Crosscurrents Abound in May but Fraught with Risk
The month of May begins today. It’s supposed to be spring although you wouldn’t know it in New England on Monday as folks had on hats, gloves and down jackets. The weather is finally looking up in CT as the forecast calls for 70s and 80s this week. I think the bulls are hoping their forecast heats up this week as it’s been cold for stocks of late. As you know from my blog posts since April 18 I have […]
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Date: May 1, 2018
Huge Week Ahead. May 1st VERY Bullish
Stocks begin the new week with the bulls on the optimistic side. Yes, the tariff deadline looms, but we also have the Fed on Wednesday, employment report on Friday and earnings scattered throughout the week. Lots going. Lots of ammunition for the bulls, or so they say. I am not as encouraged for the same reasons I discussed last week and the week before. Lower before higher although I am sure I will feel squeezed if stocks break out to […]
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Date: April 30, 2018
Don’t Let the Bulls Fool You; Bears are in Control
Turnaround Tuesday didn’t work out so well for the bulls, but they did muster up some strength to rally on Wednesday and Thursday. Still, we don’t have a single day where 90% of the volume was in stocks going up. That’s sorely lacking to give the bulls some comfort. Lots of folks were crowing on Thursday about the NASDAQ 100’s regaining leadership with Microsoft, Facebook and Amazon blowing out earnings to the upside. However, let’s not forget that the market […]
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Date: April 27, 2018
Turnaround Tuesday, Semis & 3%
Just a quick comment regarding the short-term state of the market. With the current pullback lasting through Monday, there is a possibility for a rally beginning on Tuesday, also known as Turnaround Tuesday. This scenario is usually more important and prominent when stocks are in the throes of a more significant decline and momentum is strong. We do not have that now. I bring up Turnaround Tuesday not so much because I think stocks are at important bottom, but because […]
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Date: April 24, 2018
Bears in Charge as Bond Yields Rise Again
The bears certainly won the day on Friday to end the week. While stocks did close off the lows with the typical late day buying into the bell, stocks fell back into the equilibrium level we have seen of late. The bears have the upper hand to a small degree. While the transports, banks and discretionary are hanging in nicely for now, semis continue to be under severe pressure. They are now at risk of breaking the April, testing their […]
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Date: April 23, 2018
Short-Term Remains Murky But Dow 27,000 on Tap for Summer
Almost like clockwork when I wrote about the bears giving up which caused me to be concerned, stocks declined. However, given the elevated level of volatility a few day pullback isn’t going to raise many eyebrows. With stocks closing off of the lows on Thursday after yet another nonsensical piece of information leaked regarding the Mueller investigation and Trump, the bulls should an opportunity on Friday. If the major indices close at their highs for the week, we will likely […]
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Date: April 20, 2018
Bears Starting to Throw In the Towel
Over the past week or so, I have written about some price levels I wanted to see exceeded to turn the picture a little more bullish. Since then, all five major stock market indices have closed above those levels. After that I wrote about the “key” reversal last Friday that had some analysts calling for the end of the bull market. The market immediately rejected that rejection. Then the bears hung their hopes on the “magical” 50 day moving average. […]
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Date: April 18, 2018
“KEY” Reversal and the 50 Day Moving Average Boogeyman
On Friday, the major stock market indices saw yet another “dramatic” reversal as strong early gains were not only given back but also turned into losses during the afternoon before closing off the lows. People who look at charts usually forecast further weakness ahead with some even using the one day pattern to call for the end of the bull market. I think you have to take these kinds of days in context. One day doesn’t end a bull market […]
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Date: April 16, 2018
Bulls Looking Up. The Absurdity of Exact Price Levels.
