A Price Pattern NEVER Seen at a Bull Market Peak
As I am working on a full canaries in the coal mine to offer substantiation that the bull market is not over, below you can see the recent all-time high in stocks. On January 26, stocks closed not only at an all-time high, but at their highest level of the day, the top of the green candle. In other words, stocks closed at they highest intra-day levels ever as well. In the history of the stock market, stocks have never, […]
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Date: February 13, 2018
A Friday Bottom Is In!
People seemed to like starting with the conclusion, so let’s do it again. Stocks put in a short-term bottom on Friday Yes, that happens on Fridays S&P 500 successfully revisited Monday’s overnight low Volatility declined even as stocks were lower Just as I was hitting send last Friday, the stock market began to rescue itself from the depths of despair for the second time in one week. That was right about the time so many pundits and reporters were boldly […]
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Date: February 12, 2018
What If I am Wrong?!?!
A very long market week is coming to an end. Stocks could not hold on to the rally on Wednesday morning which led to spillover selling on Thursday that accelerated sharply into the close. After a decent morning for the bulls, sellers came in again into lunch on Friday and it looks like the market will need another reversal set up to stem the tide. That could include another ugly morning on Monday or Tuesday, but doesn’t necessarily have to. […]
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Date: February 9, 2018
Stocks Following Map So Far. Range Established for Feb. Dow 27,000
My last two updates focused on the stock market’s mini crash and the reliable historical pattern that typically ensues, including what I saw as the somewhat predicable Turnaround Tuesday where stocks reverse early losses after selling off sharply on Friday and Monday. I was looking for that “woosh” lower early Tuesday and while down 600 wasn’t the magnitude I wanted to see, it was enough to flush out the remaining sellers and entice some buyers in. The worst may be […]
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Date: February 8, 2018
1987 Again? Post Crash Playbook. Turnaround Tuesday
I am going to do something different today and start with my conclusion and work somewhat backwards. The bull market remains intact and fresh all-time highs should be seen next quarter. Buying into sharp downdrafts, while emotionally very difficult, should be rewarded over the intermediate-term. Like a snowball rolling downhill, whatever this decline is going to end up being labeled, the market is right in the middle of the highest speed and maximum acceleration. As with the snowball, it is […]
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Date: February 6, 2018
Post Mini Crash Stock Market Playbook. All-Time Highs Around the Corner
The Dow Jones Industrial Average “crashed” 666 points on Friday, at least that’s how the media portrayed it. And it’s on track to open another 1%+ lower this morning. In 1987, 666 points would have been more than 25%. In 2018, that’s all of 2.5%. 2.5% moves used to mostly occur monthly and certainly quarterly. During extreme periods of volatility, like 2001, 2002, 2008, 2009 and 2011, a 2.5% move would barely get noticed. Today, it’s BREAKING NEWS. Why??? Recent […]
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Date: February 5, 2018
And Stocks Go Down AGAIN
More than a week ago, I started discussing the idea that a trading range was setting in with modestly lower and higher prices as the range. For a few session, stocks blew right past that idea. Before today, the stock market had very, very quietly pulled back for four sessions without much fanfare except for some weak internal readings. That all changed as a solid employment report with finally some real wage growth further spooked the bond market, sending yields […]
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Date: February 2, 2018
Fed Statement Day Disappoints. Defensive Groups Lead.
Fed statement day was certainly atypical and a volatile affair. Early strength was sold into which accelerated after the 2pm announcement. And Just when it looked like the bears would turn the day into a rout, the 3pm bell rung and the bulls came roaring back to life. What was most interesting was that while the Fed didn’t say much in their statement and actually was slightly more positive on the economy, it was the defensive groups, like REITs and […]
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Date: February 1, 2018
Fed’s Arrogance Will Lead to Disaster for Economy
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 immediately before and after were muted except for a modest post FOMC trend last meeting which called for mild weakness the very next day. The S&P 500 lost 10 […]
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Date: January 31, 2018
Stocks Can Go Down?!?!
