Will Santa Claus Call to Broad & Wall?
Yale Hirsch of Stock Trader’s Almanac fame (and a perennial must own book now written by his son Jeff) coined the phrase, “If Santa Claus fails to call, bears may come to Broad & Wall”. Research showed that if the last five trading days of the year and first two trading days of the New Year (Santa Claus rally) did not show a positive return, a bear market or significant correction was likely during the coming year. Bears love to […]
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Date: December 23, 2016
Top Financial Tips to Year-End
This year-end is a very unusual one. Not only will the presidency be changing in early 2017, but Congress will now join the party in power for the first time since the 2008 election and 111th Congress. That means for the most part, any legislation that passes Congress will likely be signed into law by the president. Before you dismiss this as a political post, read on. Because Speaker of the House, Paul Ryan, has been in power for several […]
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Date: December 21, 2016
Stocks Tired But No Reason to Sell Just Yet
Stocks are now in one of the most seasonally strong times of year within one of the most seasonally strong times of year. The big question is whether the market has used up most of the available fuel and needs a break first. Certainly, the last few days have seen a mild pullback. It looks like the bears have a tiny bit of work left to do on the downside. However, those looking for any significant price damage during the […]
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Date: December 19, 2016
Fed to Hike Rates But All Not Well
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. Two 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, the upside edge is just outside […]
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Date: December 14, 2016
Irrational Exuberance
This past weekend was the first official ski weekend for my youngest son and me. And boy was it cold in Vermont! But with mid-winter conditions, it was hard not to overdo it. I overdid it and now I am in a world of pain. Neck, back, quads, calves, fingers. Anyway, as you can imagine, I am usually a chatty one on the lift. Since we typically ride the quad or 6 pack, we are usually with strangers. When people […]
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Date: December 12, 2016
Bulls Continue to Trample Ahead
On Wednesday, I gave a higher level overview of how the stock market is behaving along with the leadership and some key indicators. Nothing has really changed. Almost everything is severely overbought, but they can still become even more overbought. Pullbacks through year-end should be shallow and no more than 2-3%, lasting just a few days. Another piece of good news for the longevity of the bull market came this week. The NYSE Advance/Decline Line scored an all-time high. That […]
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Date: December 9, 2016
Window for Decline Almost Closed
For the past three weeks, our models have been defensive regarding the stock market after the first week’s post-election surge. I often say that when certain conditions are present, a “window of opportunity” opens for a stock market decline. The longer time passes without a decline, the more likely the window will close. Today, the window is starting to close and I imagine that by two weeks from today, it will be fully closed, modest decline or not. The Dow, […]
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Date: December 7, 2016
Yahoo Finance Today & Quick Update
I am excited to join the good folks at Yahoo Finance for their live show today at noon. To watch, go to finance.yahoo.com and you should see the show streaming. While so many people fretted over the election in Italy, the global financial markets don’t really seem to care this morning with the bulls in charge. Although December is a very positive time for U.S. stocks, it’s backloaded, meaning that the second half of the month is much more powerful […]
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Date: December 5, 2016
1991 & 1992 Offering Good Clues Too
Yesterday, I wrote about the analog with 1980. If I change my research parameters from presidential elections to similar price behavior during any year, I come up with a very different analog. The current market is first below and you can see the BREXIT bottom in the middle, followed by the big summer rally and period of digestion before the current rally began on the right side. In 1991, we saw a massive rally after the U.S. and its allies […]
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Date: December 1, 2016
1980 a Good Analog for 2016
Since the election the financial media and pundits have been fascinated with labeling the stock market’s strong run as The Trump Rally. I get it. And it’s really only a silly name anyway. However, the market isn’t rallying just because Donald Trump was elected. If the Senate went blue, I would argue that we would seen a muted response. Equally, if not more important, is the fact that the GOP now controls Congress and similar to how the government looked […]
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Date: November 30, 2016
Stock Market Yawning at Recount
After a small gain on Wednesday, the seasonality bulls got their work done on Friday as the strong trend held to form. Without any weakness leading into that trend, it made it too tough for me to play it. However, I did tweet on Friday that taking a small short position at the close for seasonal weakness on Monday seemed like a better risk/reward play. Heading into the new week, we have to be on the lookout for the typical […]
