Another Bad Deal… Iran
We woke up this morning to learn that the big western nations struck a deal with Iran to lift the economic embargo in return for nuclear concessions. In life, I have always tried to avoid rewarding bad behavior. Once you start down that path, it never ends. Just look what happened in this country with the S&L crisis, Orange County, Long-Term Capital and Bear Stearns. Talk about moral hazard! While Lehman Brothers put an end to that, look at how […]
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Date: July 14, 2015
Reboot Greece
Since the latest “crisis” in Greece unfolded in the markets almost two weeks ago, I continued to offer that China was the real problem, but Greece was dominating the headlines. Greece doesn’t really matter in the grand scheme of things, economically or market-wise. And even though they struck an absolutely horrific deal for their country, stocks will rally in the short-term because the uncertainty is lifted. Who in their right mind would agree to more tax hikes, more austerity and […]
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Date: July 13, 2015
Q3 Stock Market Scenarios Unfolding Nicely
Last week after the Dow plunged 350 points and began to bounce, I offered the two most probable scenarios for stocks, both of which included new multi-month lows before any real rally would begin. Stock Market Scenarios for Q3 My conclusion was, “just because we saw extreme readings on Monday doesn’t mean that the ultimate low was seen. I would argue against that. Monday’s snowball day was an important piece, but far from the final piece. Wash out readings like […]
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Date: July 10, 2015
Rip Off the Band-Aid Greece
As the early tally in Greece showed overwhelming support for the NO camp, meaning they wanted to reject more austerity, markets around the globe braced for another round of strong selling. As usual, the pundits got it wrong. Almost every single interview I watched or read had the vote almost a dead heat. “Famed” investor Wilbur Ross laid a huge egg in not only predicting a YES vote, but also positioning his portfolios for it and then trying to rationalize […]
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Date: July 8, 2015
Greece Occupying Headlines But China is Key
Last Monday, as the stock market was in the process of falling 350 points on news out of Greece, I offered that the much more important news was coming from China where the Bank of China cut interest rates in an attempt to spur on the economy and support the stock market. That was barely a footnote in the media. After an extremely volatile week, reminiscent of 2008, and with the Shanghai Index down almost 25% from its peak, the […]
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Date: July 7, 2015
Greece = Opportunity. Stock Market Scenarios for Q3
With Monday’s blog and Street$marts being on the long side, I decided to wait a day to offer commentary on how the markets’ reaction to the impending default by Greece, bank closure, referendum, etc. would impact the new month and quarter. To reiterate an important market tenet of mine which has been around for decades, it’s not what the news is, but how the markets react. We are constantly reminded of that with economic news. Is good news bad news […]
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Date: July 1, 2015
Birds, Salmon and Russell 2000
As the birds fly south for the winter and salmon spawn each fall, it’s time for the annual reconstitution and rebalancing for the Russell 2000 index of small cap companies. The Russell 2000 represents the smallest 2000 companies in the Russell 3000 index. The companies which no longer rank in the 2000 are jettisoned and the new ones are officially added on June 26th. This is all based on the rankings as of May 31st. As this happens only once […]
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Date: June 30, 2015
Grexhaustion… Leave the Euro Already
If you weren’t already exhausted by the constant stream of headlines regarding Greece’s inability to meet their financial obligations, you should be now! After more than five years of negotiations, deals, posturing and extensions, the situation in Greece seems to be coming to a head. I hesitate to use the word “crisis” because unless you’re living there and feeling the depressionary pain, this is really a fringe story. What I find interesting is that we are finally seeing all parties […]
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Date: June 29, 2015
More Nonsense with Greece
Just wondering aloud if a single week can go by without any talk about will Greece or won’t Greece exit from the Euro. They are already in default, and historically, they have been in default more than they have been current, yet they behave as though they are in full control. Maybe they are! You know the old adage that if you owe the bank $100,000 and can’t pay, you have a problem. If you owe the bank $100,000,000, the […]
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Date: June 22, 2015
And the Tea Leaves Were Right
Earlier this week, after weeks and almost months of continuous concerns about the bulls’ ability to step up, I wrote about the short-term tea leaves indicating a rally beginning by Tuesday or Wednesday. The bulls definitely did their part so far this week with the small and mid cap indices scoring all-time highs and the NASDAQ 100 close to fresh highs. The Dow and the S&P 500 have rallied, but are still being dragged up by their counterparts. Software, consumer […]
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Date: June 19, 2015
Fed Statement Day Trend
