Panic Buying Seen Off January Low… Will It Matter???
On January 22nd and January 29th, an extremely rare occurrence was seen in the stock market; something that had only happened 9 times since 1971. Over a span of five days, there were two days where 90% of the trading volume on the New York Stock Exchange took place in stocks that were up on the day. 90% volume days are nothing new to analysts. They have been watched since the days of Jesse Livermore in the 1920s. However, two […]
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Date: February 4, 2016
Stocks Continue to Dance Just Like 2008
On January 21st, I put out this piece calling for the internal or momentum low. That was the bottom where stocks stopped going down in accelerated fashion and the majority of the damage was done. Typically, that’s not the low where the strong rally begins. That’s later. In this case, from a low in March and then into Q2. http://www.investfortomorrow.com/newsletter/CurrentStreet$marts20160121.pdf I know I have beaten the proverbial dead horse when I say that 2016 looks nothing like 2008 from an […]
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Date: February 3, 2016
What Would Ray Dalio Say Now?
All I heard Friday was how “surprised” everyone was with the magnitude of the rally. If people were paying attention, it was anything but a shock. I spoke about the internal or momentum low being hammered in the very day it happened and regardless of what it would lead to, stocks had to rally first. And rally they have! Friday’s activity saw the second 90% up day in volume over a one week span. Historically, that has been very bullish, […]
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Date: February 1, 2016
2016 Continues to Look Like 2008
Several weeks ago when I was ranting how 2016 looks nothing like 2008, 2016 not a 2008 Redux and later The One Comp to 2008 that Does Hold Water I compared the January 2008 period to that of 2016. It’s a comp that continues to make the rounds so here it is updated, yet again. If this comp continues to work, which they seldom do to fruition, here’s what’s coming next. Remember, the January 2008 decline was 20% all in […]
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Date: January 29, 2016
Will the Doves Assume Control of the Fed Today?
It doesn’t even feel like the world has recovered from the hangover left by Janet Yellen and the Fed after their ill-fated and poorly timed December interest rate hike, but now, it’s FOMC announcement day again. However, unlike December when a rate increase was widely expected, the Fed is not going to take any action today. The Fed’s post-announcement commentary is what everyone will sink their teeth into for clues of future rate hikes or the committee’s possible move back […]
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Date: January 27, 2016
Internal Bottom Confirmed but Volatility FAR from Over
Last week I wrote about the internal or momentum low being put in on Wednesday. Thursday’s action was essentially a stand off between the bulls and bears although the bulls had to be pleased that stocks stopped going down. Friday was the big point gainer for the bulls, but there wasn’t much upside after the big gap opening. Assuming I remain correct in my assessment of the bottom, stocks usually see a day or two of red before exceeding Friday’s […]
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Date: January 25, 2016
Internal or Momentum Bottom Being Hammered In
Stocks continue to be very volatile, one of the primary casualties of higher interest rates, but certainly from the dislocations in the energy market, which has seen an epic and historic collapse. I imagine that the large oil-based sovereign wealth funds in Norway, Saudi Arabia, Kuwait and Qatar have been massive sellers of global equities this month to continue to fund their social programs in the face of imploding energy prices. The relentless and indiscriminate selling has all the hallmarks […]
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Date: January 21, 2016
Tuesday’s Binary Outcome
On Friday, we finally had the “puke” opening. There was some panic, desperation and despondency. In the “fight or flight” debate, there were more than a few investors taking to the skies! Given the very heightened volatility, Tuesday’s trading should not be quiet. Rather, the stock market should see another large move. Scenario A has the bulls putting up a real stand right from the opening, perhaps an old fashioned “gap and go” snap back rally. On the other end […]
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Date: January 18, 2016
Puke Opening is Here
As the relentless selling pressure in stocks continues, my last few pieces talked about getting closer to at least a trading low, but not quite there yet. Even as stocks bounced back on Thursday, the tune was the same. I was waiting for that really ugly, panic driven opening where stocks saw there largest point decline of the correction. As I type this, the Dow looks to be down 400 points and this certainly qualifies as a “puke” opening. While […]
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Date: January 15, 2016
Stocks Bouncing But No Bottom Yet
I won’t rehash what’s been plastered all over the media. Selling in stocks has been relentless and the worst start to any year ever. It “feels” like the market is collapsing and harkens back to 2008. As I like to repeat from time to time, feel is not real. Yes, the major indices are down upper single digits in 2016, but I would argue that if this decline occurred any other time of the year, it would not be getting […]
