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
Stock Market Predicts Trump Victory
In what seems like the longest election season in the history of the world, the end is hopefully near on Tuesday although after 2000 and the endless surprises this year, that’s certainly not set in stone. Let me begin by stating that almost none of what I write in this report reflects my own political views. They are 100% irrelevant. I will do my best to keep that sort of editorial for another time. As I have often mentioned over […]
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Date: November 4, 2016
Fed Model Says Rally. A November Surprise from Yellen?
Before I dive into the meat of the article, our market model for today is a plus or minus .50% move until 2 pm and then a rally into the close. Two of our Fed Statement Day (today) models are live and are very bullish with a success rate of 80%. We’ll see how that works out before long. With the election just around the corner, it would be almost impossible to believe that the Federal Reserve would raise interest […]
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Date: November 2, 2016
Key Sectors Holding Up Otherwise Weak Market
Last week, I voiced a little more concern about the stock market as the S&P 400 and Russell 2000 broke to the downside from their trading ranges. So far, they haven’t been able to regain previous levels. Now, we have the S&P 500 and NASDAQ 100 trading at the lower end of their ranges and it looks like stocks have further to go on thew downside before finding more solid footing. As I have said for months, based on market […]
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Date: November 1, 2016
A Little More Concern Creeps In
At least we had one day where stocks closed firmly! As has been the case for more than a week, but really over the past month, sellers continue to snuff rallies that begin the morning. The bears say that this is a market on the verge of collapsing under its own weight. The bulls counter that with all the selling into rallies, stocks remain just a few percent off their recent highs. What I am seeing is my pullback theme […]
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Date: October 27, 2016
Canaries in the Coal Mine Part III – My Two Favorites
Updating the two, and perhaps, most important charts from last week, we can first see the New York Stock Exchange Advance/Decline Line which measures participation in rallies and declines. Before a bear market hits, you will almost always see this line peak well before price does. In other words, the troops were dying in a battle but the officers survived until the bitter end. In today’s case, this indicator still very powerfully supports the bulls. Finally, high yield bonds are […]
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Date: October 26, 2016
The Streak Has Been Broken – Gold Teetering
After four straight afternoon fades in the stock market and one neutral day, the bulls FINALLY were able to overcome a gap down open and closed near the highs for the day on Friday. However, one day doesn’t change the pullback theme of the last six weeks. Today, stocks are going to open higher with help from several deals announced along with Europe on firmer footing. AT&T buying Time Warner for $85 billion certainly is an eye opener, so much […]
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Date: October 24, 2016
Canaries in the Coal Mine Part II – The Key Sectors
Moving to the four key stock market sectors from the indices I don’t see as strong a sign, but it’s definitely not a weak one yet. The bellwether for technology, semiconductors, is first and you can clearly see a sector that is “large and in charge” or “long and strong” to use some trading desk rhymes. This is very bullish long-term. Banks are next and contrary to popular belief, rumors of their demise have been greatly exaggerated. Quite simply, the […]
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Date: October 21, 2016
Make It Four Straight
For the fourth day in a row, stocks lost steam later in the day. While the internals continue to improve, price is always the final arbiter and the 6 week pullback continues for now. At the same time, gold is popping a little and crude oil just scored a one year high, both against a strong dollar which is unusual. Both semis and software are bouncing from their first bout of weakness off the high while banks exploded higher on […]
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Date: October 20, 2016
Another Gap. Trade & Fade?
After Thursday’s reversal, Friday’s early action looked promising as I left the office before lunch to celebrate my 15th wedding anniversary playing golf with some friends at Foxwoods before the wives met us for dinner and gambling. At least the dinner went well! However, as has been the case lately, opening gaps have often been the high or low point for the day as was seen on Friday as well as on Monday. This is certainly not a sign of […]
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Date: October 18, 2016
Is Pullback Mode Finally Over???
With yesterday downside break of the very obvious trading range in the Dow, S&P 500 and S&P 400, the pundits were all over this in the media. Just like I did yesterday, I often warn to be careful of a trap. Very apparent breaks of trading range will many times result in a quick and sharp snap back as I offered. In the short-term, that is exactly what occurred on Thursday as the bears got trapped in the first hour […]
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Date: October 14, 2016
Stocks & Treasuries Looking to Diverge
With indications of morning weakness, the Dow, S&P 500 and S&P 400 will be breaking down from their six-week digestion patterns. Amazingly, for the past six weeks these indices have basically traded from high to low inside the range they saw on September 9 & 12. This action does not change my thinking about a continuing pullback and not some large scale collapse. The first thing I want to see is whether this potential breakdown is held for more than […]
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Date: October 13, 2016
Pullback Mode Remains the Short-Term Theme
My general theme of pullback mode for stocks continues in all of the major indices except for the NASDAQ 100. Gold and silver have been a more exciting story, but they, too, have paused since I wrote about them last week. Sector leadership remains very strong with semis, banks, transports and energy near their highs at the same time the defensive group has been weak. I wrote about consumer staples looking especially troubled a few weeks ago and nothing has […]
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Date: October 11, 2016
Canaries in the Coal Mine Part I – The Major Indices
For the past month, four of the five major indices have been in pullback mode after three of the five spent the previous month digesting gains from the huge post-BREXIT rally. While that theme continues today, I think the market is getting closer to resuming its uptrend with the Dow heading to 19,000. Turning to the purpose of this article, I am going to first go through the major indices in the context of canaries in the coal mine to […]
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Date: October 10, 2016
