Trump Lays Down As Expected
The G20 meeting in Japan is now behind us. Trump met with Xi and that’s no longer an uncertainty for the markets although you would have to be a fool to believe that something positive wasn’t going to come out of that meeting. That has been the president’s m.o. since he took office. He creates a spike in negativity and tough guy persona wit heels fully dug in to appease his base. Then he emerges as some victor or great […]
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Date: June 30, 2019
HUGE Crosscurrents on Friday
Interesting day on Friday. We have end of week, month, quarter and first half of 2019. The skeptic in me says some portfolio managers could play some games to mark up their positions. I know. I know. You are SHOCKED to hear this. I mean, money wouldn’t cause people to do unscrupulous things, right? Next, we have the last day for positioning ahead of the G20 meeting in Japan where Presidents Trump and Xi will meet tonight to discuss the […]
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Date: June 28, 2019
Bears Finally Get a Tiny Win But Tweet Watch Remains in Play for the Weekend
Tuesday was the first real down day since May. By “real”, I am referring to a day where stocks open near the highs for the day and close near the lows. Given that it’s the last week of June, that speak volumes for how strong the bulls have been. Unless stocks are going to fall hard right here, which I doubt, the bulls should make at least a little stand on Wednesday morning. As I have been writing about for […]
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Date: June 26, 2019
Mixed Messages – Playing a Little Defense
Earlier last week I wrote about a very binary outcome for stocks. You can reread it here. I thought a bigger move was coming, but the direction wasn’t totally clear. While stocks broke out to the upside across the board, the move was a bit more muted than I anticipated. With so many short-term indicators locked and loaded for higher prices at the time, I will say that the bulls should be a little disappointed. Of course, they could play […]
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Date: June 24, 2019
Post Fed – A Rate Cut – SERIOUSLY?!?!
Jay Powell & Company gave the markets exactly what they wanted on Wednesday. They threaded the needle which is no easy feat. As someone who has been very critical of the Fed, I have to give them props for not upsetting the apple cart. The problem now is that markets are pricing in a 100% chance of a interest rate cut in July which doesn’t sit well with me. If stocks continue rallying, how can the Fed really give it […]
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Date: June 21, 2019
Insurance Rate Cut, Oasis in a Recessionary Desert, Dow 30,000
Here we go. We went a whole two FOMC meetings without the media labeling them something like, “the most important Fed meeting ever”. That was a whole 12 week respite. But fear not, there is widespread labeling today that there has never been a more important FOMC meeting than the one ending today at 2:00 pm. Before I begin to unpack today and what lies ahead, I want to extend a thank you for the support I have received since […]
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Date: June 19, 2019
Big Move Coming. Binary Outcome.
The stock market begins the week in digestion mode as the Fed meeting looms on Tuesday and Wednesday. Stocks rallied in vertical fashion from June 3 to June 11 and have now paused. The next move should be a good one, whichever direction prices break. The longer the consolidation lasts, the more I would be on the lookout for a fake out, meaning that the first move out of the range sucks people in and then immediately reverses for the […]
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Date: June 17, 2019
Change in Character. Opportunity for the Bears
Earlier in the week, I offered that very short-term, nimble traders could sell the rally as stocks were beginning to look a little tired. I stick by that and still believe that’s a good strategy. Since then, several of our models have started to turn negative which changed my tone to be more defensive and less “risk on”. I think that will likely be the case into Q3 although that’s purely a guess. Of course, I could be wrong and […]
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Date: June 12, 2019
Sell the Rally? Mexico, Mega Mergers and Meat
The markets start the new week with an absolute cornucopia of news. We have mega mergers, Mexico, meat and employment. Obviously, the most important news comes as no surprise to anyone; the deal with Mexico to avoid the first in a series of tariffs on Mexican goods in response to the border and immigration. Stocks rallied sharply last week with an expected deal with Mexico as a significant contributor. The weaker than expected employment report on Friday was greeted with […]
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Date: June 10, 2019
Stocks Bottom on Schedule Catching Most By Surprise
For the last two weeks, I have written about the bottom I saw coming and how I would favor stocks over bonds. I didn’t write about a 10%+ correction nor a bear market beginning. I was very clear that I thought the stock market was experiencing a routine, normal and healthy bull market pullback that began on May 1 after the last Fed meeting. On May 13 as many of our short-term indicators signaled that the vast majority of the […]
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Date: June 7, 2019
