I Screwed Up
Yesterday, I said that all of our Fed related trends were muted to less than 60% accuracy. That was wrong. One of our best Fed systems said there was a 78% likelihood that stocks rallied. I didn’t realize this until well after 2pm when it was too late to email and take advantage. What a powerful response to the Fed not raising rates and issuing a more hawkish statement, exactly what I and most others predicted. I did find it […]
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Date: September 22, 2016
Yellen Set to Raise Rates, But…
As the Fed’s Open Market Committee meeting heads into day two, our own trends and systems for the trading day are surprisingly mute. Today typically sees stocks trade in a +.50% to -.50% band until 2 pm before the market gets a shot of volatility. Usually, we see a strong upside bias into the close, but the odds of that are under 60% from the usual 75%+. In other words, the edge just isn’t there today. Tomorrow, Friday and early […]
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Date: September 21, 2016
Bulls Continue to Ready Their Arsenal
The major indices begin the week without being on the same page as the multi-week pullback theme remains in place. This is very typical of a market that is digesting gains. Below is the S&P 500 where you can see the big red and green bars on the right side. Those were huge spikes in volatility in both directions. Over the past week, however, the bars have become shorter and shorter, meaning less movement from high to low each day. […]
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Date: September 19, 2016
Volatility Remains Elevated Until the Bulls are Ready Again
While stocks didn’t much on the surface on Wednesday, it was definitely disappointing for the bulls that there hasn’t been any follow through from Monday’s big reversal. The bulls should make another attempt on Thursday. The pullback theme remains intact, but we are starting to see some more encouraging readings in the sentiment area, specifically on the ETF volume side. The most prominent ETFs, SPY and QQQ have seen volume spike lately which means that investors are favoring the liquidity […]
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Date: September 14, 2016
Questioning Brainard’s Ethics Again
What a show of strength by the bulls on Monday. After what looked like a continuation of Friday’s bloodbath, the bears folded like a cheap suit shortly after the open. Credit is being giving to Fed head, Lael Brainard, who gave a very dovish (against raising rates) speech, but the truth is that stocks were already moving up long before she took the podium after lunch. Her comments just added fuel to the fire. By the way, this is the […]
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Date: September 13, 2016
Not the Fetal Position
Last week, my theme focused on a pullback in the stock market. More importantly, my strong opinion was that it wasn’t a bout of weakness where people should sell in to, but rather to use that opportunity to buy the dip or re-position a portfolio to where it should be over where it was. Friday was an ugly day across the board. Overwhelmingly red. 96% of the volume on the NYSE was in stocks that were down. Besides stocks, bonds […]
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Date: September 12, 2016
Pullback Remains But Transports…
The Dow and S&P 500 are still lagging the other major stock market indices in pullback mode, but contrary to what you may think, this remains a very healthy environment for stocks. In the strongest markets, the more “risk on” indices are the ones charging ahead. That’s the case now with the S&P 400, Russell 2000 and NASDAQ 100. The NYSE Advance/Decline Line which measures broad participation recently scored yet another all-time high and high yield bonds are hanging in […]
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Date: September 9, 2016
Still in a Pullback
Over the past few trading days, stocks gathered a little steam, but I still think the markets are in the midst of yet another pause or tiny pullback. It is amazing, however, that we have not seen a 1% in either direction since the post-BREXIT rally in early July. I have been saying nonstop that we saw historic strength coming out of the Y2K like BREXIT and that strength would not dissipate so quickly. Frankly, I thought we would have […]
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Date: September 7, 2016
What a Pullback Looks Like
Stocks have gone essentially nowhere for a month. Bulls, like myself, view this as a healthy period of digestion or consolidation before the next leg of the rally begins. Bears argue that stocks have peaked and they are headed much lower. As I have mentioned for months and months, I don’t think the bull is over or close to that point. There have been too many strong indications of more upside that typically do not occur as a bear market […]
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Date: September 1, 2016
Beneath the Surface
Listening to the media, you would think that absolutely nothing has gone on in the stock market this month. While it’s true that the Dow, S&P 500 and NASDAQ 100 have gone nowhere, the other two major indices, S&P 400 and Russell 2000 have seen some gains. Nothing to write home about, but the bulls should take it! Additionally, and very quietly, high yield (junk) bonds, perhaps my favorite canary in the coal mine broke out again on Monday, further […]
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Date: August 30, 2016
