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
Oil and Energy Diverging
It seems like the energy sector debacle has received very little attention among the mainstream media this year. Even the financial media don’t really care. I am guessing that’s because crude oil has somewhat bucked the bearish trend the stocks have been on as you can see below. Oil has been very volatile and mildly lower. The stocks have been downright ugly. This has been an unusually long period of behavior like this. In the past, the stocks have usually […]
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Date: August 24, 2017
Bounce Coming But Pullback Still Secure
While the short-term pullback continues, stocks are seesawing back and forth and are “supposed” to bounce here. For the past two trading days, the bears were unable to follow through from Thursday’s decline and fought the bulls to a draw. Unless we are looking at something bigger on the downside than I expect, we should see the bulls step up in a small way. It will be interesting and perhaps telling to see which of the major indices lead and […]
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Date: August 22, 2017
As Expected, Pullback Continues
All month I have been writing about a short-term pullback for stocks. Nothing huge. Just your garden variety 3-5% bout of weakness which could overshoot. This coming from someone who has been bullish all year on stocks. I won’t reanalyze what I have already written several times, but here are a few reasons. The Dow Industrials were off on their own island of strength while the mid and small caps were in decline. Dow Transports were even weaker. Sentiment surveys […]
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Date: August 18, 2017
Market Like 1987 Again?
With Thursday being a downside rout that closed near the low for the day, stocks normally see two way action during the next morning before the opportunity for a stronger move comes after lunch. When markets are in the throes of a decline and I would hesitate to call this a decline of significance at this point, many of us turn to history for price analogs. The crash of 1987 really began to unravel the week before which was options […]
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Date: August 18, 2017