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Date: January 14, 2016
January Early Warning for Rest of Year
We now know that the first five days of the year were down which became a popular indicator for the year as a whole by Yale Hirsch of Stock Traders Almanac fame. While waiting for the month of January to conclude, I went back and looked at the first five days of every down year since 1951. Then I looked to see if January as a whole was down. Finally, I found all the times where January’s weakness exceeded the […]
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Date: January 13, 2016
2008 Redux This is Not
2016 is just a week old, yet all I am reading and hearing is that it’s going to be a terrible year for stocks and similar to 2008. 2007 – 2009 was a generational bear market, the likes of which have only been seen during the Great Depression. These types of strong deflationary spirals take decades of mistakes to create and leave investors scarred even longer. In the western world, we have never, ever seen a repeat within 10, 20 […]
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Date: January 12, 2016
Water Needs to Find Its Own Level in China
Last summer I included China’s stock market in a few pieces as it cratered lower and lower. Remember, as I explained, while China may be the second largest economy on earth, they are relatively new to the capitalist system. They have, are and will continue to experience “growing pains” as the powers that be seem to believe they know better when it comes to controls in their financial markets. Over the summer as their market collapsed, the government instituted all […]
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Date: January 7, 2016
Beware of Believing in Santa Claus
The traditional Santa Claus rally of the last five trading days of the year did not materialize. As I have mentioned before, Yale Hirsch of Stock Traders Almanac fame made popular the rhyme, “If Santa Claus should fail to call, bears may come to Broad and Wall”, meaning that bear markets typically follow in the ensuing years where there is no Santa Claus rally. While it all sounds nice and neat, the data do not support that conclusion. In 2014, […]
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Date: January 5, 2016
Three Last Minute Year-End Tips
As Kenny Loggins wrote, “Make no mistake where you are. This is it.” The last day of the last week of the last month of the last quarter of the year. 2015 will soon be in the books and it will go down as a year where the stock market was down a little and the bond market was down more while commodities were down huge. As I sit here finishing up my final blog post and newsletter of the […]
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Date: December 30, 2015
Santa Claus is in the House!
The last week of 2015. I hope you have been enjoying the holidays. The major stock market indices continue to behave as I spelled out over the past few weeks. Santa Claus came right on schedule and the seasonal trend has him taking a break to close the year with some mild strength to begin 2016. While I was very pleased that stocks reversed early last week and have followed through on the gains, we still need to see all […]
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Date: December 29, 2015
Santa Needs to Get a Movin’
Since the Fed wrongly raised interest rates last week, the stock market has done a good job of following the script. First, it rallied sharply from 2pm to the close on the day of the announcement. Then, it saw weakness on Thursday and Friday followed by strength to begin the new and holiday shortened week. While that all looks nice, I did not expect the amount of weakness seen when combining Thursday and Friday. That definitely bothered me regardless of […]
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Date: December 22, 2015
All Signs Point to a Horrifically Wrong Decision by Yellen & the Fed
FINALLY, or YET AGAIN, it’s FOMC statement day. Unlike every meeting since 2007, I do believe the Fed is wrongly going to raise short-term interest rates for the first time since 2006. Since 2008, my thesis has been and continues to be that the Fed should not raise interest rates until the other side of the next recession. This is your “typical” post-financial crisis recovery that’s very uneven. It teases and tantalizes on the upside and frustrates and terrorizes on […]
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Date: December 16, 2015
Third Avenue Travesty
After peaking way back in 2014 and declining ever since, the high yield (junk) bond market has finally made national news over the past week with the very high profile blow up of the Third Avenue Focused Credit Fund (TAFCF). This was not some fly by night little fund or fund family. It’s a small, mainstream mutual fund family and the fund itself had more than $3 billion in assets in 2014. Last week, after massive withdrawals, the fund announced […]
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Date: December 16, 2015
Bye Bye Bernie
I have been watching the various presidential debates and haven’t missed one for the most part. I find them to be sometimes informative and on the entertaining side although the recent democratic one was a bit tortuous in my opinion (more on that later). The democrats have only had one, but I can’t get Bernie Sanders’ voice out of my head when I watch Seinfeld reruns. He sounds exactly like the actor who plays Yankees’ owner George Steinbrenner. I remember […]
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Date: December 11, 2015
