Going Nowhere
Well, at least last Wednesday was fun if you were a bull! The Fed raised rates by 1/4% as expected and stocks took off on the premise that there would only be two more interest rate hikes the rest of 2017. That hurt the banks and the economically sensitive sectors and gave a strong push to the defensive sectors. I remain skeptical of only two more hikes and stand by my forecast that four hikes are in the cards this […]
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Date: March 20, 2017
Fed to Hike Rates Today. Dow 23,000 Still On Track
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. Three meetings ago was one of the rare times where the models strongly called for a rally on statement which was correct as well as a decline a few days later which was also correct. Today, there is a significant upside edge […]
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Date: March 15, 2017
Pullback Remains in Place. Junk May Hold Key.
The short-term pullback I have seemingly written about for weeks and weeks remains in place although I am certainly not taking credit for calling it in a timely fashion. The Dow, S&P 500 and NASDAQ 100 have all pulled back constructively while the S&P 400 and Russell 2000 are uglier. The three stronger indices are just about to kiss their 21 day moving averages, while their weak cousins knifed right through the 21 as well as their 50 day moving […]
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Date: March 9, 2017
Bulls Remain Large and in Charge Despite Pullback
We had a lot of negative news between Friday’s market close and Monday’s open, almost all on the geopolitical front with the vast majority surrounding President Trump. Of course, Deutsche Bank finally agreeing with the markets that they needed to raise capital was icing on the cake. In a weak market, that backdrop would have yielded a 1-2% lower opening on Monday. In a strong market, we’re talking about .25-.50% lower. Stocks are due and have been due for a […]
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Date: March 6, 2017
Volatility Genie Trying to Pop Out
After what has been celebrated as this huge, epic rally on Wednesday, the major stock market indices gave back all of their post 9:30am gains and then some on Thursday. I mentioned the other day that volatility compression leads to volatility expansion and vice versa. When the volatility Genie finally gets out of the bottle, we will probably see a sustained increase. I think we’re close to that now. Please remember, volatility does not always mean decline. It means wider […]
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Date: March 3, 2017
Hot IPO, SNAP, Comes Out. Time to Buy?
“Hot” IPOs like Alibaba, Twitter and Facebook are usually very emotional, much anticipated and huge financial media events. Investors clamor for these stocks, usually throwing caution to the wind as fundamentals are trampled by greed. The media are usually camped out at the NYSE or NASDAQ with minute by minute updates as to where the stock may open. As I have discussed over and over, emotion in investing can have a very detrimental impact on your portfolio! That’s one of […]
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Date: March 2, 2017
Energy Stocks Forecasting Crude Oil Decline
Good morning! As I finish this up, I am back at the airport waiting to board an earlier flight than expected back home. I was hoping to sneak away for a few hours and race through 18 holes, but Mother Nature gave us so much rain that the golf course and driving range were closed. So rather than waste a full day, I booked an earlier flight on the always flexible Southwest Airlines. At the same time, my 8 year […]
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Date: February 28, 2017
Sector Leadership Remains Very Strong
This is going to be a quick update as I am standing at the gate in Hartford waiting for my delayed flight to board. It’s never a good sign when early morning flights are late. I am heading down to the east coast of Florida for a quick trip to visit clients and maybe even hit a few golf balls in between meetings if my back holds up. Let’s get the theme out of the way early. The short-term still […]
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Date: February 27, 2017
Short-Term Iffy But Long-Term Remains Strong
Following up from Friday’s post, stocks remain overbought and certainly stretched to the upside although the same can certainly be said all month. They are much in need of a break or at least a quick pause to refresh. However, sometimes strong momentum overpowers everything as we have seen from time to time. I closed last week by saying that the bull market is absolutely not over in my opinion. That prevented the usual emails. Look no further than two […]
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Date: February 21, 2017
Trump Top Ticking Stock Market?
