***Special Fed Update – “Our Progress Has Stalled” – “Oops I Did It Again”***
This will be a quick Fed update as I am traveling and lost two hours this morning when my Uber ended up at a mobile home park rather than at the airport. The stock market model for the day is plus or minus 0.50% and then a volatile rally after 2pm. Given the weakness this week, the model is reinforced and has a stronger likelihood of success. It is also the first day of the month coming on the heels […]
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Date: May 1, 2024
Did Friday’s Big Rally Change Anything?
What a nice day for the bulls on Friday. In the morning blog, I discussed the possibility of the Q2 bottom being in versus just a better bounce and then final low in May. Regardless of the scenario, the plan was to position for higher prices and then manage risk. It didn’t take the S&P 500 nor NASDAQ 100 long to exceed last week’s peak. It happened faster than I thought. While it’s not clear sailing from here, there should […]
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Date: April 29, 2024
Was That It?
Stocks staged another wicked reversal on Thursday after opening sharply lower on Facebook’s poor earnings report as well as Q1 GDP coming in much lighter than expected with still sticky inflation. More than whispers of 1970s style stagflation are making the rounds. Recall that stagflation is stubbornly high inflation with essentially no economic growth. It puts the Fed in a box as they can’t cut rates to spur on the economy and it’s tough to hike too much for fear […]
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Date: April 26, 2024
The Bounce Arrived On Schedule – Now What?
The stock market bounced pretty much on schedule and looks higher this morning. I suspect the initial rally may pause in here and some pruning could be in the cards. While it’s not my preferred scenario, I guess it’s possible that stocks bottomed already, but I still think the absolute low lies ahead next month, even if it’s just at marginally lower levels. Some very high profile earnings are coming out this week with Tesla reporting some pretty awful news […]
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Date: April 24, 2024
Weak Indices Masking Some Underlying Strength
Friday was another down day on the ugly side with the S&P 500 down 1% and the NASDAQ 100 was down 2%. However, the Russell 2000 was up and there were 1000 more stocks going up than down on the NYSE. For a change, the generals were weak, but the troops were strong. Keep that tidbit under your hat and don’t toss it aside. The new week starts with all of the major stock market indices oversold on a short-term […]
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Date: April 22, 2024
Two Enemies Of The Stock Market
It has been a heavy week in the stock market, especially in the NASDAQ 100. Every early rally has been met with selling and I have found very few things that are appealing enough to buy. On the flip side, because there hasn’t been any intervening rallies, not many things have looked appealing enough to sell. Below is a culprit, long-term interest rates. I will say this and be crystal clear. The bulls absolutely do not want to see the […]
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Date: April 19, 2024
Pullback Proceeding On Schedule – Time Is Needed
Monday saw the largest down day since the stock market peaked last month. There was widespread selling with 90% of the volume in stocks going down versus up. Below is a chart of the S&P 500 with the 90% volume below. Over the past 6 months, we have seen two instances like this with stocks bouncing and then pulling back before heading to new highs again. Further supporting my thesis is the chart below. At the recent peak there were […]
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Date: April 17, 2024
Seasonally Positive Tailwind Against Middle East Escalation
Happy tax day (said with sarcasm)! The stock market has been seasonally strong on tax day as well as the day after. First, the middle of the month typically sees inflows from 401K and other retirement plans. Add on top of that the billions in last minute IRA contributions and you have a nice tailwind for two days. I think the best way to play that is to buy weakness. If stocks up higher and continue to run, I would […]
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Date: April 15, 2024
Stock Market Pullback Proceeding on Schedule – Gold, Apple & Nvidia
Since the March 27th peak, we have seen a few mild pullbacks in the major stock market indices. That March high although late in the quarter is precisely what our work had been suggesting since the year began. As usual, they didn’t make it easy. I remain of the opinion that it was not a peak of significance. Rather, the market would embark on a one to two month decline that would be less than 10% and bottom by Memorial […]
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Date: April 12, 2024
All Eyes on CPI But Does It Matter?
With the Consumer Price Index due out at 8:30am, that is almost guaranteed to be the talk of the day. As I have been mentioning all year, my thesis is that inflation remains stubbornly elevated with 3% being the new 2%. I have been writing about inflation bottoming and the last few months have certainly proven that. I don’t have strong conviction about this one single number. When I look at the yield on the 10-Year Treasury, it broke out […]
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Date: April 10, 2024