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Date: November 28, 2016
Seasonals Favor Bulls into Weekend
Today and Friday are well known and widely followed seasonally strong days for stocks. That doesn’t mean we should just blindly buy and hope things work out. Stocks have been almost straight up since the election so you can certainly argue that a lot of fuel has been used up, including the last two days. As I mentioned on Monday, if the stock market was down on Tuesday I would have wanted to be long on Wednesday and Friday. That’s […]
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Date: November 23, 2016
Bulls Not Done
The bulls came back from the weekend in a good mood as stocks are rallying into lunch on Monday. While banks are taking a little breather, commodity-related sectors are leading with energy, metals & mining and materials all doing well along with some of the beaten down Hillary sectors, utilities, staples and telecom. High yield bonds are finally showing some oomph and emerging market countries are bouncing. The NYSE A/D Line is showing decent participation. I won’t rehash all the […]
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Date: November 21, 2016
Three Scenarios to Year-End
On the surface, you would think that the past nine days were nine easy days for the bulls. After all, the Dow was up more than 5%. What could be bad? Beneath the surface, there was much wrong with the post-election rally that began the day before the election. To begin with, the Dow was a leading index, followed by the Russell 2000. The S&P 500 and S&P 400 were nothing special. The NASDAQ 100 was actually down over the […]
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Date: November 18, 2016
Clinton Scenario But Trump Portfolio
In several interviews before and after the election, I offered that stocks would decline 3-6% on a Trump victory and a better buying opportunity would come towards Thanksgiving. At the overnight lows as election results were being reported, stocks were 5%. That’s not how I envisioned the pullback occurring, but it did. I certainly did not see the market forming a low overnight and then rallying 8% like a rocket taking off. Overall market directional behavior last week was conforming […]
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Date: November 14, 2016
Another Wrong for Me
Besides misreading the research, my personal electoral opinion was wrong which was not based on research and cold, hard facts.In that email as well as in a subsequent article it just didn’t seem plausible for Trump to win the necessary 270 electoral votes. I said he absolutely needed Florida, North Carolina, Arizona and Ohio which had correctly predicted the last 13 presidential contests. Sweeping those four had a 6% chance of occurring. And even then, he would need to turn […]
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Date: November 11, 2016
Election Model Correct… AGAIN
Thanks to FOX in CT for having me on the day before and the day after Election Day. Below are the two links to the segments. https://www.youtube.com/watch?v=cbfaTfILVDs&feature=youtu.be https://www.youtube.com/watch?v=mCI4ZmVWgec&feature=youtu.be The longest election build up in our history is finally over and the outcome was certainly not what the mainstream media and pollsters expected. Throughout October and early November, it was widely expected by ABC, CBS, NBC, MSNBC and CNN that Hillary Clinton would become our 45th president. The major polls offered […]
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Date: November 11, 2016
The Path to 270 & Stock Market Reaction
Don’t forget to vote! Thanks to NBC, ABC and FOX in Connecticut for having me on regarding the election. Each segment was very different and offered new information. The first two interviews are below and I will post the FOX one as soon as I have it. Statistical Model Provides Hints at Presidential Outcome http://wtnh.com/2016/11/06/financial-expert-says-election-could-have-impact-on-stock-market/ It’s been a long two years since the midterm election and I think I can confidently state that the entire country has election fatigue. I […]
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Date: November 8, 2016
Time to Buy or Wait
After 9 straight down days and a little help from the FBI, the stock market looks to soar higher at the opening on the increased likelihood of a Clinton victory on Election Day. While I completely understand the “devil you know” argument and continuation of much of the same from the past 8 years, I am somewhat surprised the market is so at ease with the prospect of higher tax rates on job creators and widespread social program spending. However, […]
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Date: November 7, 2016
8 Straight Down Days – Quiet Bear Market?
The S&P 500 is now down 8 straight days. Pundit chatter in the media and on Twitter has been fairly negative. Option traders are bearish. The volatility index is up almost 100% since September. Either a bear market has quietly begun or the market is approaching yet another good dip to buy in an ongoing bull market. I think you know where I stand. Seasonality studies are abound that the market just entered the best six months. Additionally, it’s also […]
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Date: November 4, 2016
