Fed Begins Meeting. But Bitcoin!
The Federal Open Market Committee begins its final meeting of 2017 today. With the special election in Alabama and Bitcoin, does anyone really care about the Fed? For today, the stock market certainly doesn’t! With the Fed announcement that short-term interest rates are going up by .25% tomorrow at 2 pm, the market usually has a quiet day today with a slight edge to the bulls. More new closing highs in the Dow and S&P 500 but the same divergence […]
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Date: December 12, 2017
But, But, But Say the Bears
Another month, another strong employment report. 228,000, new jobs were added in November, stronger than expected, as the impact of the hurricanes continues to weaken. The unemployment rate remain at a 17 year low while wages grew at an annualized rate of 2.5%, still frustratingly short of where the Fed and government wants it to be. Thankfully, it’s still slightly ahead of the inflation rate. Every month it seems like the bears get all hyped up into this report with […]
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Date: December 11, 2017
Vicious Rotation and Wicked Reversals Dominate
2017 has been the year without volatility. Who would believe that stocks haven’t declined even 5% on a closing basis, let alone 10%. It’s crazy! And once the calendar gets to November, downside volatility becomes that much more difficult to see as potential catalysts for a decline go down significantly. Yes, of course, there is always that stray geopolitical event, like the infamous “Fiscal Cliff” in 2012 which I dubbed the equivalent of the Y2K hoax. The 2012 chart is […]
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Date: December 5, 2017
Can Flynn End the Bull Market?
One month to go in 2017. Lots and lots of underinvested people chasing returns now. What the heck do they do? Especially when pullbacks have been few and far between. We haven’t seen a 10% decline since February 2016. There have been no pullbacks of 5-10% at all since then. The biggest decline we have seen was in Q3/Q4 2016 and that was 4.63% in the S&P 500. Hardly what people have been waiting for to invest their cash and […]
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Date: December 1, 2017
Decisive Breakout in Stocks but Bitcoin…
First, it seems like all of the talk lately and this week is about Bitcoin and the crypto sector. Do you care? Regardless,, will you take 10 seconds to answer three short questions? TAKE SURVEY With post-Thanksgiving being slightly seasonally weak, Tuesday’s action was a pleasant surprise for the bulls. Yesterday, I mentioned that while there were a number of very short-term crosscurrents, the intermediate-term remained positive. Four of the five major indices saw decisive and significant breakouts to new […]
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Date: November 29, 2017
Bulls Remain In Charge
Stocks came back from the semi-holiday weekend in good spirits, at least for the morning. There was no follow through though as a post-Thanksgiving hangover is usually the theme for the first day or two of the new week. We still have a variety of crosscurrents over the very, very short-term, but looking out one to three months, the picture is positive. As you know, it’s very difficult to see an end of year decline, especially when the year has […]
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Date: November 28, 2017
Another Seasonally Strong Day but Europe Should Not be Ignored
I hope everyone had a great Thanksgiving with lots of good food, family and friends. As I wore the hypocrite hat this year, we celebrated ours on Wednesday night so my daughter and I could fly to Oregon on Thursday to watch the UCONN men and women play in the PK80 basketball tournament in honor of Phil Knight’s (Nike founder) 80th birthday. The men played such a great game to beat Oregon last night, something I definitely did not expect. […]
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Date: November 24, 2017
Long & Strong for the Bulls. Happy Thanksgiving!
The bulls were long and strong on Tuesday with all five major stock market indices hitting all-time highs. You just cannot argue with price momentum. Semis, discretionary and banks were strong while the banks were just okay. We saw very good participation when looking at the NYSE A/D Line. High yield bonds were up but they could not add to their first half hour gains. Commodities, led by oil, just finished a little pullback and seem poised for a run […]
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Date: November 22, 2017
Bulls Stampede Ahead. The Hatred and Disavowing Continues
It looks like the bulls are getting a jump on the very strong seasonal tailwind that exists the day before Thanksgiving. All of the major indices look to open strongly to the upside with all-time highs across the board possible by the time we dig into the turkey. On the sector side, semis continue their relentless rally with consumer discretionary really kicking it into high gear. Banks are climbing nicely and transports look poised for perhaps the most upside in […]
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Date: November 21, 2017
The Disaster That is GE with 3 Alternatives
Last week, I had the pleasure of joining the Nightly Business Report hosted by two CNBC veterans, Sue Herera and Tyler Mathisen. You can find the segment at the 22 minute mark HERE. This is one show I always enjoy as I am the only guest in the segment and they let me articulate my point. On this particular evening, GE’s dividend cut was the big story of the day and that spilled over into dividend paying stocks in general. […]
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Date: November 20, 2017
Bulls Plow Ahead Despite Major Issues in Washington
Stocks opened strong and surged all the way to 2pm on Thursday, as the bulls sprung back to life. Small caps led in a big way and the NASDAQ 100 scored an all-time high. Perhaps most importantly, junk bonds saw a huge day and began to repair the damage inflicted over the past month. On the sector front, semis are back to within one good day from new highs. Consumer discretionary which I left for neutral last month is also […]
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Date: November 17, 2017
Bounce on the Way. Will It Stick?
