Sell the Rally – Bottom Not In
Stocks got hit with the ugly stick again on Tuesday. If you are keeping score at home, the NASDAQ 100 fell 11% in just three days. No one should be surprised this happened as I have been discussing it since mid-July. Sentiment got giddy and greedy, just like it was in February. Greed is almost always punished swiftly and sharply. Everyone’s favorite stock split plays, Tesla and Apple, plummeted 35% and 20% respectively. Zoom got hit for 27%. These are […]
Read More
Date: September 9, 2020
Bears Not Ceding After Friday’s Reversal
After Thursday’s major rout in the stock market, especially in the much ballyhooed mega tech sector, investors found out super quickly that their love affair with the Fab Five Plus is now a two-way street. Yes, indeed folks, Apple, Amazon, Facebook, etc. can do down even faster than they rallied. While most investors did not enjoy that behavior, it is a welcomed return to more normal activity. It’s also something I warned about last month when I wrote about selling […]
Read More
Date: September 8, 2020
September Not as Bad Beneath the Surface – Ugly Stick Out in Full Force on Thursday
As the calendar has turned to September, let’s not forget all of the pundits who incorrectly warned about August being such a tough month. While there is nothing wrong with being wrong (I do it every day), there is a lot wrong when you are lazy and do not do your homework. Those who painted August with a broad brush just recited some stat they saw on Twitter. Instead, they should have been reading this blog and learning about the […]
Read More
Date: September 4, 2020
Might the Bears Growl a Little?
It’s strange waking up to see the NASDAQ 100 futures down 100+ points. I quipped on Twitter the other day that the new norm was seeing them up 100+ every morning. Let’s keep this all in context. The index is up 4% over the past 5 days and 14% over the past month. It’s up 40% over the past 6 months. It’s been one helluva run! The Fab Five Plus stocks which make up a good portion of the index […]
Read More
Date: September 3, 2020
Bulls Refuse to Give Up Ground
As you know, I have written many pieces lately about my concerns around the NASDAQ 100 and Fab Five plus a few stocks. Between “everyone” loving those few stocks and the indices hitting new highs with more stocks declining than advancing and overall sentiment on the giddy side, there has been no shortage of cracks in the market’s foundation. Yet what has happened? The bulls have run right over the bears each and every time. The NASDAQ hasn’t had even […]
Read More
Date: August 31, 2020
2009 Argues for Much Higher NASDAQ 100
As I tweeted the other day, the powers that be at Dow Jones have completely turned the venerable Dow Jones Industrial Average into a manipulated farce. They threw out three low priced stocks and added three high priced stocks. I speculate that this was all about Apple’s 4:1 stock split. Remember that the Dow is a price weighted index. That means that every 1 point move in a Dow stock now equals roughly 7 Dow points. When Apple was $500, […]
Read More
Date: August 26, 2020
Everything is Hunky Dory – Apple a Selling Opp
Market action is definitely feeling like 1999/early 2000 when the hot NASDAQ stocks were melting higher right out of the gate every morning. More importantly, there were so many days with horrid market internals and prices just kept going higher. Last Friday may have been the most egregious since the bull market began in March. On the NYSE there was almost two stocks declining for every one stock rallying. That behavior usually occurs on a one percent down day. Instead, […]
Read More
Date: August 24, 2020
Price Action Like the Dotcom Era
A quick update as we have seen so much more of the same this week, but even more exaggerated. The NASDAQ 100 and the Fab Five plus Nvidia have powered ahead without taking the vast majority of stocks with them. The price action looks like late 1999 and early 2000 with the index scoring new high after new high with more stocks down than up and the amount of shares trading in stocks going down swamping those in stocks going […]
Read More
Date: August 21, 2020
Thank You Warren Buffett
It’s hard to argue that the dog days of summer are here. Like so many other expressions (sick as a dog), I had no idea where they came from until Google and Wikipedia were invented. Now I feel so informed. The major stock market indices have really gone to sleep over the past week. It’s been so quiet. Thankfully, Warren Buffett provided a little excitement after the close on Friday when he disclosed a purchase in Barrick Gold, an industry […]
Read More
Date: August 17, 2020
Common Questions About a SEP IRA
Your standard IRAs and 401(k)s hog a lot of the attention when it comes to defined contribution retirement plans. While these can be terrific vehicles for creating a long-term nest egg, we don’t want to discount another effective option, the SEP IRA. At Heritage Capital, we’re often asked about the SEP IRA, which can be a low-cost alternative to other employee retirement plans. Can I convert a SEP IRA to a Roth IRA? Can I roll a SEP IRA into […]
Read More
