Looking Under the Hood of a Midday Waterfall Decline
This is going to be a little different kind of article that focuses on the minute to minute moves in the stock market. People often ask what happened or why something happened in the middle of the day which seemed rather large and out of the blue. Last week’s 800 point down Tuesday had two very obvious things occur so I am going to share. Below is a chart that I found very interesting. Each little red or green bar represents […]
Read More
Date: December 14, 2018
Unusual Volatility
December and Q4 continue my longstanding theme of increased volatility. It’s definitely unusual for stocks to be this volatile this late in the year and without doing my homework, 2008 and 2000 come to mind. Of course, this looks nothing like 2008, but 2000 does have vaguely similar comparisons. Stocks are certainly pricing in a much more negative outcome than we have seen in a while. As I have said before, I definitely did not see the magnitude of the […]
Read More
Date: December 13, 2018
Higher Rates Are to Blame. Lower Rates Are to Blame
Everywhere I turn, there seems to be another reason for this correction. Slowing in Europe, China falling off a cliff, tariffs, soaring long-term interest rates, yield curve inversion, deceleration in the U.S. economy. I have heard it all. The problem is that none of these reasons can easily be tied to the decline directly, nor should they be. And every once in a while, declines occur and the reasons are not apparent until well after the fact. Let’s look at […]
Read More
Date: December 12, 2018
Lots of Sectors Resist Decline & Many Seasonal Stats Point Higher
The correction in stocks technically continued through last week although I remain firm in my opinion that this is all part of the bottoming process that began in October. With each passing week, more and more bulls turn to bears and I feel like I am almost alone in my forecast that new, all-time highs will be seen in 2019. While higher prices will be accompanied by unusually high volatility, I do not believe that a rising tide is going […]
Read More
Date: December 11, 2018
Ugly & Ugly
On Monday, I wrote about the fireworks I saw coming at the open and not to get sucked into the media’s and pundits’ hysteria. Smart money would be selling not buying.Well, frankly, I wish I did some selling into that bull trap as Tuesday was downright ugly and this morning is looking even uglier to begin the day. I definitely did not see a decline of this magnitude coming. As I always say with outsized opens, where stocks close matters […]
Read More
Date: December 6, 2018
Fireworks at the Open
No one was surprised that positive news came out of Trump’s meeting with Jinping over the weekend. That’s been his m.o. all along. And stocks are set to react in a big way, at least at the open, with the Dow looking up 400-500 points. After last week’s huge surge this just continues the dominance by the bulls as I have been writing about. For the Dow, the next big hurdle to clear is closing above 26,300 which was the […]
Read More
Date: December 3, 2018
Whining & Crying Over Interest Rates
After Wednesday’s huge surge, stocks were quietly digesting on Thursday, somewhat as you would expect. With the initial blastoff from the bottom over which typically lifts all ships, especially those that were hit the hardest, it’s now time to start stalking emerging leadership. I am going to reserve judgement at this point since, frankly, I do not have strong conviction other than the transports are one sector acting very well. I want to see what the defensive groups do over […]
Read More
Date: November 30, 2018
Bulls Drive Ahead But More Stocks Down
The bulls did a nice job on Monday and Tuesday after laying an egg during Thanksgiving week. I don’t think Wednesday will be quite as easy during the afternoon. While the major stock market indices scored gains on Tuesday, there were almost 700 more stocks going down than up. That’s not exactly the pillar of strength which leads to immediate gains. Frankly, it’s a little disappointing. The vast majority of our work turned positive at the end of last week […]
Read More
Date: November 28, 2018
The Makings of the Bottom
Coming back from being out of the office for over a week is never easy although I received a few emails doubting I was actually away since I sent so many updates last week. It’s not that hard when your kids like to sleep in and you don’t. I got a lot done before any of them, including my wife, starting stirring in the morning. Stocks came back from the Thanksgiving feast with the bulls firmly in charge early on. […]
Read More
Date: November 26, 2018
What Happened to the “Easy” Week?!?!
