The Train has Left the Station
It’s been quite a week for the bulls and an almost straight up move from the nasty open last Friday on the weaker than expected employment data. Earlier this week, I posted a study that concluded a huge Q4 rally was underway. And that was on the heels of a series I have published on post crash behavior that was also strongly bullish. The train has left the station. Where are all the mouthpieces who were calling for a bear […]
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Date: October 9, 2015
Down August AND September Equals HUGE Q4 Rally
Although I have been struggling to find enough stocks behaving constructively in the 9 major sectors to lead the next rally, I still do not see a meaningfully bearish scenario at this point for Q4. Besides the post crash trend, which can be viewed HERE, HERE and HERE, almost every sentiment indicator is showing excessive pessimism, which translates into positive returns going forward this quarter. After the month of August closed down, I shared two separate studies that indicated that […]
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Date: October 7, 2015
More on the Post Crash Pattern… Both Paths are Bullish
The only thing missing from a “perfect” pattern is for the S&P 500 to breach the August lows for up to a few days. I hesitate to use the word “perfect” because it rarely plays out exactly as I expect, but it certainly did so in 2011. Additionally, in both 1987 and 1989 which I partially dismissed, the final lows did not breach the crash lows before the big rally began. As you can see from the chart above, I […]
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Date: October 6, 2015
Post-Crash Behavior Still Following My Scenario
Immediately after the August 24 mini crash, I opined that the bottoming process could begin as early as that very week, which it did. I also wrote extensively and did a fair amount of media discussions on the topic. So far, the major indices are nicely following that scenario which had stocks rallying off the crash low into a September peak and then revisiting that low by the middle of October. Remember the comparisons I offered from 1987, 1989, 1994, […]
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Date: October 5, 2015
Are We There Yet?
This feels like a family car trip with one of the kids constantly asking, “are we there yet?” Much of what I have to say remains the same. Stocks have almost perfectly followed my post mini-crash scenario since August 24 and they are now in the zone for a possible successful retest of those lows between now and say, October 15. With the major indices opening sharply higher today, talk will once again focus on IF we have seen the […]
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Date: September 30, 2015
Was That It?
At their worst levels on Thursday, the major stock indices were bludgeoned and downright ugly. The Dow was down to 16,000 and could have been cracked open like a coconut today had the bulls not mounted a very strong late day charge. The rally was somewhat impressive and leaves open the question of whether we just saw the revisiting of the August lows I have spoken about on CNBC’s Fast Money and written about here. With stocks looking up more […]
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Date: September 25, 2015
Market Behaving as Expected. Bottom Shortly.
In my last update, I opined that the Fed should not raise rates and that whatever they did, the market would end whatever move it was having and reverse in the other direction. First, I am glad that Yellen & Co. did not raise rates. That time will come, but it wasn’t last week. Second, stocks rallied nicely into the Fed meeting and in the moments after the announcement. However, it was the perfect “buy the rumor, sell the news” […]
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Date: September 22, 2015
Market Reaction to Fed Announcement
The big lingering question regarding the Fed meeting after the decision is how to properly position portfolios. If you thought it was tough to get an edge on the rate decision, the markets’ reaction is even more so, which is why I would absolutely not advocate making wholesale changes ahead of the announcement. It’s one thing to flip a coin on the decision, but it’s a whole other thing to get the markets’ reaction correct as well. The four possible […]
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Date: September 17, 2015
Will They or Won’t They
I truly cannot wait until September 17th at 2:01 PM. At that time, the Federal Open Market Committee, aka, the Fed, will make a decision about interest rates. I don’t know anyone who isn’t completely exhausted from all of the Fed talk over the past few months. It’s enough already. How many times do we need to see “Countdown to the Fed Decision”, “Special Report: The Fed”, “Breaking News…”, etc. Are there no other business stories worthy of being discussed […]
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Date: September 17, 2015
Follow Up to Post Crash Behavior
Last week, I wrote a piece here and in Street$marts entitled, Post Crash Behavior Leading to Dow 20,000. If you haven’t read it, I think it’s a worthwhile read (of course I do since I wrote it!) whether you agree with the content or not. Subsequently, I was really excited to join CNBC’s Fast Money to discuss my research. A few things I want to add. I used the word “crash” very liberally in my study. After “bubble”, crash is […]
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Date: September 10, 2015
How I Can Best Protect My Investments as the Markets Tank
The following is an article I wrote for Crains Wealth last week. Investors don’t plan to fail. They fail to plan. Markets typically pullback every month. Most pullbacks are nothing more than innocuous 3% to 5% dips – short bouts of weakness followed by new highs. Every quarter or so, the shallow pullback deepens to a 6% to 9% drop. Occasionally, full-fledged corrections of 10% or more take hold. Every four to five years, a bear market hits that lops […]
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Date: September 4, 2015
Post Crash Behavior Leading to Dow 20,000
The day before Flash Crash II last week, I opined that the bottoming process could begin as early as last week. From my seat, it did. One week removed from the mini crash or crashette and stocks took it hard on the chin again. China was blamed, but that’s only a cover story and coincidence. However, unlike August 24, we did not see another Flash Crash. There was no panic. The selling was fairly orderly, which can be viewed as […]
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Date: September 2, 2015
Down 43% and Up 80% All in 12 Minutes. HFT is to Blame.
