Is the NASDAQ 100 the New Dotcom Bubble?
Another day, another surge by the NASDAQ 100 without the rest of the indices joining the party. You know the few stocks. Apple, Amazon, Netflix, Microsoft, Nvidia, Facebook, Google and a few more. The Dow Industrials, S&P 500, S&P 400 and Russell 2000 are not behaving well. This is not, not, not 1999 and the Dotcom Bubble, but, but, but this is still dangerous behavior that can lead to consequences tomorrow, next month or next year. Remember, markets can stay […]
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Date: July 10, 2020
It’s All About The NASDAQ 100
On Monday it was interesting that so many in the media spent much of the day focused on the NASDAQ 100 and those few behemoth stocks within that index which seem to only go up. You know the ones. Facebook, Amazon, Apple, Netflix, Tesla, Microsoft, Google, Nvidia and a few others. First, it was all about how anyone could or should own anything else. Then it was comparing them to the Dotcom era. They were wrong on both counts. As […]
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Date: July 8, 2020
Young Bull Market Not the Rising Tide Lifting All Ships
I hope you had an enjoyable and peaceful July 4th holiday. Living in CT, it definitely lacked the “feel” of traditional July 4th weekends. No town fireworks. No big gatherings. Nothing special. Last week was one for the bulls as they fought off early weakness and ran higher right to the June employment report which was another record setting shocker on the upside. I actually thought there would be some mildly lower revisions from that eye popper a month ago. […]
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Date: July 6, 2020
Portfolio Games Over But All is Not Well in Hooville
The end of the month, quarter and first half of 2020 are now in the books. Portfolio managers played their usual games on Tuesday, especially in the final 15 minutes of trading where stocks spiked and immediately fell. While illegal, it is beyond hard to prove that a manager was “painting the tape” or trying to mark up the portfolio while other folks sold garbage they didn’t want to show on the books and bought what has worked during the […]
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Date: July 1, 2020
Stocks Could Bounce But Better Buy at Lower Levels
As was the theme for last week, stocks closed lower on Friday and for the week. Some of the headwinds I wrote about have dissipated and the big, annual rebalance in the Russell indices was completed on Friday’s close. While I don’t think the bulls are ready to reassert themselves for a run to new highs, the market is certainly oversold on the short-term and could support a little bounce. Heading into the holiday-shortened week, one of my favorite weeks […]
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Date: June 29, 2020
Trading Range Continues. Puckering Up for Dow 25,000
The theme for the week has been one of caution, not because of the Coronavirus, but because after the four, big quarterly options expiration, the stock market usually faces a headwind. Add on top of that, we have a massive quarterly rebalance out of stocks and into bonds to the tune of somewhere between $100 and $200 billion. And then there is that “little” thing called the annual Russell rebalance which takes place today at the close. There have been […]
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Date: June 26, 2020
The Week Continues to Unfold as Expected
On Monday I wrote about the headwinds facing the stock market this week in https://investfortomorrow.com/blog/this-week-is-usually-down/. We have post-options expiration and end of quarter during an uptrend. Yesterday, I wrote this in an email. “On top of that we have the polar opposite quarterly rebalancing that we had in March when stocks had sold off so much that more than $100 billion had to be purchased in stocks at quarter’s end by institutions following a set asset allocation, like 60/40. With […]
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Date: June 24, 2020
This Week is Usually Down
Friday saw another one of those “ugly on a chart” afternoon reversals as Apple announced a fresh round of store closings in the states that recently reopened. I am sure a lot of people saw the re-openings as easy and as expected, but the truth is much different. It is going to be lumpy and uneven with varying degrees of success and failure. One thing remains a certainty in my humble opinion; the U.S. economy will never be completely shut […]
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Date: June 22, 2020
Volatility Drops as Short-Term Sentiment Remains Frothy
The stock market has been relatively quiet the past few days. Don’t complain. While it’s a welcomed change, it’s also very normal and healthy to wring more volatility out of the market. Friday is one of the big quarterly expirations of options and futures so we can expect enormous volume right away. Depending on which source you believe, there is supposedly between $50 and $80 billion dollars of equities that needs to be sold. Looking at the non-NASDAQ major stock […]
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Date: June 18, 2020
It Didn’t Feel Like a Correction
From high to low on a closing basis the major stock market indices pulled back 7-12% over a three-day period ending last Thursday. On an intra-day basis, those figures are another percent or so more. It sure didn’t feel like a correction. It happened so quickly. But remember how compressed the stock market has become. Looking at the chart below of the Dow Industrials, we can see that the bout of weakness had the index decline to that horizontal, blue […]
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Date: June 17, 2020
