Weak Week Clouds Short-Term Picture
Welcome to the single weakest week of the year, at least that’s what history suggests over the past 30 years or so. The five days after September options expiration have not been kind to the stock market overall. I should have done a little more digging to see how stocks behaved when they were already in uptrends heading into this week. Usually, September is much weaker when it begins with weakness, as I wrote about in The Myth of September’s […]
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Date: September 23, 2019
THE Weakest Seasonality of the Year is Here
Stocks are looking a little tired. That’s my take today. The bulls have tried twice to score new highs, but the bears have put up a little resistance over the past two weeks. While I do not believe the market is on the verge of a bear market or even a 10% decline, risk/reward is no longer tilted strongly towards the bulls. And that’s okay. FYI, next week is the weakest week of the year on an historical basis for […]
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Date: September 20, 2019
Here Comes Another Cut, But Will the Markets Celebrate?!?!
What to Expect Today The Federal Open Market Committee (FOMC) is going to cut interest rates by another 1/4% at 2:00pm on Wednesday. The market is expecting it and the cut has already been priced in. Any other action would be a shocker. With stocks so close to all-time highs, this is again reminiscent of 1995 when the Fed came from an overly restrictive monetary policy in 1994 to realizing they screwed up and quickly played catch up. Stocks had […]
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Date: September 18, 2019
Stocks Were Looking for an Excuse to Pull Back
While stocks had another nice run last week, they didn’t exactly close Friday with much strength. That’s not surprising given how most of the major stock market indices were pushing up against all-time highs. So many times, we will a see security come back up and say hello to a previous important peak, only to watch it pause or mildly pullback first. The weekend news about Iran or Yemen conducting drone attacks on Saudi refining facilities was just what the […]
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Date: September 16, 2019
Bears Continue to Laugh & Scoff and Be Embarrassingly Wrong
When listening to the pundits and reading my Twitter feed over the past month or so, it has been fairly negative which it has basically been for the majority of the bull market with few key exceptions like January 2018. Whenever I prepare for a media segment, I usually start by saying that no one has been more bullish than I have on balance for the entire bull market. Most of my quantitative, upside price targets for the Dow were […]
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Date: September 13, 2019
Bears Getting Impaled
The bulls have been relentless of late, which should certainly not surprise anyone who reads this blog. I have been emphatically bullish, especially on semis and defensives, and looking for Dow 28,000. I can’t find many or really any others who have been as uniquely bullish as I have been. I don’t count anyone who believes that you should always be positive on the stock market because it will reward you over the very long-term. That’s a cop out. But […]
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Date: September 12, 2019
Remembering 9-11
I wasn’t around when Pearl Harbor was bombed but I know everyone from that generation remembers exactly where they were when it happened. My generation has the same memories of 9-11. I vividly remember watching TV in my office having just returned from Florida the night before where we debated staying one more day to get an early round of golf in on September 11th and then fly home after lunch. I was the party pooper in the group as […]
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Date: September 11, 2019
The Myth of September’s Gloom
As the calendar turned to September, the media was in their usual tizzy because historically, the month has the worst performance of any during the year. The problem with making very general statements is that context is ignored. It wasn’t long ago when all the headlines were about how strong the month of December was and everyone was all bulled up because stocks had corrected 10% in October and November. Then stocks collapsed in December like hadn’t been seen since […]
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Date: September 9, 2019
Bulls Look to Maul Bears as Semis Remain Strong
At the end of last week I wrote about the bulls’ inability to sustain a breakout above the recent range as prices briefly popped above the highs but reversed to close lower. Given my continued bullish outlook, I wasn’t worried and I am still not concerned. This morning, pre-market indications look for the bulls to attempt a full-fledged assault higher and break through the month long trading range as you can see below using the S&P 500 futures. For more […]
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Date: September 5, 2019
Bulls Poke Above Range Without Follow Through
The final day of the week and the month and I think all those investors supposedly in The Hamptons can get back to lounging on the beach or partaking in the nightlife. Not I. It’s been a month full of physical therapy, acupuncture and lots of walking and throwing with the kids when I wasn’t in the office. And to the disappointment of many, the bull market didn’t end in August and the economy didn’t recess. The trading range continued […]
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Date: August 30, 2019
Where’s the Worry About Inverted Yield Curve and 10 Year Plunge?