After nothing more than one really bad day in most of the major indices, stocks look like they want to bounce, at least a little. The key index to watch will be the Russell 2000 which peaked in September and has seen an orderly 3% pullback ever since. For the past week, the small cap index has been trying to put in a low. Additionally, although early, this index will also have a seasonal tailwind next month and into January. […]
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Date: November 16, 2017
Strong Case for Bears But Bulls Could Be Ready Again
And the pullback continues. Everything I have mentioned lately is still in place and uncorrected. We have sentiment that’s a little too bullish. High yield bonds under pressure. Sector leadership weakening. And a very split market with the same percentage of stocks doing well as poorly. Except for price momentum and the positive time of year, the stock market does not look good. Yet with all that, the Dow is less than 1% from all-time highs. Bulls have something to […]
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Date: November 14, 2017
Lots of Concerns Abound
For the past 5 weeks I have often written about the elusive stock market pullback and the reasons why we shouldn’t be surprised to see it occur. We had seasonal headwinds post-September. We had strength into earnings season. We had overly bullish sentiment. Nothing really mattered for more than a day. And just because stocks are seeing some weakness here, I am not beating my chest with “I told ya so”. Being early still equals being wrong. Over the past […]
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Date: November 10, 2017
New Highs Abound But a Few Cracks Developing
Suffice to say that the bulls have basically stampeded any and all attempts to take stocks lower since mid-August. However, for most of that period, the market’s foundation was rock solid and bears were just fighting against strong momentum. Recently, that has changed. Because I have been traveling since late last week and a bit on the sick side, I haven’t spent the time to create the charts to support my point. The Dow, S&P 500, S&P 400 and NASDAQ […]
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Date: November 6, 2017
The Next Fed Chairman & Post Fed Market Decline
Trump to Announce Fed Choice This Afternoon Love him or hate him, Donald Trump certainly is not behaving like his predecessors when it comes to most things, but definitely not the selection of the most powerful banker on earth. During the campaign, Trump harshly and unfairly criticized Janet Yellen for keeping interest rates too low and creating a “fake stock market”. That was until he became president and miraculously embraced low rates and the surging stock market as a referendum […]
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Date: November 2, 2017
***Special Fed Day Alert. No Rate Hike. No Surprises***
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. Eight meetings ago was one of the rare times where the models strongly called for a rally on statement day which was correct as well as a decline a few days later which was also correct. Today, as with most statement […]
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Date: November 1, 2017
Q3 GDP Sees Another Resurgence & Energy Looking Sweet Again
On Friday, the government released a first look at Q3 GDP which I had been looking in the 3% range before the hurricanes hit. It wouldn’t have surprised me if that number was a quarter to half point lower. However, even with the hurricanes, the resilient U.S. economy still grew by 3%. All year, I have written about the economy accelerating to the upside in Q2 and Q3 with the election as the catalyst. Way too many people underestimated the […]
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Date: October 30, 2017
Pullback in Motion. Dow by Itself.
The Dow has now seen three straight days of negative behavior but the index remains a whisker from new highs. The big picture reveals some almost precedent setting behavior in the Dow as more stocks are closing lower than higher as the Dow was hitting all-time highs. That’s not your typical sign of strength. The S&P 500 and S&P 400 are a little weaker with the Russell 2000 and NASDAQ 100 a little more so. The pullback I have been […]
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Date: October 26, 2017
Stocks Continue to Creep But Best Opp for Pullback is Now
It’s really the same old story as we begin the new week and the final full week of October. The intermediate and long-term continue to look strong as they have for days, weeks, months and quarters. Nothing has changed. The short-term is the time frame where it’s neutral at best. I have said all month that the bulls need a little rest, but they haven’t seemed to care. Today, as I look at the five major stock market indices, the […]
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Date: October 23, 2017
