The “Easy” Trade in Apple
On January 3 Tim Cook shocked the investment by pre-announcing earnings problems and slowing iPhone sales. Fundamental analysis is above my pay grade so I am not going to go any further. It was shocking because I couldn’t find any other pre-announcement since 2002. There may have been one, but it wasn’t easily found. The stock had already collapsed from $233 to $147 before the warning. That magnitude, 37%, is not what you normally see even during a 20% decline […]
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Date: January 30, 2019
Semis & Junk Bonds Say the Bears Are Wrong
After trying to score new recovery highs late last week, stocks are set to open modestly lower to begin the week full of earnings and the first FOMC meeting of the year. For now, I am sticking with the same theme from last week. The market is in pause or pullback mode. So far, stocks have done nothing wrong. Leadership has been strong and constructive with all four key sectors contributing. I have to say; behavior in the semis is […]
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Date: January 28, 2019
Risk in Both Directions is Small
In Monday’s post, I briefly discussed “V” bottoms and their rarity. I also mentioned that stocks had come very far, very fast and that a pullback or pause was due right about now. So far, stocks have perfectly paused and mildly pulled back. If the rally from the Christmas low remains fully intact, the pullback should be over with either some additional sideways action for the market or a return to new recovery highs next week. It’s that easy right […]
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Date: January 24, 2019
“V” Bottom But Pullback Due Right About Now
Stocks closed at their highest levels since December 6th on Friday, wiping out 100% of the vicious and relentless selling wave I wrote about for so long. So far, the bottom has had the shape of a “V” which is not only rare, but generally uncomfortable for me as “V” bottoms are more characteristic of bear market than bulls. To counter that, there have been numerous confirmations that the rally since the Christmas low is a blast off of a […]
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Date: January 21, 2019
Bulls Continue to Do Nothing Wrong, Yet
Stocks continue to do nothing wrong as they bounce sharply from the epic selling wave in December. On Tuesday most of the major stock market indices made new recovery highs. Leadership has been constructive, meaning the more aggressive sectors have been leading. Risk on, if you will. However, stocks have also rallied right into the zone I first mentioned on December 21 as the most logical area where the bears could put up a fight. From here we will see […]
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Date: January 16, 2019
Equilibrium or End of Rally?
Almost on cue, stocks began to either stall out or moderate as they entered the lower end of the zone I first offered on December 21. That is a logical place for some to takes chips off the table if a revisiting of the Christmas lows is going to happen sooner than later. So far, stocks have done nothing wrong, especially with high yield bonds and bank loans snapping back so strongly in 2019, but I am not going to […]
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Date: January 14, 2019
Stocks into Zone Where Rally May Stall or End
It’s been one heckuva start to 2019. Just listen to the media and pundits tell you how stocks have rocketed 7, 10, even 12% since Christmas. While that is true, it’s a bit misleading as they forget the carnage from Q4. As I wrote about here and here late last year, there was certainly a preponderance of evidence to suggest a bottom and vicious bounce. That has come to fruition and I am glad the market is cooperating with the […]
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Date: January 11, 2019
Manic Market
It really is amazing how stocks go from never being able to rally to never being able to decline. After the stock market hammered out the bottom on December 26, the reaction by bulls has been easy to predict. I only wish I did a better job leading up to that low in December. Live and learn which I always do. At this point, we have seen epic buying since December 26 with all kinds of very positive indicators triggering […]
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Date: January 10, 2019
My Oh My. That was Quick
In my last blog post, Apple had pre-announced less than expected earnings news and stocks were looking sharply lower on Thursday morning. Besides commenting that it was probably a day to just sit back and watch, I also offered that historically, news like this from Apple usually comes near stock market lows.Thursday had an unusually dour feel to it. It seemed like the parade of pundits were all talking about an immediate retest of the Christmas week lows and that […]
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Date: January 7, 2019
Santa Claus Came a Callin’
The media spent the period from just after Thanksgiving to mid-December parading out pundits to talk about the Santa Claus Rally (SCR). Most of those pundits said the SCR was failing and it meant trouble for the stock market in 2019. I wrote several times that the traditional SCR, pioneered by Yale Hirsch of the Stock trader’s Almanac, was simply the last five trading days of the year and the first two days of the new year. An up SCR […]
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Date: January 4, 2019