Yesterday, I wrote about some “key” price levels to watch. I put quotes around it and chuckle because there is some level of absurdity with getting too cute about a given exact price. That’s one of the many flaws of analysis. S&P 500 2675 is “vital” but not 2674 or 2676? Technicians get way too caught up in exact numbers rather than small ranges which makes a whole lot more sense. And remember, the market will always do its best […]
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Date: April 13, 2018
All Time Highs on Tap. A Few Key Prices to Watch
Let me begin by answering a few emails after my last couple of updates. Yes! I continue to believe that fresh all-time highs are ahead for stocks with the Dow hitting at least 27,000 in spite of the increase in pundits calling for the end of the bull market. Stocks seem to be in the second half of the bottoming process, regardless of whether we see Dow 23,000 or a move above 24,700. The major stock indices continue to thrash […]
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Date: April 12, 2018
Volatility Still Elevated. No All Clear Yet
So Paul, (yes, I am speaking in the annoying third person and I hate it too), it seems like every day there is a dizzying array of news and events. 500 points up, 400 points down, 300 up, 400 down. Employment report. Tariffs. New technology regulations. And earnings season is about to begin. Volatility remains elevated as has been the theme all year. Three times, Dow 23,500 has been visited and all three times buyers stepped in the thwart off […]
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Date: April 8, 2018
Major Reversal Puts Ball in Bulls’ Court
Stocks saw a very large reversal on Wednesday from being down 500 points to closing up more than 200 points. That would have been absolutely textbook if the price lows were below the lowest level of the correction which occurred on Monday or February 9th, depending on which index you look at. Technically, the price behavior has satisfied all that is needed to end the correction and begin an intermediate-term rally. However, I am not 100% convinced just yet. First, […]
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Date: April 5, 2018
Trump Tariff Tantrum & 200 Day Moving Average
We woke up today with more of the Trump Tariff Tantrum. This time, China responded as everyone thought they would, but the markets reacted much worse with the Dow looking to be down 600 points at the open. I am much, much more concerned about where stocks close today rather than where they open. To wrap up this decline, I would either want to see a 1000 point down day or afternoon strength today. As I continue to write, tariffs […]
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Date: April 4, 2018
Stocks are “Supposed” to Bounce
This is going to be a short update as my car has a safety recall and I am late to drop it off. While I was on the look out for a 1000 down day to get the market to the end of the decline and middle of the bottoming process, the bulls jumped when the Dow was down 700+ on Monday and thwarted that attempt. I really wanted to see a full WOOSH lower that ended the day really […]
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Date: April 3, 2018
Bottoming Process Continues with Decreasing Momentum
Last week, I wrote about stocks entering the bottoming process. After a decline of 1100 points in the Dow, there was a possibility that the correction which began on January 26 was ending. The only thing I did not want to see was a large up opening with stocks rallying all day. Well, that’s exactly what happened last Monday. It just prolongs the inevitable. I still believe that there is a good chance of seeing a 1000 point down day, […]
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Date: April 2, 2018
In the Throes of the Bottoming Process
1100 point decline to end the week certainly makes people pay attention. It still feels like yesterday (or late January) when all the talk was about a year long stock market melt up.Tax reform, 700+ regulations killed, GDP accelerating. All paths led higher. Almost every day, Donald Trump celebrated fresh all-time highs and used the stock market as his report card. Oh, the good ole days! As I wrote about last week, I don’t believe it’s about Facebook or Trump’s […]
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Date: March 26, 2018
What Happened to the Stock Market Melt Up?
700+ points of Dow decline on Thursday surely did change sentiment quickly. And while stock market bottoms do occur on Fridays (13% of the time), contrary to popular belief, the final low is unlikely to be today. Earlier this week, I discussed how all three of my offered scenarios were breaking down as they all eventually do, I thought the Dow would go check out 24,200 but likely head all the way down towards 23,000 which is below the lows […]
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Date: March 23, 2018
***SPECIAL Fed Update – Rates Are Going Up Again & Then Some***
Stock Market Behavior Models for the Day As with every Federal Open Market Committee (FOMC) statement day, there is a model for the stock market to follow pre and post announcement. Certain environments have very strong tendencies while others do not. Over the past few meetings, many of the strongest trends muted although the system that said to sell on the close of the meeting hit a home run. The S&P immediately crashed from 2824 to 2645 or 6% during […]
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Date: March 21, 2018
Scenarios Breaking Down
For the past 6 weeks, I have offered what has now amounted to three plausible scenarios for where stocks are headed over the coming three to four months. While the short-term ups and downs varied, all paths from my perspective ended up at new highs for the major stock market indices. Nothing has changed in this regard and I continue to expect Dow 27,000 by the end of Q2 (June 30). As with almost every single market analog, eventually, they […]
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Date: March 20, 2018
Nasty, Ugly Reversal
Stock market action on Tuesday printed a classic nasty and ugly reversal when looking at the charts. Stocks opened at the highs for the day and closed at their lows. Additionally, the move from high to low completely enveloped the previous day’s activity. While this does look really bad on a chart and people will often say it’s a classic key reversal which ends rallies and bull markets, research doesn’t support that claim. Sure, you can see and have seen […]
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Date: March 14, 2018
