Mixed Messages to Start the New Week
A new week, more of the same geopolitical news. Terrorist attacks in London. Trump tweeting. Economic mixed messages. Fed to raise rates. Stocks see more new highs. Friday’s market behavior was fine with the Dow, S&P 500 and NASDAQ 100 all adding to their recent new high run, however the S&P 400 and Russell 2000 seemed to run out of gas after lunch. Participation and leadership were solid. Friday’s employment report was also a mixed bag with the economy creating […]
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Date: June 5, 2017
Love or Hate It, Markets Don’t Care about Trump
On Thursday, the Dow and S&P 500 broke to fresh all-time highs to join the NASDAQ 100. The major index trading range since early March appears to be ending in favor of the bulls. I say “appears” because although breakouts are beginning to occur, every now and then they are fake (like news) and immediately reverse and head in the opposite direction. Only the S&P 400 and Russell 2000 are lagging, but I would think they should both follow suit […]
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Date: June 2, 2017
Odd Day on Thursday Gives Warning
Thursday was an interesting day in the stock market. All of the major indices were up nicely in the morning. And while the S&P 500 and NASDAQ 100 continued making new highs into the afternoon, the S&P 400, Russell 200 and Dow Industrials did not with the first two seeing real weakness during the afternoon. Additionally, even though the NYSE A/D Line and high yield bonds also scored new all-time highs as you can see below, the former went from […]
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Date: May 26, 2017
Bulls Are Resilient
On May 8th, I first started discussing what I saw as a skewed risk/reward ratio with 500 possible points of upside and 1000 points possible on the downside. Over the years when there was a decent chance for stocks to decline, I often referred to it as a window of opportunity that stays open for a period of time before closing. Three weeks after my comments, stocks have basically gone nowhere. We saw a brief dip when the “hysteria” over […]
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Date: May 25, 2017
Missing the Excitement
While nothing has really changed regarding the risk and reward for stocks, the bulls have moved the major indices a bit further than I thought they would after last week’s one day drubbing. Frankly, I thought we would see a few days up and then rollover for another decline towards the lower end of my risk range, Dow 20,000. Instead, the Dow is in the upper middle, giving the edge to neither group. The bears can point to the Russell […]
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Date: May 23, 2017
Bears Whipped into a Frenzy. Half Way There
I find it mildly amusing that after a 3000 point rally in the Dow, bears and pundits have been whipped into a frenzy because the Dow went down 370 points in one day. Talk about overly dramatic and idiotic. The bull market ain’t over folks, the same line I have said every day, week, month, quarter and year since 2009. Disavow and hate as they may, the bears have been, are and will be wrong. Don’t get me wrong. One […]
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Date: May 18, 2017
Impeachment? Another Watergate? What Will the Bears Say Next?
With yet another story “breaking” about President Trump, the markets seem to finally care, even if it’s only a short-term pullback which I believe it is. Day after day, week after week and month after month, there has been an ongoing deluge of negative stories in the press about Trump, whether deserved or not. The markets just kept yawning and moving higher. Until today. I would expect a barrage of impeachment calls and calls for independent investigations, etc. Markets will […]
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Date: May 17, 2017
Reality over Rhetoric
The markets begin the week with little changed from last week. Volatility remains absurdly low, but remember, regardless of what you hear on the financial shows, markets do not go down just because vol is low. And bull markets do not end with vol so low. The major stock market indices are not in sync. The Dow continues in its range but looks to be testing the top of it. The S&P 500 should try to poke above its range […]
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Date: May 15, 2017
Lines in the Sand Drawn
We saw a fairly strong selling wave on Thursday during the first hour of trading. However, by mid afternoon, the bulls stepped right back up and recouped all of the losses before closing modestly lower. Their resilience continues. Given how most of the major indices are positioned, the bulls need to score new highs sooner than later to reset the clock. On the bears’ side, a close below Thursday’s low should set a deeper pullback in motion. That’s the one […]
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Date: May 11, 2017
Bulls Still in Control Over Long-Term
Let’s continue on the same theme I started the other day, risk versus reward. While I firmly believe that the bull market remains alive and fairly healthy, I do not like the risk/reward right here. My view is that Dow 21,600 is the upside ceiling while downside risk looks to be 20,000 or even a little lower. That’s just not the set up you want over the long-term and I think pruning and protecting is the right call here, whether […]
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Date: May 10, 2017