Once again, the markets have come to the day when the Federal Reserve Open Market Committee (FOMC) releases their statement regarding interest rates and their economic forecast. Today, we also get to hear from Janet Yellen during the post meeting press conference. What to expect? Absolutely nothing on the interest rate front. As I have said before every meeting since rates went to essentially 0%, the Fed is not going to raise rates today. That day will wrongly come sooner […]
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Date: June 17, 2015
Short-Term Tea Leaves Say Bulls About to Step Up
The stock market remains on the defensive as I have written about for some time, not that this is a repeat of 2008 or even 2011. It’s not even your garden variety 10%+ correction. Stocks remain in the range they have been in for most of 2015. From a bullish perspective, it’s a good intermediate-term sign that after the huge run up we have seen, the bears can’t even muster a 10% correction. From the bearish perspective, stocks have stalled […]
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Date: June 16, 2015
Selling the Bounce
Let’s start with my conclusion and then work backwards. Nothing has changed over the past few days, weeks and even months. I still view stocks positively the farther out you go. The short-term remains murky, uncertain, questionable and any other adjective that is less than flat out bullish. One of my chief concerns, sentiment, has begun to reset itself at least to neutral from the overly enthusiastic category. Sentiment surveys have improved as have the put/call ratios in the options […]
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Date: June 10, 2015
Don’t Believe the Negative GDP Print
Short and sweet as I am traveling today. Last Friday, the government reported that Q1 economic output contracted by 0.70%. To the casual observer, that smells awfully close to the accepted definition of recession, two straight quarters of negative GDP growth. Stocks barely reacted on Friday and I attribute the weakness to geopolitical news in Europe. The first quarter has been the worst GDP as far back as the eye can see. The government’s seasonally adjusted data needs to be […]
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Date: June 1, 2015
Bulls Not Ready to Surge Just Yet
In what seems to be the trend for most of 2015, price breakouts above previous high points have largely been rejected. While that’s not to say that the bears have come in and taken control over the intermediate-term, we have seen small pullbacks until the bulls get ready to step up again. Eventually, as I have written about all along, this three or six month trading range will resolve itself to the upside; it just doesn’t look like it’s right […]
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Date: May 21, 2015
American Pharaoh Begins the Week at the Highs
The bulls begin the new week a little higher than this time last week and within striking distance of all-time highs in the Dow, S&P 500 and S&P 400. Not a single thing has changed in my bullish intermediate and long-term outlook. The stock market should continue higher on its way to Dow 20,000 with periodic bouts of weakness to keep everyone honest. As I have been writing about since early 2012, any and all pullbacks should be viewed as […]
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Date: May 18, 2015
Portfolio Impact from Jobs Report
The question now for portfolio managers like myself is, “does one good employment report turn the tide?” Since I already mentioned that I all but dismissed the poor Q1 GDP number and I am not giving much weight to the weak March employment, I do believe that Friday’s report is the start of the next upward swing in our frustrating but positive post financial crisis recovery. With that, the intermediate-term outlook for stocks has brightened for many although unchanged from […]
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Date: May 13, 2015
April Employment Report Turns the Tide
One of my long held beliefs is that it really doesn’t matter what the news is, only how the markets react. In almost 27 years of trading, investing and watching, I have seen it too many where the news is so powerful in one direction, yet the market reaction is the exact opposite. Hence, the terms “buy the rumor, sell the news” or “sell the rumor, buy the news”. And sometimes, the news is as expected, yet markets see a […]
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Date: May 12, 2015
Tug O’ War Continues
Like a seesaw or maybe a pinball machine, the major stock market indices continue to bounce from the low end of the trading range to the upper end and back. Remember, that for the past month or so, I have written about the short-term looking somewhat murky, but the intermediate and long-term remain solid. Market pullbacks come in two forms. The first is that price declines somewhat sharply and quickly, which shakes out some of the weak handed holders. The […]
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Date: May 6, 2015
Apple’s Good Earnings Impacting Market
Earlier this week, Apple released a very solid earnings report beating analysts estimates on the top and bottom line, meaning the company had more revenue and profits than forecast. On the surface that should be a good thing and intuitively, you would think a boon to the stock. Apple opened at fresh all-time highs on Tuesday only to sell off immediately and close in the lower end of its daily range. Data miners have uncovered a solid trend that […]
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Date: April 30, 2015
