Seasonal Soft Patch, Sector Rotation and the Greenback’s Plunge
As I started to mention the other day, during this time of year we have a very light, seasonal soft patch in stocks that usually begins with the rally moderating, then going sideways and finally pulling back mildly. With momentum so strong right now, we will see shortly if this comes to fruition. The rally has been moderating but that’s been it. Very quietly, we have seen the defensive sectors like REITs, staples and utilities really start to lag as […]
Read More
Date: December 4, 2020
December Seasonally Strong with Soft Patch Coming up to Santa
The last month of the year has begun. Usually at this time of year I comment that I can’t believe how fast the year flew by. However, 2020 hasn’t conformed to any historical norms. It feels like the year that just won’t end. The year that time stood still. December is the second month of the strong seasonal period of November through April. December is also one of the strongest months of the year. Going one step further, December is […]
Read More
Date: December 2, 2020
Seasonal Weakness Today – Big Sea Change Elsewhere
Last Wednesday’s and Friday’s very strong seasonal tendency came in a bit muted, however with such a powerful rally coming into those days, no one can be surprised. Today, there is a strong headwind as the Monday after Thanksgiving always is. It is also the last day of the month where some portfolio games are sometimes seen. Over the past week or so, there has been a subtle shift back into the Fab Five Plus mega cap technology stocks and […]
Read More
Date: November 30, 2020
Strong Seasonal Trend – Market Frothy
I hope everyone had a happy, safe and meaningful Thanksgiving! Today is one of those abbreviated trading sessions where many market participants often skip. While I would rather be skiing if I am being honest, my recovery is preventing that so off to the office it is. The Friday after Thanksgiving has a very bullish seasonal edge, even stronger than the Wednesday before which did not work out. Next Monday has a strong headwind so super short-term traders might be […]
Read More
Date: November 27, 2020
Seasonal Trends Cranking Up
There has been so much written about the strong seasonal trends this week, specifically Wednesday and Friday. They are historically strong days, followed by next Monday being seasonally weak. The details do not matter. However, let’s remember that stocks have been in rally mode since October 30 with barely a whiff of weakness. Don’t be surprised if some or much of the seasonal tailwind dissipates. And while on the topic of positive tailwinds, we know the period from November through […]
Read More
Date: November 25, 2020
Yellen the Safe Pick – Brainard not Far Behind
Joe Biden et al leaked that Janet Yellen will become his Treasury chief. Lost in the celebration of her becoming the first female to do this is that she that Wall Street absolutely loves the pick. I suspect a whole more than the progressive wing of the Democrats. Yellen is a known quantity and least concerning about upsetting the apple cart. Let’s not also forget that she should sail through a red or blue Senate for confirmation. Biden knows her […]
Read More
Date: November 24, 2020
Sentiment Giddy
Last week, I listed a number of reasons why the stock market was on a solid foundation. Today, I want to counter that and offer concerns on the sentiment side of the equation. Remember, in the past two updates I described a tug o’ war or dichotomy. Below is a chart which shows the weekly bull/bear poll from the American Association of Individual Investors. Last week you can see in green there were more than 50% bulls while the bear […]
Read More
Date: November 23, 2020
Stock Market’s Foundation is Rock Solid
As I mentioned the other day, stocks haven’t soared beyond their Pfizer Monday highs like most people “feel”. In fact, the opening from two Mondays ago turned out to be a pretty good selling opportunity in real time and in hindsight although I do not see this as a peak of any significance. There are two points of view now and both may end up being right. I briefly touched on the fact that market sentiment has become on the […]
Read More
Date: November 19, 2020
I’M BACK – Markets Happy
As Randy Quaid said in Independence Day, Arnold said in Terminator and Jack said in The Shining, I’M BACK. Well, kinda, sorta. While Randy and Arnold were awesome in those movies, Nicholson is among the greatest actors ever and The Shining may be the greatest horror movie of all-time. I still remember watching it from under a table in my parents’ house with blankets making a fort around me. Hearing people say “redrum” continues to give me chills. As I […]
Read More
Date: November 18, 2020
Why People Don’t Participate in Their 401(k) Plans … And Why That’s a Big Mistake
Here’s a shocking statistic: In 2018, almost 30 percent of private sector workers with access to a 401(k) or similar plan did not participate. Here’s another one: About 20 percent of participants don’t take full advantage of their employer’s matching program. As the founder of Heritage Capital, this boggles my mind. Failure to fully take advantage of a 401(k) is truly a big mistake and can mean a shortfall of hundreds of thousands of dollars at retirement time. Why are […]
Read More
Date: November 17, 2020
The Light at the End of the Tunnel – Thank You Pfizer!