As I write the next issue of Street$marts, there is a lot of Donald Trump included. Not so much from a political standpoint, but more how he is impacting the stock market and economy. It’s really been amazing that every single meeting I have with clients and prospects, the Trump question is the first one asked. As you know, when it comes to investing, I have a strong contrarian side to me. As the late Joe Granville once said, “if […]
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Date: February 17, 2017
Sector Leadership Immunizes Stock Market from Bear Market
On Friday, I wrote about the Russell 2000 and what a potential breakout could mean for the stock market. At the open today, this index hit a fresh all-time high. Before breaking out the balloons and party streamers, let’s see if it can close at new highs and not give back too much over the coming days. With the Dow closing above 20,000 for five straight days I will have a new target very shortly that looks to be several […]
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Date: February 13, 2017
Small Caps Getting Ready to Lead While Worries about Trump Persist
Yesterday, I wrote about the major stock market indices and how the Russell 2000 was finally waking up. Below is an old chart which I first offered in early January. You can see that the small caps have been in a tight trading range all year and are now trying to break out to the upside. With so many studies pointing lower, this is one index which could counter some of the negativity and give the market a little push […]
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Date: February 10, 2017
Bears Still Struggling to Make Progress
Happy snow day to those of you in the northeast! For several weeks, there have been all kinds of studies which indicate that the risk/reward for stocks is skewed to the downside over the coming weeks and few months. The same can be said of some daily studies. When I say skewed, I mean favors a typical and normal pullback of 2-5%. Yet each time the bulls look tired, they somehow prevent the bears from making any progress. In the […]
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Date: February 9, 2017
BONUS Surprise: Inner Circle Shakeup
Bonus #2 – Inner circle shakeup Given how Donald Trump’s campaign went and how much turnover there was at the top, that theme continues straight to the 2018 mid-term election. At least 3 cabinet members will be replaced by then and another one or two from the rest of the inner circle. Some will be asked to leave while others will become frustrated with either the president or acrimony in Congress. Steve Bannon, Kellyanne Conway, Sean Spicer, Wilbur Ross, Steve […]
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Date: February 8, 2017
BONUS Surprise. Janet Yellen Reappointed Fed Chair
#9 – Janet Yellen reappointed Fed Chair Donald Trump attacked and criticized the Fed and Chair Janet Yellen during the campaign. He blamed her and them for many of our economic woes along with the stock market being on the edge of a cliff about to plummet. Once 20,000 was hit, Trump changed his tune dramatically, exclaiming how great it was to achieve that milestone with more upside ahead. As Yellen’s term as chair expires at the end of 2018, […]
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Date: February 7, 2017
Donald Trump is a One Term President But…
1 – Donald Trump is not on the ticket against the Democrats’ candidate in 2020 I find it very hard to believe that Donald Trump will want to run again in 2020. While 74 is by no means old, he will have literally done it all by that time. I think there is a binary path to his party’s nomination in 2020. First, things go so well that Trump opts to leave on top, securing his legacy with the country […]
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Date: February 6, 2017
Bulls Win Big on Friday But Still Not Ready
Very nice day for the bulls on Friday as the monthly jobs report was really the Goldilocks scenario. Not too strong and not too weak. The U.S. saw decent growth with some mild revisions lower but almost no wage inflation which caused expectations for a March rate hike by the Fed to decline to roughly 20%. I would not hang my hat on the Fed staying put in March. There are many data points between now and then and I […]
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Date: February 6, 2017
Trump and Putin Have a Falling Out
2 – Trump and Putin have a falling out This is probably the least surprising of all on the list. One of my theories is that Trump has been so pro-Putin because Obama and Hillary Clinton were such adversaries of Russia. It was yet another good way to differentiate during the campaign. The U.S. and Russia’s interests are so inversely aligned that it would be almost impossible for the two countries not to have a falling out by 2020. I […]
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Date: February 6, 2017
Moderate Justice Chosen for the Supreme Court
3 – Moderate Justice chosen for the Supreme Court Whether Donald Trump has a fight with the GOP or not or if the President finds common ground with the Democrats, a moderate Justice for the Supreme Court will be nominated from one of the judges whom the GOP already approved of at a lower court. All indications are that Trump’s first nomination to the bench, due in early February, will have similar views to that of Antonin Scalia whom he […]
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Date: February 3, 2017
Trump and Chuck Schumer Kumbaya
4 – Trump and Chuck Schumer kumbaya As recently as 2011, Donald Trump may have been or was aligned with the Democrats. He and Senate minority leader, Chuck Schumer, used to be pals in New York City. If President Trump and the GOP have a falling out, it’s very likely that Chuck Schumer and some of the Democrats will fill that void, especially if it’s during a period where a Supreme Court Justice vacancy needs to be filled. If you […]
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Date: February 2, 2017