Volatility to Continue But Bull Market Remains Alive
Last Thursday night, I wrote a quick piece about the latest tariff tantrum from the President. Early indications were that the stock market was looking at a very ugly opening on Friday. Bears were hoping for an all-out rout, but I wasn’t sensing that. In the end, most of the major indices closed slightly lower than they opened, meaning that not much transpired during market hours. As we start the new week, I would expect the bears to make some […]
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Date: June 3, 2019
Here We Go Again. A Fresh Tantrum
As you know I have been waiting for a better set up for the stock market to find a low. Specifically, as I mentioned the other day, I wanted to see more downside early in the day which led to a close that wasn’t in the bottom of the range. That would serve as a revisiting of the May 13 low. We saw that did happen on Wednesday and it should have at least stemmed the tide. However, as has […]
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Date: May 30, 2019
Back in the Saddle. Bottom Getting Closer
Let me start by apologizing for going dark last week. I had a little accident with a tree and the tree won. I ended up in the hospital and just focused my work efforts on running our strategies and not doing any writing. And after not publishing last week, not much has changed from where I left off in the markets. I was in the short-term pullback camp after the May 1 peak, but it looked like much of the […]
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Date: May 28, 2019
Tweet Watch Again
Although our models were flashing numerous green lights at the close on Monday, I wasn’t convinced that the final low was in. And nothing this week has made me feel any more comfortable. I am definitely not concerned about meaningful decline in the stock market, just that the 5% pullback doesn’t seem complete. Of course, you could push back and say that I am being too cute with such a relatively small decline and you would be right. What bothers […]
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Date: May 17, 2019
THE Bottom or A Bottom? Banks Looking Good
After Monday’s mauling by the bears the losses mounted to roughly 5% and was pretty much in straight line fashion since the May 1 FOMC meeting. In other words, for all the fire and brimstone by the bears, all we have see, so far, has been a normal, routine and what I will call “healthy” single digit, bull market pullback. Very little internal damage has been done. The Dow Industrials said hello to its long-term trend, the average price of […]
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Date: May 15, 2019
Tariff Tantrum Continues
The markets’ tariff tiff/tantrum is now a full blown tantrum. “I don’t want tariffs! I don’t want tariffs! I don’t want tariffs!” The truth is, as I wrote about before, the markets were setting up to pause, digest or even pullback modestly after the Fed meeting on May 1. They were just looking for that excuse which came in a big way over the past week or so. After another big down opening, stocks are continuing to slide lower, the […]
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Date: May 13, 2019
Pullback Continues? All Eyes on Twitter. REALLY???
Lots of intra-day movement this week after stocks peaked on May 1 when the Fed concluded their two-day meeting. After 30 years in the business, I keep saying that few things surprise me anymore, but I have to say that watching traders and market participants glued to Twitter for any sign of tariff walk back by the president is certainly a first for me. I can’t imagine what the great investors of yesteryear are thinking as they down on us […]
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Date: May 9, 2019
Renewed Tariff Tiff/Tantrum from Tweet
We woke up today to one of those infamous tweets from the President. Surprisingly, without notice, he began targeting China and a renewal of the tariff tiff or tariff tantrum. As you know, I am so firmly against tariffs as an economic weapon because no one ever wins. It’s just about losing less. In a perfect world, there shouldn’t be any tariffs at all and each country’s goods and services should stand on their own merit. As I have said […]
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Date: May 6, 2019
Powell Pours Cold Water
The Federal Open Market Committee (FOMC) concluded their two-day meeting on Wednesday with no change in interest rates, as expected. While markets initially reacted positively as the prospect for a rate cut later this year remained very real, Fed Chair Jay Powell, quickly and curiously doused cold water on those hopes, citing “transitory” low inflation. I call it “curious” because after countless years of historically low rates and multiple rounds of quantitative easing that created roughly $4 trillion of new […]
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Date: May 2, 2019
GDP Blows Out. Stocks Don’t React.
It seems like after a few frustrating weeks with the server migration, the blog is back online with all content restored. If you see anything that is broken or clearly missing, please let me know. Thanks for your patience! On Friday, the government released the first look at Q1 GDP and it blew away expectations, surging more than 3% when some “experts” were forecasting 0% growth and many were below 2%. Given the magnitude of the Q4 stock market decline […]
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Date: April 29, 2019