On Monday we learned that stocks can actually decline in 2018. On Tuesday, we are about to find out that stocks can go down on back to back days and accelerate lower. People seem to have forgotten that! With a trading range/pullback setting in, I am looking at Dow 25,800 as a logical downside target, but of course, we could go a bit lower. Semis, banks and discretionary are acting well and transports aren’t horrendous. There is news just out […]
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Date: January 30, 2018
Don’t Confuse Brains with a Bull Market
On Wednesday at 9:20 am I will be with Laura Hutchinson on WTNH (ABC in CT) unveiling my top financial resolutions for 2018 with a special focus on those directly impacted by the tax reform bill passed last month. It has been one heck of a start to 2018 in the stock market with some of the strongest momentum in history. As I have mentioned a number of times, animal spirits were released into the economy and markets a year […]
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Date: January 23, 2018
Permanently Higher Stock Prices
Last week I offered the idea that stocks may be settling into a little trading range before resuming the rally. Well that lasted all of one day as the bulls continue to press higher to begin the new week. Time and time again this market has punished any and all who dare to hold cash or, heaven forbid, short the market or hedge. As continue writing my year-end report to clients and I review commentary, I realized that for 20 […]
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Date: January 23, 2018
Trading Range Quietly Sets In
Two days ago, I wrote about a vicious, nasty and wicked reversal across the stock market. While the pundits and naysayers concluded various bearish scenarios, history and facts didn’t back that up to any strong degree unless you wanted to cherry pick. More times than not, after a one day, ugly reversal, a short-term trading range sets in, which I see occurring right now. Interestingly, the biggest reversals this week were seen in the S&P 400 and Russell 2000 and […]
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Date: January 19, 2018
Nasty, Wicked, Ugly Reversal
No sooner did the ink dry on yesterday’s blog than the markets saw a very ugly and wicked reversal which saw the Dow give up almost 400 points from high to low. The “feel” I wrote about turned out to be prescient pretty quickly as volatility spiked in a huge way on a relative basis. Check out the chart of the VIX below over the last two days. When you look at any of the major indices, sector or stocks, […]
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Date: January 17, 2018
Volatility Index Acting Weird as Stocks Just Continue Higher
A new week begins and to no one’s surprise, stocks are set to open sharply higher. Even during the Dotcom bubble, stocks took a breather every now and then. In fact, they became very volatile during their melt up phase. That’s an element that has been lacking during this leg of the bull market.It’s not a great chart, but take a look at the volatility index below, also known as the VIX. Essentially, since the year began, this index has […]
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Date: January 16, 2018
Small Caps Breaking Out. Certain Sectors like Dotcom/Bitcoin
After finally seeing a down day, the bulls came right back to work on Thursday with a blistering effort and very strong internals. That trend looks likely to continue into the holiday weekend. The real star of the day was the Russell 2000 index of small cap companies which had generally been consolidating nicely before bursting higher. You can see the blue line below which shows a ceiling where price has stopped three times before, also known as a flat […]
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Date: January 12, 2018
One Down Day. New Bear Market?
In what continues to be an epic start to the New Year, the stock market finally did see a down day, albeit very small. The major indices closed fractionally lower without any damage being done. Yes, some have mentioned that the rally is “narrowing”, meaning less participation, however the NYSE A/D Line just hit an all-time this week. That’s a hard case to make that trouble is looming. Other have noticed that some of the weekly employment data is just […]
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Date: January 11, 2018
Melt Up Continues as Goldilocks Rules the Employment Report
Four days in the New Year, four straight for the bulls. All major stock market indices remain at all-time highs. Nothing has been able to stop the stock market from surging higher. In fact, the move has been so powerful and widespread that after almost 9 years and 19,000 Dow points, the masses are FINALLY embracing the bull market. This can be seen in AAII sentiment figures, consumer confidence, Bitcoin and general public banter about how stocks have only one […]
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Date: January 7, 2018
Junk Bonds Stepping Up. Everything Seems PERFECT!
Snowmageddon ’18 is here! Let’s make it two straight days in the New Year and two straight all-time highs in the major stock market indices with Dow 25K up next which was my next target after 23,000. After five straight closes above 25K, 30K will likely be the next target. So far, stocks have done nothing wrong and I do not believe the rally is ending here. However, I do think that the market is going to form a short-term […]
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Date: January 4, 2018
Santa Arrives Late. Bulls Back in Control
Between my concerns about the last five days of the year and then the bullishness of the first day of the New Year, the market has been cooperating. Monday’s burst to new highs in essentially all of the major stock market indices puts the bulls firmly back in charge with the likelihood for some upside follow through on Wednesday. None of the major indices are doing anything wrong at the moment and they are all in sync to the upside. […]
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Date: January 3, 2018
