Bulls Put Up A Stand
Yesterday, I wrote about the pullback getting a little old and the opportunity for stocks to find a low and rally. I offered that Dow 20,200 to 20,400 could provide some cushion. The Dow hit 20,400 yesterday morning and rallied nicely into the close with some follow this morning. Was that it? Pullback over? I am not certain, but we did do some buying yesterday to take advantage of the biggest bout of weakness this year. And it wasn’t much. […]
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Date: March 28, 2017
Pullback Getting Long in the Tooth
Stocks are set to open sharply lower today as the media and pundits assign blame to the GOP’s failed healthcare bill. I am not sure I really buy that notion as the bill was confirmed as dead during trading hours on Friday, but really, stocks began pulling back four weeks ago and accelerated lower as healthcare reform seemed less and less likely. Remember, it’s not the actual news, but rather how markets react. As I have been writing about this […]
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Date: March 27, 2017
Two Vital Canaries
After Tuesday’s “big” decline, there was some short-term damage done to most of the major indices. Rather than return immediately to new highs, I think we need a period to repair, which is not the worst thing in the world. A likely scenario is to see movement in both directions, perhaps into April, before the next leg higher begins. On the key sector front, semis and discretionary escaped most of the damage and should be poised to lead again. Banks […]
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Date: March 24, 2017
Teeth of the Pullback
As you know, for the past few months I have written about this overdue pullback to refresh the stock market. While I have written much about it, I am certainly not taking credit for getting the timing correct as I started discussing it many weeks before it began. Until Tuesday, the pullback, which began three weeks ago, has been about a shallow and mellow decline that has just gone sideways in consolidation mode. Tuesday was the ugliest day of 2017 […]
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Date: March 22, 2017
Going Nowhere
Well, at least last Wednesday was fun if you were a bull! The Fed raised rates by 1/4% as expected and stocks took off on the premise that there would only be two more interest rate hikes the rest of 2017. That hurt the banks and the economically sensitive sectors and gave a strong push to the defensive sectors. I remain skeptical of only two more hikes and stand by my forecast that four hikes are in the cards this […]
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Date: March 20, 2017
Fed to Hike Rates Today. Dow 23,000 Still On Track
Model for the Day As with every Federal Open Market Committee (FOMC) statement day, there is a model for the stock market to follow pre and post announcement. Certain environments have very strong tendencies while others do not. Three meetings ago was one of the rare times where the models strongly called for a rally on statement which was correct as well as a decline a few days later which was also correct. Today, there is a significant upside edge […]
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Date: March 15, 2017
Pullback Remains in Place. Junk May Hold Key.
The short-term pullback I have seemingly written about for weeks and weeks remains in place although I am certainly not taking credit for calling it in a timely fashion. The Dow, S&P 500 and NASDAQ 100 have all pulled back constructively while the S&P 400 and Russell 2000 are uglier. The three stronger indices are just about to kiss their 21 day moving averages, while their weak cousins knifed right through the 21 as well as their 50 day moving […]
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Date: March 9, 2017
Bulls Remain Large and in Charge Despite Pullback
We had a lot of negative news between Friday’s market close and Monday’s open, almost all on the geopolitical front with the vast majority surrounding President Trump. Of course, Deutsche Bank finally agreeing with the markets that they needed to raise capital was icing on the cake. In a weak market, that backdrop would have yielded a 1-2% lower opening on Monday. In a strong market, we’re talking about .25-.50% lower. Stocks are due and have been due for a […]
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Date: March 6, 2017
Volatility Genie Trying to Pop Out
After what has been celebrated as this huge, epic rally on Wednesday, the major stock market indices gave back all of their post 9:30am gains and then some on Thursday. I mentioned the other day that volatility compression leads to volatility expansion and vice versa. When the volatility Genie finally gets out of the bottle, we will probably see a sustained increase. I think we’re close to that now. Please remember, volatility does not always mean decline. It means wider […]
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Date: March 3, 2017
Hot IPO, SNAP, Comes Out. Time to Buy?
“Hot” IPOs like Alibaba, Twitter and Facebook are usually very emotional, much anticipated and huge financial media events. Investors clamor for these stocks, usually throwing caution to the wind as fundamentals are trampled by greed. The media are usually camped out at the NYSE or NASDAQ with minute by minute updates as to where the stock may open. As I have discussed over and over, emotion in investing can have a very detrimental impact on your portfolio! That’s one of […]
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Date: March 2, 2017
