Opportunity to Bottom Today
I have been targeting this week for the December bottom and rally into January which occurs roughly 80% of the time. While Monday failed to deliver, Tuesday looked more constructive and Wednesday looks like it may confirm the low. We will see after the close. I want to see a close above Tuesday’s high as well as price closing in the upper half of Wednesday’s range. And as I always do, if the stock market closes below Tuesday’s low, I […]
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Date: December 21, 2022
Void of Data Begins
The financial markets survived the FOMC meeting, inflation report and Friday’s enormous expiration of options and futures. And by survive, I mean that the markets did not implode, but they did not come away unscathed. Last week, I offered that the stock market should put in at least a short-term low by the end of this coming week. That’s still the plan. The first opportunity comes right away on Monday with a close above Friday’s high. While few setups look […]
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Date: December 19, 2022
Fresh Selling Wave Hits Post CPI
It certainly has been a wild few days and it’s not over. Between the Fed meeting, CPI report and today’s gargantuan expiration of futures and options, the markets have had an overwhelming amount of information to absorb. Volatility has been high. For December, it has been on the extreme side. While I am sure it is different as most are, this has the feel of the early June selling wave with multiple days down and gap down weak openings. Look […]
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Date: December 16, 2022
Disappointment on Friday
A few interesting tidbits from Friday’s action. The bond market as measured by TLT sold off a whopping 2.6%. Instances like that were seen 7 times so far this year, 4 times in 2020, 4 times in 2011 and 7 times in 2009 plus a few other random happenings along the way. In 2022 none of them marked the bottom but other years saw more favorable results going forward. While I did not buy any bonds on Friday because it […]
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Date: December 12, 2022
Semis & Banks Offer Opposing Views – Home Heating Oil Update
It has been a crummy little stretch for stocks and other risk assets, having given back the entire Jay Powell pivot chat from last week.That was when Fed Chair Powell was interviewed by David Wessel and really just slightly came off his uber hawkish view and said that a 1/2% hike was coming next week. As I have been writing about for months the dollar and the 10-Year have come way off their highs which is good for stocks and […]
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Date: December 7, 2022
White Hot Jobs Market & Yields Go Down
On Friday the government released the employment report for November which showed 263,000 new jobs being created. That was well above the 200,000 estimated. Unemployment remained steady at 3.7%. We also saw wages increase at 5.1% on an annualized basis. While this is great news for Americans and the economy, it is not what Jay Powell and the Fed wanted to see. Recall that the Fed is on an inflation fighting crusade. Let’s remember that Fed action takes 6-9 month […]
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Date: December 5, 2022
More Props For The Bulls
Wednesday was a huge day for the bulls. It started out mildly until Fed Chair Powell spoke with David Wessel from the Brookings Institute. Then the fuse got lit and risk on assets soared. Almost 90% of the day’s volume was in stocks that went up. The Dow Industrials, S&P 500, S&P 400 and NASDAQ 100 all went to new highs for Q4. Only the Russell 2000 lags. Below you can see the percent of stocks in the S&P 500 […]
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Date: December 2, 2022
Slice It How You Want, Yield Curves Point To Recession in 2023
It’s no secret that I have been steadfast this year that the U.S. economy has not been in recession. And yes, I do know that both Q1 and Q2 saw negative GDP growth. It doesn’t matter. That’s not a recession. Sorry. And I am not going to feed into the political nonsense regarding the definition of recession. The National Bureau of Economic Research is the final arbiter of recessions, not politicians nor pundits. Anyway, my economic forecast for 2023 isn’t […]
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Date: November 30, 2022
Seasonal Headwind Today As Black Friday & Cyber Monday Get Weighed
Welcome back to the last week of November. I hope you had a great Thanksgiving! I ate my face off and just finished leftovers this morning for breakfast. I refuse to loosen my belt so it’s going to be an uncomfortable week. My mom and wife went all out with the traditional fare as well as something unusual. Teri makes the single best challah on earth and last week she shaped one into a turkey. Between the Cowboys winning and […]
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Date: November 28, 2022
The Pieces Are Falling Into Place
As I mentioned on Monday this week has a seasonal tailwind, but especially Wednesday and Friday. Then next Monday has a headwind. I found it so interesting that as stocks rallied in broad-based fashion on Tuesday, pundits became so enamored. Since the October 13th bottom, all we have heard was folks selling the bear market rally. Now it seems like pundits pivoted to buying for a year-end rally. I guess after a 12% rally in the S&P 500, the masses […]
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Date: November 23, 2022