While the past few days did nothing to clear up the four-week trading range, I still give the nod to the bulls as I have been saying for weeks. That’s regardless of whether stocks first poke through the bottom of the range or not. I do find it funny that yields on the 10 year bond hit fresh lows on Wednesday and stocks did not collapse as some media analysts have been selling as a tried and truism lately. One […]
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Date: August 29, 2019
I Didn’t See That Coming!
Last Friday, I wrote about not expecting much or really anything new from Jay Powell when he spoke at the Fed’s annual retreat in Jackson Hole. While I was spot on about that, I absolutely did not see the tweetstorm from the President, basically threatening economic martial law, let alone questioning if his appointed Fed Chair was an “enemy”. A bit of a head scratcher. All of that led to the markets becoming unglued the rest of the day, except […]
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Date: August 26, 2019
Powell’s Much Ado About Nothing While High Beta Percolates
Markets were on pause mode on Thursday as everyone awaited Fed Chair Jay Powell’s speech from Jackson Hole on Friday morning. Most of the stories I have read and media interviews I have seen had a very binary outcome from Powell’s speech. It was “all or none”. I don’t agree. I think he is going to straddle the line as much as possible and say very little in the way of new or market moving information.The key will be not […]
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Date: August 23, 2019
Bulls Look to Trap Bears – Semis the Key
The bulls had the chance. They could have really squeezed the bears. But they weren’t totally ready just yet. Tuesday’s afternoon selloff looked on the ugly side, but in reality it just kept the stock market in the same range it has been in all month. I want to see a daily close in the Dow above 26,500, S&P 500 above 2945 and NASDAQ 100 above 7800 to confirm the bull are readying a run to the old highs. These […]
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Date: August 21, 2019
Bulls Cede Control from Bears
Friday was a very good day for the bulls on the heels of a little reversal on Thursday that pierced the recent lows on the Dow, S&P 400 and Russell 2000. While I would have preferred the S&P 500 and NASDAQ 100 to have joined that party to run the weak money out of the market, it’s not the end of the world. You can see what I am talking about below in the lower right side of the chart […]
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Date: August 19, 2019
Bear Clowns Wrong, AGAIN – Dow 28,000 on the Way
The news backdrop certainly isn’t good. Trump adds tariffs. China threatens retaliation. Hong Kong protests. China readying to “invade”. Germany and Italy in recession. Yield curve inverts in U.S. Recession fears explode higher. All of this sounds so bad. Like there is no hope, just darkness. Yet stocks are merely 6.5% from an all-time high. 6.5%! I will go one step further. News like I mentioned more often occurs as the stock market gropes for a bottom than puts in […]
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Date: August 16, 2019
I HATE Tariffs
I hate tariffs! I hate tariffs! I hate tariffs! PHEW! Now that I got that out of the way, I can get down to business. I really hate the idea of tariffs. The free market should be the ultimate arbiter, absolutely not the global governments trying to protect certain industries. And as I have said over and over and over, no one, not a one, wins a trade war. There are only losers. You can only put so much lipstick […]
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Date: August 15, 2019
Nope. Not a Bear Market
As I continue to write about, while much or most of the price damage should be over, day to day volatility is not. Worries have shifted from tariffs and a trade war to civil unrest in Hong Kong which is also associated with China. Remember, regardless of the situation, there is always, always, always “major” news surrounding a market’s attempt to bottom. That’s just how it is. It seems like every single time stocks pullback at least 5%, I get […]
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Date: August 12, 2019
Stocks Thrashing Around for a Bottom But Other Markets Hold Clues
Volatility happens in both directions. That has been the theme all week. Anyone who has bought strength or sold weakness has been left holding the bag. And I don’t think volatility is over, but much or most of the price damage should be. Worst case, as I have written, Dow 25,000 or so could be seen. The reward is a move to 28,000. With stocks thrashing around trying to find a low, I often look at other markets for signs […]
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Date: August 9, 2019
Hold on to Your Hats
As you know, volatility rarely builds slowly. It typically happens all at once. I went to bed last night and saw overnight trading indicating a lower open by 100 Dow points. When I woke up, that had shifted to up 100 Dow points. I showered, got dressed and ate breakfast. The Dow was then indicated to open lower by 300 points as global bond yields collapsed. Why do we care about this? Lower bond yields are mostly indicative of weakness […]
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Date: August 7, 2019