Date: August 17, 2020
More Warning Signs – More the Bulls Just Run Over Them
I use the high yield bond market in a number of ways at the firm. It’s an asset class that’s used in five of our models as well as a vital canary in the coal mine. This week, Ball Corp., issued a 10 year high yield bond with a coupon (yield) of just 2.875%. That’s under 3% for a junk bond and bordering on insane! If you want to gauge the appetite for risk and yield, look no further. Now, […]
Read More
Date: August 14, 2020
Is Big Tech Cooked? Nifty Fifty May Guide Fab Five
It’s certainly no secret that I have been negative on big tech and concerned that the epic run relative to the rest of the stock market exceeded even the Dotcom Bubble levels. This has been the case for the past month. The only thing that has changed lately is that the broader stock market, which peaked on June 8th, has stepped up to lead. That was one of the outcomes I have mentioned. Dow Industrials, S&P 400, Russell 2000, banks, […]
Read More
Date: August 12, 2020
***End of Q2 Client Update***
Many people like to read my very brief quarterly client update which I select excerpts. If you’re one of them, please read on. If not, feel free to delete now. First off, I hope you are continuing to stay healthy and sane. I am going to do something different to open this report. Why not? It’s 2020 after all. I want to answer the single most asked question by an exponential factor from clients, prospects and the media. Why have […]
Read More
Date: August 10, 2020
Plenty of Warnings Signs for Stocks – Bulls Run Right Over Them
The bulls have run hard this week although the window of opportunity for a decline has not closed yet. There are all kinds of cracks in the market’s foundation. So far, each and every time the market has just run over them. And before someone asks, the answer remains yes. I am still very concerned about the outperformance in the NASDAQ 100 and those 5 stocks in particular versus the rest of the market. No matter how you slice it, […]
Read More
Date: August 7, 2020
Warning Signs Abound, Price Powers Ahead
Full of cracks and warnings, the new bull market continues to chop higher. The S&P 500 has exceeded its June 8th high without much fanfare while the Dow Industrials, S&P 400 and Russell 2000 have still been unable to best their June highs. Of course, the NASDAQ 100 remains in a universe of its own although as we have discussed, it’s really just a handful of stocks. You know the ones. Apple, Facebook, Netflix, Amazon and Microsoft. The warning signs […]
Read More
Date: August 5, 2020
August Not Kind to Bulls… On The Surface
As the calendar turns to August, we see a month that has not been kind to the bulls, regardless of whether stocks began the month in an up or downtrend. Bulls have been lucky to escape the month in the black as the average return is right around the unchanged mark. Additionally, the two-month period of August and September has been the weakest two months of the year. While staying on the calendar, let’s hone in on election years overall […]
Read More
Date: August 3, 2020
Taxes, Retirement and Your Investment Strategies
In response to the economic hardship caused by COVID-19, the federal government extended this year’s tax-filing deadline from April 15 to July 15. The state of Connecticut also extended the deadline to match the new date. While this obviously gave Americans more time to file and pay any amount owed to Uncle Sam, this extension of the tax-filing deadline offers a number of other financial benefits – if you use it to your advantage. There are many long-term and short-term […]
Read More
Date: August 3, 2020
NASDAQ 100 Ceding Leadership
When we left off on Monday, it was time for the bulls to step up in technology as the insanely strong momentum streak had ended. Let’s give the bulls credit; they stepped up in a big way on Monday. However, that move was almost fully reversed on Tuesday. We have a good old fashioned tug o’ war as some of the NASDAQ 100’s largest components are set to release earnings. I will continue to take the glass half empty side […]
Read More
Date: July 29, 2020
Momentum Streak Ends for NASDAQ 100
On Friday I wrote about the NASDAQ 100 crossing a very obvious line in the sand that “everyone” has been watching. Remember, the NASDAQ 100 which is heavily weighted to Apple, Facebook, Amazon, Google and Microsoft had not closed below its average price of the past month since early April. In fact, I don’t even think it has seen back to back down days since early May. That’s a feat! In other words, it has had historically strong momentum. With […]
Read More
Date: July 27, 2020
NASDAQ 100 Crossing Line in the Sand
This is going to be a really short update because I am way behind schedule and stocks have been behaving as I have spelled out for two weeks. Today’s close will be somewhat important for the short-term as the bulls are on their heels, especially those playing momentum stocks. For weeks, I have written about the NASDAQ 100’s idiosyncratic behavior versus the other four major stock market indices. You can search the archives to read about how stretched this index […]
Read More
Date: July 24, 2020
