk alert on May 28th placing it in the Elevated Risk State according to the aggressive risk signals. 

Recommended aggressive and conservative stops are $201.95 and $196.70 respectively.    
Netflix Risk States 06-21-2013

Over the last 2 years Netflix has been extremely volatile and has experienced several periods of above normal or elevated risk.
(Conservative Risk Signals - periods of elevated risk highlighted in gray). 

Netflix 2 Year Chart - Conservative Signals
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