I am scheduled to be on Fox Business’ Risk & Reward TODAY, Friday, at 5:25 PM. The topic will be a follow up from the two pieces below on my rant after Monday’s embarrassing open as the Dow crashed 1100 points and the financial system was broken. Flash Crash II – HFT and Computers Run Amok… AGAIN This was a Flash Crash Although it was fruitless, I did some more digging to uncover even more inexcusable and unfair trading. My […]
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Date: August 28, 2015
Flash Crash II – HFT and Computers Run Amok… AGAIN
Well that was certainly fun on Monday! Stocks crashed 1100 points at the open, rallied 800 points and the fell almost 300 points to close down 588 points. Given yesterday’s full Street$marts edition and the two blog posts I did here, I am sure most people were expecting a market update. After all, I did offer 3 Scenarios for Monday’s Trading and the market did end up following scenario number one the most. I will get to the market in […]
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Date: August 25, 2015
Three Scenarios for Monday’s Trading
There are three scenarios I see for Monday and the short-term. 1 – Stocks open sharply lower and then spend the morning stabilizing and closing at least okay. From there, a sharp, snapback rally develops for 1-2 weeks before rolling over again to the downside. The final low is seen next month at lower levels. 2 – Stocks open sharply lower and see one or two feeble and failing rallies during the morning before a full-fledged crash in the afternoon. […]
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Date: August 24, 2015
Don the Crash Helmets! It’s Bloody and Ugly Out There!!
By now, everyone knows that the Dow Jones Industrials fell by 1000 points last week, including a 531 point down day to close the week. More selling lies ahead in the short-term. It’s getting ugly. There’s blood in the streets. Sell what you can not what you want. Margin calls are coming. Maximum pain thresholds are being hit for the individual investor. Panic is here! Before I opine on what it means, let’s put it all in perspective. 531 points […]
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Date: August 24, 2015
My Oh My… The Music Has Stopped
If you listen to the media or have an active Twitter feed about the markets, you would think stocks have literally collapsed into the depths of a bear market. We MUST be down at least 10-15%! Yet as I type this, the S&P 500 has pulled back all of 6%. It’s a little more than half way to the 10% correction level.The Dow hit my initial downside target of sub 17,000 and the S&P 500 is on its way to […]
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Date: August 21, 2015
Semis & NASDAQ 100 at Odds
On Tuesday, the Semiconductor Index as well as its ETF counterparts hit new lows for 2015. This is important for two main reasons. First, historically, as go the semis, so goes the NASDAQ. And as goes the NASDAQ, so goes the broad stock market. It is an intermediate to long-term concern that the semis are more than just struggling. Bull moves typically do not continue without support from the semis. Below you can see the NASDAQ 100 which is anything […]
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Date: August 19, 2015
U.S. Recession Part II – Off the Beaten Path
Continuing the theme of recession, two of my favorite off the beaten path economic indicators are below. The first is the Restaurant Performance Index, which essentially measures the health of the average consumer rather than the Wall Street executive spending $1000+ per couple at Masa or Per Se in New York City. You can see on the left side of the chart that this index steadily weakened well before the crisis hit and was solidly below the 100 level which […]
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Date: August 19, 2015
U.S. Possible Recession Part I – The Consumer
There has been renewed chatter lately about the U.S. economy being on the verge of recession. It’s not as loud as we (wrongly) heard in 2011, but it’s definitely growing. I vividly remember the Economic Cycle Research Institute doing interviews on CNBC, Fox Business, Bloomberg and just about every major financial website, pounding the table that there was almost 100% chance of recession in 2011 and their indicators were “never” wrong. “Never” is one of those words I don’t typically […]
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Date: August 17, 2015