I hope you had a meaningful and terrific Thanksgiving! I cannot believe the amount of food I consumed although without the traditional bottles of wine, I guess there was a lot more room. Having been out of town since last Thursday, I am looking forward to getting home today, seeing my pets and sleeping in my own bed. This week was supposed to see a mild drift higher, especially after Monday. You know, it was one of those “easy” weeks […]
Read More
Date: November 23, 2018
Bears Maul Seasonal Tailwinds
Two weeks ago in Battle Lines Drawn, I showed four horizontal blue lines which I thought would dictate market behavior for a while. There wasn’t anything secret or proprietary about them, just four price areas that seemed to garnering a lot of attention. When the masses focus on certain prices, the market will usually do its best to exceed them and make the most people look like fools. In this case, soon after stocks exceeded the closest blue line, they […]
Read More
Date: November 21, 2018
OUCH!
The bears absolutely mauled the seasonal tailwinds I mentioned yesterday. Remember, seasonal trends are just helpers and usually do not begin or accelerate a trend. Nonetheless, Monday was very ugly for the bulls and Tuesday looks to be equally nasty or worse. This is unusual behavior for Thanksgiving week, but not without precedent. The bulls are now in “hope” mode as liquidity is beginning to dry up and they will need a herculean effort to accomplish some time kind Turnaround […]
Read More
Date: November 20, 2018
Seasonal Tailwind This Week
Stocks begin the holiday-shortened Thanksgiving week with an upside reversal last Thursday and a little bit of follow through on Friday. Stocks continue the process of repairing the internal damage done by the October correction before assaulting Dow 27,000 in the New Year. However, I want to be clear; at this point I do not have strong conviction that last week’s reversal is the final nail in the market’s bottom. I can still see two diverging paths to new highs […]
Read More
Date: November 19, 2018
Bulls Making a Stand
Thursday saw upside reversals in all of the major indices which means that stocks opened lower, traded a little lower and then rocketed higher into the close. That should comfort the bulls, at least into next week as a solid seasonal tailwind blows into the holiday. Is it possible that we just saw the final low on Thursday? Sure. It’s POSSIBLE. I am not pounding the table with high conviction like I would or will if stocks revisit the lows […]
Read More
Date: November 16, 2018
THE Bottom Right Now or Soon. ALL Paths Lead to Dow 27,000
Last week, I wrote about the chart below, Battle Lines Drawn, which had one more horizontal, blue line at the time. That was exceeded on the upside, so I removed it. We are left with the upper blue line that once exceeded and closed above will be late confirmation that the bottom is in and new highs are on the way. That’s going to take some time to develop. Stocks are at the first blue line which creates an opportunity. […]
Read More
Date: November 14, 2018
Bulls on Shaky Ground Today
After a fast and furious rally by the bulls, we saw a little change on Friday as “too far, too fast” became my theme. I thought the best case would be for a pause to refresh or some backing and filling. That appears to be the case as the new week begins. I am very keenly watching for the market’s reaction if and when it gives back all of last Wednesday’s huge, post-election gains. That should speak volumes about the […]
Read More
Date: November 12, 2018
Pause to Refresh
I had such a great time joining the good folks at Yahoo Finance on Market Movers yesterday morning, especially since I stayed put in my office and joined via Skype. I didn’t think it was possible to look worse than I do on TV without makeup, but yes, I got scared watching the replay! After stocks huge sure on Wednesday, I thought that the market would pause to digest or refresh, perhaps back and fill. The Dow had been leading, […]
Read More
Date: November 9, 2018
Not So Special Fed Day Update. Recession & Bear Market
Normally, I send out a very detailed update when the Federal Reserve concludes their every 6 week meeting. Given the volume of updates I have published lately, I am sure most of you have a little Paul Schatz fatigue. So for someone not known for brevity as my colleague,Renee, says all the time, I am going to keep this short and to the point and then work on a very important Canaries in the Coal Mine. The Fed concludes their […]
Read More
Date: November 8, 2018
Election Model Right Again!
Last night, I flew back from one of the best conferences I have ever been to in Chicago for the National Association of Active Investment Managers. Besides offering my outlook on many asset classes and themes for 2019, I sat through some really great presentations as well as networked with some of my closest industry friends and new acquaintances. So many bright and talented people. Some really good deep dish pizza at Gino’s East and tasty craft beer on tap. […]
Read More
Date: November 7, 2018
***Special Election Update***
Greetings from 34,000 feet as I head to Chicago for a quick two day trip to attend the National Association of Active Investment Managers’ conference where I will be speaking about my preliminary forecast for 2019 as well as rubbing elbows with some of the industry’s brightest and most forward thinking minds. It’s an association I have been involved with since 1990 and their two conferences are always a highlight of my year. Election Day is here again. Boy, was […]
Read More
Date: November 6, 2018
