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
Weak Close to 2017 Indicates Bounce to Begin 2018
Back to work. Lots going on. Many crosscurrents. I hope you had a safe and enjoyable New Year’s celebration. I am still thawing out from so many days in Vermont without seeing the thermometer get above 0. The stock market begins the new week, month, quarter and year with a rather disappointing close to 2017. It has been something on my radar screen for a few weeks as recent history has not been kind to the bulls over the last […]
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Date: January 2, 2018
Where is Santa Claus?!?!
Last week, I wrote about the much heralded Santa Claus Rally and last five trading days of the year. If you weren’t able to read the piece, I think it’s a good unbiased analysis debunking the notion that this time of year is like shooting fish in a barrel. With 2012, 2014, 2015 and 2016 all limping in to close the year, the trend has really been quite the opposite. So far in 2017, Santa has barely been seen with […]
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Date: December 28, 2017
Debunking Santa & the Last 5 Days of the Year’s Bullishness
Here it is; the last five days of trading for 2017. So far, it’s been the least volatile year in history. And barring any truly unspeakable geopolitical event, it will end that way as well. The stock market hasn’t seen even a 5% decline, let alone any full fledged correction. Those most rewarded were the ones who did absolutely nothing all year, similar to 1995. I don’t think 2018 will be a repeat, but that’s a story for a different […]
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Date: December 22, 2017
Stocks on Fire! Not So Much High Yield Bonds
Monday picked up where Friday left off. Strong action in the major indices with the small caps following through from Friday’s burst higher. Even the European indices broke out to new highs. Emerging markets have not and are definitely looking tired. All four key sectors look good with the semis really trying to regain the top spot. High yield bonds, one of my favorite canaries in the coal mine, are the primary fly in the ointment as they cannot seem […]
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Date: December 19, 2017
Small Caps Burst. Semis & Banks Readying. REITs…
Friday saw much of the same stock market behavior as we have seen lately. The Dow, S&P 500 and NASDAQ 100 continue to act the best although after closing at a 10 day low with the aforementioned indices at new highs, the Russell 2000 finally got off the mat. The small cap index burst higher and it is now at least in a position to lead into January which would be fitting in well with historical norms. Over these final […]
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Date: December 18, 2017
Post Fed Trend Says Down But Seasonals Suggest Otherwise
As was expected by just about everyone, the Fed raised interest rates by .25% on Wednesday in their final meeting of 2017. This was far from their final rate hike of the cycle which is not good for the economy over the long-term. The stock market gave up much of the gains post FOMC and there were a few little cracks seen. The Dow remains the strongest index, not a good sign, while the Russell 2000 looks like it’s trying […]
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Date: December 14, 2017
Fed’s Arrogance Leading to Disaster for Economy. All the Wrong Moves
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 moderate post FOMC trend last meeting which called for mild weakness.The S&P 500 gained fractionally over that period. Today, as […]
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Date: December 13, 2017
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
