***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
2018 Looking A Lot Like 1997
As you know, I have been hanging my hat on two scenarios for the market since early February. I updated those yesterday. While both scenarios still lead to Dow 27,000 by the end of Q2, I searched long and hard for further evidence to support my thesis. I love finding market analogs, but there haven’t been many to what transpired over the past 6 weeks. 1997 seems like the most favorable comparison and when I lined them up, it looked […]
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Date: March 13, 2018
I’m Back! Dow Still Going to 27,000
I want to start off by thanking everyone for the overwhelming support, compassion and number of condolences on my dad’s passing. It has been a difficult few weeks both pre and post funeral and Shiva, but my family and I were tremendously comforted by so many people coming out of the woodwork with calls, cards, texts, emails, donations to his favorite charities and an amazing amount of stories about my dad, many of which I was hearing for the first […]
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Date: March 12, 2018
FYI
Earlier this week, my dad, Richard “Dick” Schatz, passed away. He had been sick for a while, but just kept beating the odds with some amazing clinical trials at Memorial Sloan Kettering. If you called the office over the years, every once in a while he would answer our phone and engage in conversation with literally anyone who could fog a mirror. Below is the most recent picture of my parents at a milestone birthday party for one of his […]
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Date: March 1, 2018
Breakout Alert for Stocks. Yields NOT Peaking
After Friday’s dominance by the bulls and the very early Monday morning follow through, the bulls are on the verge of negating what has been my preferred scenario and instead opting for scenario number two below. Since a called the bottom a few weeks ago, I drew the two horizontal blue lines on the chart below and have not changed them at all. Those represent a trading range where I thought stocks would bounce in as volatility began to subside […]
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Date: February 26, 2018
Stock Market Approaching Critical Juncture. Eyes Open!
It’s Friday of a holiday-shortened week and even more so for me as I spent Tuesday and Wednesday in New Orleans with some fellow UCONN crazies eating, enjoying a few adult beverages, playing golf and watching the women dismantle Tulane, my wife’s alma mater. It was a good break from winter in New England, but Mother Nature seems to have lost her ferocity up here and it’s been more like March and April. Speaking of my wife, Teri, I […]
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Date: February 23, 2018
Is the Rally Over???
Here is a very quick and timely update to start the week. Time to be on our toes. I will have more tomorrow or Thursday, but there may be a change afoot. Stocks did not end the day well on Friday. No big deal. They were up slightly but gave up big gains. That’s normally not unusual except that it was into a holiday weekend. That’s atypical. While the rally off of the lows has been significant it has lacked […]
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Date: February 20, 2018
Two Scenarios Updated. Put Up or Shut Up
I had hoped to have a full canaries in the coal mine done today, but I failed (or lied as some could say) as I am only half done. It’s okay, though. Stocks are behaving exactly according to the footprints I first offered 10 days ago, making life a little easier, for now. And regardless, I am still forecasting Dow 27,000 next quarter with the chance of 30,000 later this year. Below you can see the original chart with the […]
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Date: February 20, 2018
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