Sell The News
Not much has changed in the stock market since last week as volatility continues to be historically low. While the S&P 500 poked above the recent range on Friday, the rest of the major indices weren’t exactly in line. That’s not a big deal. Small caps looked like they were getting ready to step up, but we haven’t seen signs of confirmation just yet. Two things I did find interesting were the April employment report, released on Friday as well […]
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Date: May 8, 2017
Looking for Mr. Volatility
Greetings from 39,000 feet as I am on my way home from the west coast. A quick visit in Scottsdale followed by my annual industry trade association conference in San Diego and I cannot wait to get home! If all goes well, that was my last trip to CA this year. It’s just brutal getting there from Hartford these days and the NY airports are a mess and awful to get to. The Fed concluded their two day meeting today […]
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Date: May 3, 2017
The Bears Are Wrong
With the French elections going the way of the Euro bulls and corporate earnings continuing to exceed expectations and the high level details of Trump’s tax plan released, the stock market had itself a nice little run on Monday, Tuesday and half of Wednesday before getting a little tired. What a difference a week makes. The bulls made some solid ground with NASDAQ 100 and Russell 2000 seeing all-time highs and the S&P 400 only a whisker away. The Dow […]
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Date: April 27, 2017
Reality over Rhetoric. Bulls are Large and in Charge
I have long said and continue to reiterate on a regular basis that it’s not so much what the news is, but rather how the markets react. Clearly, the markets celebrated the French election results as the two main political parties were cast aside. Independent, Emmanuel Macron and nationalist, Marine LePen will face each other in a runoff on May 7. It doesn’t matter if you love or hate either candidate nor what they stand for, much like we saw […]
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Date: April 25, 2017
Dow’s March Low Breached But Bulls Getting Ready
There is not a lot different from what I wrote two days ago. Stocks continue to digest, pullback or whatever else you want to call this current pattern of behavior. The only difference on Thursday morning is the one of the major stock market indices, the Dow 30, breached its March low as IBM’s poor revenue number took the stock down almost $10. The S&P 500 is hanging in, but the S&P 400, Russell 2000 and NASDAQ 100 are all […]
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Date: April 20, 2017
Getting Closer to a Bottom
Stocks begin the week on their heels after a relatively ugly day on Thursday. The pullback and selling are not over just yet, but the market is certainly closer to the end of the decline than the beginning. With Thursday’s price action closing at the low of the day and the March bottom only a few points away, I would think that the major indices are heading for a quick trip below the March lows before the bulls put up […]
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Date: April 17, 2017
Banks Looking for a Bottom Amid General Market Strength
With earnings season in full swing and estimates ramped up by Wall Street, companies will really need to impress for stocks to get a boost. Banks are front and center right now. With the banking index down 10% since the early march peak, I am looking for a bottom in this sector and revisiting of the old highs later this quarter. However, the most important hurdle will be for this group to close above the 93 level, which will effectively […]
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Date: April 13, 2017
Two Favorite Canaries Looking Fine
The final two canaries are probably my favorites because I believe they are the most powerful and predictive. In every bull market of the modern investing era, both of these canaries gave 3 to 21 months notice that trouble was brewing. However, that doesn’t mean that every time these canaries warn, bear markets occur. It just means that they haven’t missed any. The first chart is that of New York Stock Exchange’s Advance/Decline Line which simply measures participation in the […]
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Date: April 12, 2017
Sector Canaries Healthy with Some Small Wounds
Turning to the four key sectors I follow, we don’t have as strong a picture as the major indices, but they are still okay. Semis are first and they have been the strongest for some time, almost too strong, but that’s a topic for a different piece. While they have yet to eclipse their Dotcom bubble high from 2000, they continue to make new highs for this bull market. Banks are next and after a dizzying pace following the election […]
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Date: April 11, 2017
Bulls Not Ready Just Yet
As we head into the holiday shortened week, the bulls don’t seem ready just yet for that next assault higher. Last Wednesday’s reversal still looms and there are small wounds that need to be healed. Don’t forget that our markets are closed on Friday for Good Friday and liquidity may be a touch lower because of the first two nights of Passover on Monday and Tuesday. All of the major stock market indices experienced sharp reversals last Wednesday and while […]
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Date: April 10, 2017
