All Signs Point to a Horrifically Wrong Decision by Yellen & the Fed
FINALLY, or YET AGAIN, it’s FOMC statement day. Unlike every meeting since 2007, I do believe the Fed is wrongly going to raise short-term interest rates for the first time since 2006. Since 2008, my thesis has been and continues to be that the Fed should not raise interest rates until the other side of the next recession. This is your “typical” post-financial crisis recovery that’s very uneven. It teases and tantalizes on the upside and frustrates and terrorizes on […]
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Date: December 16, 2015
Third Avenue Travesty
After peaking way back in 2014 and declining ever since, the high yield (junk) bond market has finally made national news over the past week with the very high profile blow up of the Third Avenue Focused Credit Fund (TAFCF). This was not some fly by night little fund or fund family. It’s a small, mainstream mutual fund family and the fund itself had more than $3 billion in assets in 2014. Last week, after massive withdrawals, the fund announced […]
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Date: December 16, 2015
Bye Bye Bernie
I have been watching the various presidential debates and haven’t missed one for the most part. I find them to be sometimes informative and on the entertaining side although the recent democratic one was a bit tortuous in my opinion (more on that later). The democrats have only had one, but I can’t get Bernie Sanders’ voice out of my head when I watch Seinfeld reruns. He sounds exactly like the actor who plays Yankees’ owner George Steinbrenner. I remember […]
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Date: December 11, 2015
Buy Small Caps for the Next Three Weeks
In my previous post, Underwhelming Rally but Don’t Count Out the Bulls, I was concerned about another “few percent” pullback given last Friday’s weak beneath the surface rally. So far, this week has been all red and it looks like stocks are getting closer to the low where the Santa Claus rally will begin. While the odds favor one more decline below Wednesday’s low over the coming few days, it’s anything but a slam dunk. I have been pounding the […]
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Date: December 10, 2015
Underwhelming Rally but Don’t Count Out the Bulls
Friday’s huge rally was fraught with bits of weakness. The ratio of stocks going up to down was just 2:1 on a 2%+ day when it should have been much, much stronger. The ratio of volume in those stocks should have been multiples stronger. New highs to new lows didn’t move much at all. The rally was narrow and underwhelming beneath the surface. As has been the case since summer, the stocks with the heaviest weightings in the cap weighted […]
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Date: December 7, 2015
Yellen Dousing Dollar & Stocks
After a big day for the bulls on Tuesday that did not close above the levels I spoke about to cause a spurt, stocks reversed on Wednesday and it looks really ugly on a chart. Bears will point to similar reversals at the major peaks in 2000 and 2007, which is true, but these kinds of reversals also occur routinely throughout a bull market. In analyzing their predictive power, they certainly have led to some short-term weakness, but the longer […]
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Date: December 3, 2015
Spurt or Pullback???
Stocks continue to digest the gains made in early November without giving up against the negative news backdrop. That’s a well supported, resilient market. When the major indices close above their November highs, we should see a quick spurt to the upside. If they fail to do so this week, I would not be surprised at all to see a mild 1-3% pullback lasting a week or two to set up the Santa Claus rally into 2016. My theme remains […]
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Date: December 1, 2015
Stocks are no Turkey
I hope everyone had a great and meaningful Thanksgiving. As I type this, my stomach has settled down and I am just about ready for an evening snack at halftime of the Packers/Bears game before they honor Brett Favre. Friday is another seasonally strong day on the heels of Wednesday. Don’t forget that the stock market closes at 1pm est. In my previous post I mentioned that the seasonal stats don’t forecast magnitude, just direction. What a perfect example as […]
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Date: November 26, 2015
Come on in Bears; the Water is Nice!
Although overnight indications had stocks down .5% two nights ago, by the time the closing bell rang, the major indices recouped all that and then some in yet another sign of resilience. It seems like every call and email I get and most conversations I have are with folks who have a very negative view of the markets. I continue to feel like I am on an island alone in my bullish view. The masses just dismiss the upside as […]
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Date: November 25, 2015
Bulls Come Back to Life
Stocks came into the week on their heels from the recent pullback and the horrific terrorist attacks in Paris. In my previous post, I offered that the odds favored some more weakness with a reversal this week. The market saw a quick bout of weakness to open the week, but quickly reversed into a very strong day for the bulls on Monday. While Tuesday saw some internal soft spots, the bears will have a tough time taking control unless stocks […]
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Date: November 18, 2015
