Bulls Won’t Go Down Without a Fight
As I wrote the other day regarding the dramatic reversal in the NASDAQ 100, this bull market is not going to die easily nor without a fight. Even pullbacks and corrections have been and will be tough to come by. As I have seen a few small short-term concerns pop up, I still believe the bulls are going to fight hard to prevent any significant price damage. As I am keenly watching for signs of even a short-term peak, the […]
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Date: July 20, 2018
Technology Reversal. WOW!
After Monday’s close, highflying FAANG stock, Netflix, reported very disappointing subscriber growth. It was a shocker. The company’s stock plummeted after hours, over night, pre-market and as stocks opened Tuesday morning to the tune of 15%. 15%! That’s almost a crash. The tech-laden NASDAQ 100 followed suit and the selling spilled over into the broad market as you would expect. Analyst after analyst and pundit after pundit uniformly poured ice cold water on the technology sector with the most positive […]
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Date: July 18, 2018
Market May Need Some Help from Banks
If you follow me on Twitter, you know I wasn’t enthralled with Friday’s session. While price action in the major stock market indices was strong, more stocks were down on the day than up. Additionally, banks reacted poorly to earnings and high yield bonds closed at their low of the day. Again, it was only one single day, but there was some mild weakness beneath the surface. On the sector front, there isn’t much new. Discretionary is the lone leader […]
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Date: July 16, 2018
Trapped Again. What Do the Bears Do Now???
Following up from the piece earlier this week, Bull Markets Don’t End Like This, the path of least resistance continues to be higher even though the Trump administration added tariffs on another $200 billion in Chinese goods. As you would expect in the most powerful bull markets, the news was just a one or two day pullback/pause after stocks had appreciated 3% over the previous four days. In other words, it was yet another in a long line of bear […]
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Date: July 12, 2018
Bull Markets Don’t End Like This
Over the past week we have seen two decent signs of the low along with two disappointing signs for the bulls. On Thursday, it became clear that the bulls were just teasing the bears and that the path of least resistance was higher. I was also heartened that one of my primary short-term models turned positive before the July 4th holiday. From here, I fully expect the S&P 400, Russell 2000 and NASDAQ 100 to score all-time highs this month. […]
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Date: July 9, 2018
Banks in Trouble
Stocks ended the month of June with the bears showing a tiny bit of teeth during the afternoon as the major stock market indices gave up most of their gains. The multi-week June swoon looks to continue at the open on Monday as more of the Trump tariff tantrum weighs on stocks with Canada now fighting back. Semiconductors also have some negative news and that supports my concern of leadership change from the the NASDAQ 100 to perhaps the value […]
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Date: July 2, 2018
The Low Looks In
In yesterday’s post, I mentioned that the window for a low had just begun to open and that I thought stocks were still on pace to find buyers by the end of next week. The bull seem to have cooperated on the early side of the time range although I am certainly not beating my chest that I called the bottom to the day. Today is month and quarter end so I wouldn’t be surprised to see some “curious” activity, […]
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Date: June 29, 2018
Window Beginning to Open for a Low, BUT…
As I wrote twice this week already, I don’t think the pullback was over just yet. My original thought was it was a 5-7 day affair which has a low in place by next week in the 23,500 to 24,000 range for the Dow. The market is entering that zone now and puts today on watch for a bottom if we can get some early selling to be thwarted by mid-afternoon. While the Dow and S&P 500 continue to be […]
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Date: June 28, 2018
Bears Attack. Bulls Defend.