It was amazing to wake up to see the huge success of Pfizer’s COVID vaccine! 90% efficacy. What a total game changer for the country and the world with hundreds of other vaccines and therapeutics behind that. I know that I will be the first in line when they allow me to receive the vaccine, probably next year. (For full transparency, we own Pfizer which has been a dog for too long.) Global stock markets are soaring again, but I […]
Read More
Date: November 9, 2020
Fed Day – When the Ducks Quack, Feed Them
Although we don’t officially know the election results, it seems all but certain that Joe Biden will win and Mitch McConnell will remain Leader. And the markets are absolutely loving it. There were plenty of chances to buy ahead of this melt up and I was crystal clear about it last week several times. Now may be a better opportunity to feed the ducks as they are quacking. In other words, investors are hungry for stocks this week when they […]
Read More
Date: November 5, 2020
President Biden & Leader McConnell – Markets Celebrate
Although the election remains too close to call, the markets have done a good job at telling us that the Senate will remain red while Joe Biden will likely win the presidency by a few electoral votes. That means political gridlock will continue which is exactly what the markets like. Neither party can push through their agenda. I haven’t done the research, but I don’t recall any time in the modern era where the House was blue, Senate was red […]
Read More
Date: November 4, 2020
Our Election Model Has Spoken – And a Guarantee Thrown In
As I often do when a long-awaited event is here, Kenny Loggins said it best, “This is it, make no mistake where you are… The waiting is over”. While we may not know the election results by the time I get back to the office tomorrow morning, at least it will be over in almost every state. More on that later. Our own internal election model is based on three different series of stock market returns with varying weights to […]
Read More
Date: November 3, 2020
Election Like Y2K – Smart Money & Tech Behaving Poorly
It’s been a long year. It’s been a long election cycle. Thankfully, it’s the bottom of the 9th and two outs. No one wants the game to go extra innings. For the past week or two I have written that whatever stock market move happens into the election, plus or minus a day or so, the opposite move should happen this week. In short, the bulls should steady themselves and a rally should begin. That’s a pretty exact forecast and […]
Read More
Date: November 2, 2020
Are You Part of this Retirement Statistic?
I read recently that only 40 percent of Americans have calculated how much they need to save for retirement. That statistic is shocking! Knowing how much to save now can seem mysterious, but it really shouldn’t be. How do you reach a goal if you don’t know what to do to get there? This is a fundamental step for any goal, but retirement may be the most important one you have. Living comfortably when you no longer receive a paycheck […]
Read More
Date: November 2, 2020
Approval Ratings Forecast Election Winner – Looking for a Big Reversal Next Week
Surprise? Before I get into the topic of how approval ratings can predict the election, I want to predict that there will be positive vaccine and/or COVID news by Tuesday. The Trump campaign knows where they stand and that is probably their Hail Mary although with more than 60 million votes already cast, it would be hard to believe that any news between now and Tuesday can sufficiently influence the election. Approval Ratings Forecast the Winner To continue the theme […]
Read More
Date: November 1, 2020
3 Election Tidbits Which Point to a Winner – Biden Portfolio Outperforming
Three election tidbits. Since 1952, no incumbent has been reelected with recession during election year. • 2020 • 2008 • 1980 • 1960 • 1952 Since 1952, no incumbent has been reelected with a 20% stock market decline during election year. • 2020 • 2008 The last three elections in years ending with “0” saw incumbent losses. • 2000 • 1980 • 1960 Wednesday’s decline continues to follow the market analog if the incumbent loses his reelection bid. COVID may […]
Read More
Date: October 29, 2020
Market Scaring Out the Weak Holders Ahead of Halloween
I have the election 2020 and its market impact webinar tonight so I will keep this brief. I think you can still sign up, but we may be at capacity by now. Stocks digested the recent decline on Tuesday and a number of positives started popping up, including the narrowest intra-day range of any day of the past 7 days. In technical terms that is the ole NR7. Trading activity continued on the quiet side and the stock market is […]
Read More
Date: October 28, 2020
Line in the Sand – Market Following Change of Power in DC
On Friday I wrote about the risk/reward favoring the bulls. That was because stocks had pulled back to an area where they should entice money into stocks. But if that thesis was wrong, the downside was relatively limited versus the potential upside. My line in the sand was a close below last week’s low. You can see this in the chart below depicted by the two blue, horizontal lines. That’s a set up I would take at every juncture. This […]
Read More
Date: October 26, 2020
