Q2 GDP Frustrates Bears. Bezos Still Rich?
The government released its first look at Q2 economic output and the economy grew by 2.6% at first glance. While I would have been happier with more, it’s the second straight quarter that seems to be falling in line with my forecast. Earlier this year, I offered that Q1 GDP would come weak and below expectations with Q2 much stronger. That’s certainly the case today. I am also looking at Q3 to be stronger than Q2 with a shot at […]
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Date: July 28, 2017
Boring Fed Day On Tap
Model 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. Six 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 days, […]
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Date: July 26, 2017
1996 Flashback
July 23rd marked the 21st anniversary of what I dubbed, the “Garzarelli Bottom”, which turned out to be one of the better stock market calls I made, especially earlier in my career. At that time, stocks hadn’t seen any real downside since 1994 and that year with littered with rolling 5-9% pullbacks. After the bears tried three times to take stocks lower in March, April and May, the bulls powered to yet another new high. After peaking in early June, […]
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Date: July 25, 2017
Trading Range Continues But Lots Beneath the Surface
Stocks fared fairly well last week in the face of overbought conditions and a few tiny cracks in the pavement. As I continue to offer, I believe the bull market is alive and reasonably healthy, especially for one 9 years old. However, my shorter-term view is that stocks are in a trading range with perhaps a slightly upward bias for the time being. The stock market just doesn’t seem like it wants to launch a fresh leg towards my next […]
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Date: July 24, 2017
Stocks Tired. Energy and Transports of Interest
It’s been nothing short of amazing how many people keep calling for a bear market, correction or even single digit pullback. On top of that, we are now hearing calls that the VIX (volatility indicator) is either broken or no longer works. Lots of sour grapes out there! The bottom line is that the ingredients for a major decline are not present and have not been present for a long while. That’s going to change, but it will take some […]
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Date: July 21, 2017
Bears Move to VIX as Indices All See New Highs
The bears tried to put up a little fight on Tuesday, but that only lasted a few hours and it wasn’t much of a battle. On Wednesday, the bulls came right back with the big guns and a headline close that saw all of the major stock market indices see fresh all-time highs along with high yield bonds. While I had been looking for the Dow, S&P 500, S&P 400 and Russell 2000 to see these levels, I did not […]
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Date: July 20, 2017
Bulls Don’t Want to Quit, But…
The bulls had another strong day on Friday with now the S&P 400 and Russell 2000 on the verge of fresh all-time highs. Semis continue to bounce back. Transports remain strong and discretionary and banks are behaving constructively. Materials and industrials are quietly in high gear and long depressed energy is ticking higher. High yield is also picking up again and you know my feelings on that along with the broad participation seen on the NYSE. Just keep in mind […]
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Date: July 17, 2017
Another Good Day for the Bulls
After a number of short-term victories for the bulls over the past week, the Dow Industrials and Dow Transports scored new all-time highs together, triggering a Dow Theory confirmation or buy signal on Wednesday. While the Dow Industrials were the lone major stock market index to see fresh highs so far, I expect the S&P 500 to follow suit shortly. The S&P 400 and Russell 2000 should not be far behind which would add even more credence to my forecast […]
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Date: July 14, 2017
Dow Theory Says to BUY
After staving off early morning selling on Tuesday, the bulls followed through with a nice little day on Wednesday. As I have discussed, the NASDAQ 100 continues to bounce back and resume leadership. That’s an intermediate-term positive, especially if the index does not lead on the downside during the next pullback. While the Dow was the only major index to score an all-time high on Wednesday, the Dow Theory crowd will point to the transports also hitting an all-time high. […]
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Date: July 13, 2017
NASDAQ 100 Right on Schedule. Gold and Energy Opportunity
For the past month or so, I have focused much of my commentary on the NASDAQ 100 as it had been the far and away market leader before getting hit with the ugly stick from late May to early July. Late last week, things began to change and I saw the NASDAQ 100 looking a little better in the short-term. On Friday, the bulls, especially in tech and the NASDAQ 100 did step up with the anticipated bounce beginning. That’s […]
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Date: July 10, 2017