Stocks were experiencing a strong selloff on Monday right through lunch. Then Trump trade chief, Peter Navarro, hit the media circuit to “clarify” what was being reported by the Wall Street Journal which was a cessation of Chinese investments into U.S. technology companies. Now normally, Larry Kudlow would have been the administration’s mouthpiece, but he has been recovering from a heart attack. So, the most protectionist person in the administration had to come out as less protectionist. An odd day […]
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Date: June 26, 2018
Bears Out of Hibernation
The bulls could barely muster a feeble bounce on Friday, especially after the Dow was down 9 straight days, something that does not occur too often in a bull market. Keep in mind, however, that those 9 down days only amounted to a 3.4% decline which is basically one or two bad days. Additionally, as you can see below, the Dow is once again visiting its average price of the last 200 days, more affectionately know as the 200 day […]
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Date: June 25, 2018
Don’t Get Fooled by Negative Nonsense
After an ugly opening stocks scratched and clawed to cut their losses on Tuesday, something I did not expect to happen. The bulls’ strength was impressive. I was hoping to see some follow through on Wednesday, but that did not materialize. The Dow Industrials remain the weakest index followed by the S&P 500, S&P 400, NASDAQ 100 and Russell 2000. I was clearly wrong in the glimmer of hope the value sector gave for new leadership. Their leadership will one […]
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Date: June 20, 2018
Bulls on Their Heels, Unlikely Enough Strength to Muster a Stand
The bulls mustered enough strength on Monday to avoid closing anywhere near last week’s lows. That was mildly impressive. However, the Trump Tariff Tantrum is front and center today as it was on Monday as overnight action looks like a nasty 300+ point decline to begin Tuesday. Unlike yesterday, I will be surprised if the bulls have enough power and ammunition left to thwart the bears. Taking somewhat of a stab in the dark, I would imagine a day where […]
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Date: June 19, 2018
Trump Tariff Tantrum Again
Stocks came back from some mild morning weakness on Friday but still look like they want to pause to refresh as the on again, off again continuation of the Trump Tariff Tantrum is front page now. In the very short-term, it’s pretty easy. Closing above last week’s highs gives the bulls energy to move higher. Closing below Friday’s low means stocks could see a mild 2-3% pullback before heading to all-time highs in Q3. The seasonal trends show some weakness […]
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Date: June 18, 2018
Bears May Have Reason to Celebrate But It Will Be Short-Lived
On Wednesday with most of our tried and true Fed Day trends muted, I mentioned the possibility for a negative set up. With the S&P 500 down on statement day, that set up a shorting opportunity for yesterday, today and into next week. Nothing big, just some potential mild weakness after a very nice run into the Fed meeting. If any weakness does materialize, it will be interesting to see if tech cedes leadership in favor of value. With the […]
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Date: June 15, 2018
Canaries in the Coal Mine Part III – The Others
The final group of canaries don’t have anything in common. I just grouped them together to avoid having three more small canaries. Let’s start with high yield (junk) bonds which I write about very often on the blog. I like to use one of the exchange traded funds (ETF) ones as well as one from the mutual fund space. Right below, you can see JNK which is one of the two major high yield bond ETFs. It peaked in early […]
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Date: June 15, 2018
Canaries in the Coal Mine Part II – Sectors
Let’s turn to the next group of canaries and see how our sectors were doing at the January peak. First, I am repeating the Dow Industrials with the Dow Transports right below it to show Dow Theory which says that these two indices should be making highs together or a warning is sent. While both indices saw all-time highs in January, you may observe that they were on the same day or even week. That would not be a warning […]
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Date: June 14, 2018
Canaries in the Coal Mine Part I – Indices
Canaries in the coal mine is always a vitally important issue for me to write as it speaks to the long-term, especially when it comes to the risk of a bear market. In 2018, since stocks corrected 12% in February, I have boldly, firmly and confidently stated on CNBC, on Fox Business, on Yahoo Finance, on all local stations in CT and almost every week on the blog that the bull market which began in March 2009 remains alive and […]
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Date: June 13, 2018
***SPECIAL Fed Update – Continued Arrogance & Pomposity Spells Recession***
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 were muted and today is no different. As with most statement days, the model for the day calls for stocks to return plus or minus 0.50% until 2:00 PM. […]
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Date: June 13, 2018
Leadership A Changin’
Stocks appear to be shrugging off the reversal I wrote about last week, pretty much as expected. There is a lot of the news docket this week with the Fed meeting on Tuesday and Wednesday as well as the summit in Singapore with North Korea. While the latter will be all the focus, the former has a much better chance of moving the markets. You should expect another special Fed edition shortly. Over the past week or so, index leadership […]
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Date: June 11, 2018
ANOTHER Reversal
While stocks opened higher on Thursday, the bulls couldn’t hold on to those gains as the Trump Tariff & Trade Tantrum sprouted up again. With the G7 meeting this weekend, stocks are probably going to pause and let tensions cool off. As headlines and tweets crossed the wires, stocks gave up those early gains and for a few hours, selling was strong. Below is a chart that has become all too familiar. It’s the Russell 2000 Index of small cap […]
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Date: June 8, 2018
