Semis Strong, Shouldering the Burden. Other Sectors Stepping Up.
The stock market continues to quietly drift higher, at least on the surface. The Dow, S&P 500 and NASDAQ 100 have seen new highs this week while the S&P 400 and Russell 2000 look constructive but still well below their peaks. I do expect them to play catch up and see blue skies before any meaningful downside is seen. I wrote about the banks earlier this week as being a concern. Discretionary is a bit stronger but also not firing […]
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Date: September 15, 2017
Banks Warning, Hold Key to Bull Market
Since late July I have been in the camp looking for a trading range with a mild/modest pullback. I remain of that opinion today. Should stocks gather themselves and score fresh new highs this month, I think it will be a good opportunity for the nimble to sell for a modest move lower into October. All along, I have written about a mid single digit pullback and that’s still my target. I do not believe we will see a 10%+ […]
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Date: September 12, 2017
Remembering 9-11
September 11th seems to sneak up on me each year. With summer vacation, kids going back to school, Labor Day and the start of the NFL season, it feels like I wake up and realize 9-11 is either the next day or very close by. We all remember where we were and what we did on September 11th, 2001. I was sitting in my office and saw the World Trade Center on TV with the media reporting that a plane […]
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Date: September 11, 2017
The Misconception About September’s Ire
Academics and the media do a pretty good job of warning the investing public of September’s historically poor performance. In fact, many investors become alarmed each year as August comes to an end and the various dire studies are paraded around. After all, since 1928, September is by far the worst month of the year with an average return of -1.1%. 39 have been up while 49 have been down. The other 11 months are basically flat or up with […]
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Date: September 7, 2017
Small Caps, Semis & Junk Leading. Banks Looking Sick
Stocks ended last week on firm footing as the bounce saw four nice days. With more North Korea tensions in the air, it will be interesting to see if the stock market finally cares or just uses this as an excuse to open mildly lower. Very quietly as I have mentioned before, the Russell 2000 has been leading the major indices. That does have bullish implications if it holds on. Additionally, the semis which have been the only key sector […]
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Date: September 5, 2017
Crosscurrents Abound. Enough for Bulls & Bears
Stocks continue the bounce they began two weeks ago and the same one I have been discussing. Tuesday was the day where the acceleration started. That could be slowing today. The NASDAQ 100 sits an all-time high but it’s lonely up there. The Dow and S&P 500 are within striking distance but the ever improving S&P 400 and Russell 2000 are not close. With the monthly jobs report out this morning, any strength will create a little short-term headwind for […]
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Date: September 1, 2017
Q2 GDP Baby. Stocks Like It!
This morning, the government reported that the “second look” at Q2 GDP grew by 3%, higher than the original 2.6% first reported. 3% is even higher than any of my most bullish models and it continues to show that the US economy is re-accelerating higher this year.I would love to hear from all those people who challenged my bullish view of the economy or called me out Twitter. They kept telling me that 3% was a pipe dream. My theme […]
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Date: August 30, 2017
Insurance Sector Around Disasters
If any sub-sector should be impacted by disasters, you would think it would be the insurance group. Similar to what I did above, let’s look at how the Dow Jones Insurance Index behaved around the events. Sandy is first and you can see that it was already pulling back when Sandy hit and continued to weaken for two more weeks before blasting off to the upside. This was basically in line with how the stock market did although a little […]
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Date: August 28, 2017
Stock Market Behavior Around Other Disasters
With Hurricane Harvey and the associated historic, catastrophic flooding the area is experiencing and the country is watching in real time, it got me thinking about how the stock market (S&P 500) and insurance stocks fared during previous disasters. I decided to leave energy out because there haven’t been many hurricanes that directly impacted oil and gas. I did not include the Deepwater Horizon disaster in the gulf. Let’s start with the S&P 500 during Superstorm Sandy, Katrina, the Northridge […]
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Date: August 28, 2017
Bounce to Continue. Yellen, Draghi & Harvey
We have several crosscurrents to end the week. Before I get to them, while I believe that stocks remain in pullback mode, I do not think that the bounce I wrote about on Tuesday is over just yet. There should be some more upside left. I am slightly encouraged by the very short-term strength in the Russell 2000 although it is about to test the underside of its long-term trend, also known as the 200 day moving average. That could […]
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Date: August 25, 2017
