Markets Full of Emotion and Tepper Speaks Out
So much going on today after such an emotional reversal on Friday. Let’s start with last week. After a rout on Thursday and an ugly morning on Friday, the bulls came roaring back across the board to close stocks near their highs for the day. Interesting to note that the major indices rallied 3-5% from their intra-day lows to the close. That is certainly emotional. One day reversal patterns look awesome on a chart, but they do not have the […]
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Date: March 8, 2021
Classical Dichotomy
In 1994 which seems like a lifetime ago, I played Rotisserie Baseball. It was the predecessor to all these super popular fantasy sports. 12 of us met right before the season began and we drafted our own teams from MLB rosters. Changes to rosters were permitted weekly although for an extra fee, you could do this daily and use what was called a fax machine to send in activity. On Monday’s the statistics service would snail mail leagues standings and […]
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Date: March 4, 2021
Strange End to Feb – Buying Weakness Remains the Play
What a very strange close to February. With the stock market up on the month and Friday a decent day, there were massive computer generated sell programs in the final 15 minutes that knocked the S&P 500 down more than 1.5% before recovering a bit into the close. Interestingly, there was not a TICK spike, meaning that the programs were not widespread. They were limited to a handful of major stocks in the index. We do not know why or […]
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Date: March 1, 2021
“EVERYONE” Talking Bond Yields Now
Thursday was an ugly day. It was one of those “throw everything out with the garbage” kind of day. All indices and all sectors were red. The surge in 10-year yields was blamed. As you know, my forecast for 10-year yields in the first half of 2021 was in the range of 1.3-1.4%. Bond yields hit 1.6% intra-day yesterday as you can see below. The next “logical” levels are 1.65% and 2%. I do not believe we see 2% this […]
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Date: February 26, 2021
That’s It? Decline Over?
Tuesday was certainly one of those wildly volatile days, the kind we saw often last March and a few times in June and September. What was interesting about Tuesday was that significant intra-day losses were reversed so close to an all-time high. That doesn’t happen all that often and from memory, it was behavior seen often as the Dotcom Bubble was fully inflating and about to peak. The question now is, was that it? Is the pullback over? To exaggerate […]
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Date: February 24, 2021
A Change in Tune? Decline Unfolding?
It would be impossible for any of my readers to not know my theme of epic greed and euphoria in the financial markets since late last year. Yet, stocks keep forging ahead, almost unabated except for a very brief 4% pullback a few weeks ago. Make no mistake about it, a sentiment landscape like this is not going to end well. To be crystal clear, excessive risk taking is going to be severely punished. Please do not email me with […]
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Date: February 22, 2021
Another Opp For The Bulls
Stocks have pulled back so mildly over the past few days with the Russell 2000, S&P 400 and NASDAQ 100 leading the way. Yet, there is a short-term buying opportunity in the stock market as today is an expiration day. Those indices that fell that hardest are supposed to bounce the most and likely to new highs. The key will be if one or more do not. That would be an opportunity to further prune and move away from the […]
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Date: February 19, 2021
Now It’s About Rates
The yield on long-dated treasuries is set to jump this morning and the pundits are all over this. You can see in the chart below that the 10-Year Treasury Note has gone from almost 2% a year ago to 0.40% at the height of the Corona Crash in March to almost 1.30% today. That is hardly a surge in long-term interest rates and a gross exaggeration that equity investors are going to eschew stocks for bonds. But yet, we have […]
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Date: February 16, 2021
SPACs the New Dotcom
It’s rare when my blog topics become the same day after day after day. I force myself to think if I am being lazy or there really is nothing new to write about. Perhaps some days, it is a combination of both. The major stock market indices continue to grind higher. Nothing new. My four key sectors, banks, semis, discretionary and transports are not all in sync at new highs, but they are all rallying. High yield bonds are at […]
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Date: February 10, 2021
It’s Confirmed. I Was Wrong
As you know, my thesis has been for an absolute minimum 4-8% pullback in Q1 to at least move the sentiment needle from greed and euphoric to neutral. Well, Mr. Market gave us the bare minimum 4% decline, but not only did it not repair anything, it has actually made the landscape even worse. Rather than weak handed investors selling, it seems like anyone not involved in the Gamestop Saga bought the decline. That was a bit of a surprise. […]
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Date: February 8, 2021
