Earthquake Or Rogue Wave – A Look At 1997 & 1998 For Clues
Continuing on the theme I mentioned on Friday about an earthquake or rogue wave, I went back to the two international events that caused these in the 1990s. The first chart below is from 1997 when the Asian currency crisis hit in October. On that day in October the Dow Industrials saw their single largest point decline in history. Of course, on a percentage basis, it didn’t rank all that high. After an all-time high in early October and a […]
Read More
Date: August 19, 2024
Early or Wrong?
The stock market has had a strong rally, at least price-wise since the earthquake 11 days ago. My thesis has been for several more aftershocks over the ensuing weeks and possibly longer. One thing I cannot argue with is the acceleration in what I have labeled as a bounce. I also have said that I would be surprised if the stock market went straight back to new highs. Aside from one aftershock last week, the bulls have powered ahead unabated. […]
Read More
Date: August 16, 2024
Big Run Up – Sell a Higher Open
The rally off the earthquake low 9 days has been impressive price-wise, but anemic volume-wise. It looks like an absence of sellers versus an abundance of buyers. I have used the rally to reposition some portfolios and reduce exposure in others. I continue to believe there are more aftershocks coming later this month and in September. The securities that worry me the most are the ones that fell into last Monday’s mini-crash, but haven’t rallied with the market. We have […]
Read More
Date: August 14, 2024
Healthy Pullback & Unimpressive Bounce So Far
I noticed that the S&P 500 has been down four straight weeks while still in an uptrend. That doesn’t happen all that often, but it is a plain vanilla pullback in a bull market. From peak to valley on a closing basis we have seen the major indices correct: Dow Industrials -6% S&P 500 -8.50% S&P 400 -8% Russell 2000 -10% NASDAQ 100 -12% When we downgraded our 1-3 month market view I said I did not expect a 10% […]
Read More
Date: August 12, 2024
Aftershocks Continue – Looking For Volume & Great BBQ
After Monday’s earthquake we saw a solid aftershock on Wednesday as stocks gave up a big bounce back gain to close moderately lower. Thursday reversed the reversal with 85% of the trading volume coming on stocks going up on the day, a good sign. However, as you can see in the chart below all the way on the right, the rally has come on diminishing volume which is a warning sign. Another “however”, this is not unusual. It’s the next […]
Read More
Date: August 9, 2024
Monday Was An Earthquake – Aftershocks Coming & Then All-Time Highs
Monday changed a lot of things in the stock market. You can call it a mini-crash or a woosh or an earthquake. One thing is for sure, days like that, especially after historically low volatility regimes, can shake investors’ confidence to the core. People react emotionally and usually not in a good way. They sell when they should be holding or buying. My thesis has been very clear. We downgraded the stock market over the 1-3 month period. We sold […]
Read More
Date: August 7, 2024
Bad News Is Now, Well, Bad News – Markets Manic
On Friday, the employment report showed a gain of 114,000 new jobs in July. The unemployment rate rose to 4.3%, its highest level since October 2021. Both were weaker than expected. However, market reaction was a whole lot worse than those numbers would have indicated and that suggests more selling on Monday, perhaps even high magnitude selling. For all those crying for a rate cut, thinking it would just propel risk assets higher, bad economic news is now bad news […]
Read More
Date: August 5, 2024
Bulls Wounded – New Lows Coming Soon
I am sure I am wrong, but I don’t recall two such opposite days like Wednesday and Thursday since 2020 and 2008 before that. Wednesday was insanely strong from a price perspective, especially in the beaten down tech area. Thursday was super weak across the board for the most part. In hindsight I think the bulls used cover from earnings to window dress portfolios for month-end and that’s it. The NASDAQ 100 is below. In real time, Wednesday looked like […]
Read More
Date: August 2, 2024
***SPECIAL Fed Day Update – High Probability Opportunity***
Wednesday concludes the FOMC’s meeting with the Fed standing pat but likely offering dovish language in preparation of a September interest rate cut. The stock market model for the day is plus or minus 0.50% and then a rally post 2pm. Given the recent pullback as well as Tuesday’s action, the odds of a Fed day rally have greatly increased to 90% which means going long or adding to positions at Tuesday’s close. The challenge is that there are a […]
Read More
Date: July 31, 2024
The Down & Outs Are Up & In – Huge Week Ahead
Friday saw the bulls come back to work after the pullback had reached deep enough for them to see value. I am not sure it has run its course, but I always try to be nimble enough to take action and not get stuck in a mindset. Since March I have written about a number of big picture portfolio moves as we have reduced exposure where it had been over 100% as well as reduced or sold off AI and […]
Read More
Date: July 29, 2024