Slow Change in the Tide
As you know, the NASDAQ 100 and tech have been downright ugly overt the past 6 weeks. From leader and media darling, this huge sector, including the much vaunted FAANG stocks have been hit very hard although there hasn’t been significant technical damage done. I posted a few charts over the weeks showing a very defined trading range where a close outside the range would give the bulls or the bears the clear edge. Otherwise, a neutral stance was the […]
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Date: July 7, 2017
Market Remains Uneven But No Big Decline Coming
I hope everyone had a festive July 4th holiday with family, friends, food and libations! Thanks to all those who have served to fight for and protect our freedom as the greatest nation on earth. We pick up mid-week no different than on the holiday shortened Monday or last week. It’s a tale of two markets, the NASDAQ 100 and the rest of the major indices. On Monday, where I felt like one of the few who worked, the Dow […]
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Date: July 5, 2017
NASDAQ 100 Still Ugly
Those looking for volatility certainly got their wish this week as moves were seen Monday, Tuesday, Wednesday and Thursday. With Friday being the start of an unofficial four day weekend, I doubt there will be much action without a major news event. In Wednesday’s piece, I offered that stocks could bounce into the 4th holiday and then see some more downside, especially in the NASDAQ 100. Well, Thursday didn’t work out so well for that forecast! At the open, all […]
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Date: June 30, 2017
NASDAQ 100 to Bounce and then Fully Correct
As has been the case since the big “shock” day in the NASDAQ 100 on June 9, I have been a little cautious (neutral) on that index and more positive on the Dow and S&P as it looked like leadership was rotating. In healthy bull markets, this is normal and a good thing. The problem comes when leadership stops rotating into the more aggressive sectors and heads into the defensive ones like staples, utilities and REITs. Tuesday saw follow through […]
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Date: June 28, 2017
Fakeout or Breakout
Friday saw the most constructive market action of the week with the little pullback seeming to come to an end. Early indications are that the bulls will continue moving stocks higher today. Starting with the NASDAQ 100, for now, until the June high or low is closed above or below respectively, I am going to remain in the neutral camp although I continue to believe that new highs will be eventually seen. It looks like the index’s leadership role has […]
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Date: June 26, 2017
Pretty Good Little Fight
It’s been 24 years since I moved out of New York City to the calm and quiet of CT. I love hearing nature at night in my pitch black bedroom instead of the horns and trucks driving down the avenues. I stayed in the city last night as I had an early conference for our custodian this morning at the NYSE and I wasn’t really interested in getting up at 4:30am to train in. Well, I forgot how loud the […]
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Date: June 23, 2017
Seasonals Say No, But Bulls Say Yes
The major stock market indices closed last week on decent footing and should be poised for further gains with the Dow and S&P 500 seeing new highs first . Even the recently hit NASDAQ 100 hung in and remains above the line in the sand I drew last week. However, this week is a seasonally weak one as it’s the five days immediately following June option expiration. We’ll see how that plays out as pre-market indications show a higher open. […]
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Date: June 19, 2017
Bulls Still in Charge (as is Amazon!)
The major stock market indices put in a very constructive day on Thursday with stocks opening at their lows for the day and closing in the upper end of the range. The beaten down NASDAQ 100 saw the best behavior as it tries to repair itself from two unexpectedly large and volatile down days over the past month from all-time highs. One clue will be a weekly closing price for this index and the semiconductors near the high for the […]
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Date: June 16, 2017
Stocks Looking Down After Rate Hike
Everything happened as expected on Wednesday. Stocks stayed in a tight range until 2PM. The Fed raised rates. Yellen spoke about reducing the balance sheet. And the bullish Fed trend was significantly muted. Given how stocks closed, there is a very short-term trend which indicates lower prices today and possibly into next week. However, with the stock market set to open lower, the opportunity to take advantage is likely gone. The Dow is now the leading index and that’s not […]
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Date: June 15, 2017
Fed to Hike Rates Today In Spite of Falling Inflation. Dow 23,000 Next
Model 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. Five 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 days, […]
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Date: June 14, 2017
