Coal Mine Air Still Healthy… Says the Canaries
With stocks soaring to new highs over the past few weeks, it’s a very appropriate time to see how the canaries are faring and if any have died. Remember, the more “dead” canaries, the more likely the bull market will follow suit. This is very long-term analysis and not helpful for much other than end of bull market warnings. Let’s start with the Dow Industrials below and it’s great to see a clear and decisive all-time high right now, coming […]
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Date: November 17, 2014
Even My Bullish Forecast Wasn’t Bullish Enough
Three weeks ago as the stock market was being labeled as “in collapse”, I wrote about the bottom being formed and offered two scenarios for the market to follow. Of course, both scenarios were generally bullish, each ending at new highs, but the length of time varied. Below you can see that same chart updated with market action over the last three weeks. In short, the stock market responded even more bullishly than my very bullish forecast with all time […]
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Date: November 11, 2014
Dow Theory Trend Change… Again
Last week, I wrote an article explaining how traditional Dow Theory worked, at least the way I learned that it worked. In that piece, Dow Theory confirmed a trend change to the negative side. While describing what transpired to give this warning, I also wrote that my own projections for the Dow were to the 18,000 level and I would be surprised if stocks didn’t see all-time highs. After the Japanese caught the markets off guard with their own shock and […]
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Date: November 3, 2014
One Door Closes Another Opens
On Wednesday, to no one’s surprise, Janet Yellen & Co. ended the Fed’s 5+ year experiment of purchasing assets in the treasury and mortgage backed securities market, also known as quantitative easing (QE) or money printing. I won’t rehash all of the reasons why I continue to believe this is a misguided strategy, but it is. Before the ink was even dry on the statement, the Bank of Japan completely caught the markets off guard last night with another ramp […]
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Date: October 31, 2014
Dow Theory Trend Change
Dow Theory has been around for decades and it’s not something I discuss very often. You can Google it to find newsletters and blogs and opinions on its value. As the stock market gets closer and closer to the final bull market peak, I think it’s something we should watch. Dow Theory works in a couple of ways and I am going to focus on one piece here, primary trend change. Dow Theory Primary Trend Change occurs when BOTH the […]
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Date: October 30, 2014
Goldman Sachs’ Oil Forecasting Prowess
Goldman Sachs is a firm often in the limelight for hiring the best talent on Wall Street, winning the high profile deals, having close ties to the government and paying enormous compensation. It’s also a firm under intense scrutiny and often in the cross hairs. The last time I wrote specifically about one of their market calls was when they “curiously” downgraded the biotech sector in January 2014. You can read that piece here. http://investfortomorrowblog.com/archives/941 This week, Goldman cut their crude […]
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Date: October 28, 2014
Ending a Big Week
As I first laid out last week and then again on Monday, this week was expected to be a big one for the bulls. In real time, I wrote about the likelihood for a low that was then confirmed, making me very happy to have called it as it was happening. (In this business, you get to celebrate so little before the market turns on you!) The only question I had and still have is, “was that THE bottom or […]
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Date: October 24, 2014
Two Market Scenarios for the Quarter
In the last issue of Street$marts, I wrote about stocks being in a “murky” period for the next few weeks. I am going to pat myself on the back and say it has certainly looked “murky” since early October although I wish I had been more aggressive in taking action. The dark clouds have recently dissipated and the sun is starting to pop out. Once the decline began, it looked like the second half of October would see a low and that’s […]
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Date: October 21, 2014
So Far So Good!
Just two ago, I wrote about the stock market “groping” for a bottom and laid out a scenario for that to begin on Wednesday. The beaten down Russell 2000 was the key as it very quietly had been outperforming the market for three days. That behavior is not what you typically see if a crash was unfolding. Our indicators and systems backed up my own thoughts and our equity strategies went to maximum exposure at the close on Wednesday. When […]
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Date: October 17, 2014
Stock Market Groping for a Low
If you woke up this morning, turned on the computer or TV and saw another Texas healthcare worker with Ebola, European markets under siege yet again and our own stock market futures in collapse, you probably did not feel so great. Anxiety? Panic? As the morning progressed and our stock market opened, your saw an immediate mini panic with the Dow down 370. At the same time, the 10 year treasury note’s yield absolutely and totally collapsed under 2%. That […]
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Date: October 15, 2014
Who Turned the Lights Out… Again
Yesterday, I wanted to see what leadership emerged after Wednesday’s big surge and more importantly, I wanted definite confirmation from the plan vanilla high yield (junk) bond mutual funds that the canary wasn’t dying. That was before the open. I have to say that the depth and tenaciousness of Thursday’s decline definitely caught me off guard. While giving back 25% or even 50% of the big rally would not have out of the ordinary, losing all of it certainly was. […]
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Date: October 10, 2014
BOOM! Now High Yield is Key
What a great day in the city on Wednesday! I knew I was okay when Metro North actually ran on time to start the day. I did two segments with the good folks at Yahoo Finance, one discussing the most overused word in investing, “bubble”, and the other on the current state of the bull market. As they are posted I will share the links. I headed to the floor of the NYSE in the afternoon for a quick stint […]
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Date: October 9, 2014
History Says 15% Chance of 8-11% Decline Right Now
Today (Wednesday) I am excited to head to New York City for a day full of media (and a tiny bit of shopping). My first stop is with the good folks at Yahoo Finance to create two or three segments on what’s hot now. I know for sure we will do one on market bubbles which should be controversial and interesting. I imagine there will be one about the bull market or Fed and then one on the hot story […]
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Date: October 8, 2014
Stocks Trying to Keep Bounce Going
The stock market ended last week with a very nice bounce from the lows seen on Thursday and I discussed in the last update. Market internals were fine, but certainly not great, so far. At this point, the most prominent stock market indices saw yet another pullback that couldn’t gather steam once it approached 5%. While very unusual historically, this has been business as usual since mid 2012. The most important things to watch now are how stocks behave as […]
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Date: October 6, 2014
Bears Stepped It Up
For most of September, I discussed the very negative seasonal period that ended on September 30. Remember, poor seasonals with strongly negative short-term trends from the Fed and options expiration usually just provide a headwind or accelerant to a market move already in place. The second half of September was certainly a poor showing for the bulls, which is part of the reason October began so weak. For those who watch the charts, the Dow and S&P 500 visited their […]
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Date: October 2, 2014
Alibaba, Twitter and Facebook Oh My!
“Hot” IPOs like Alibaba, Twitter and Facebook are usually very emotional, much anticipated and huge financial media events. As I have discussed over and over, emotion in investing can have a very detrimental impact on your portfolio! I went back and found similar, much anticipated, “hot” IPOs to show you what transpired over the coming few months. The results should not be surprising. Twitter really bucked the trend over the past few years. While it initially dropped 20% from its […]
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Date: September 24, 2014
Alibaba… No Bubble to Me
With the Fed meeting, press conference and Scotland out of the way, markets turned to Alibaba’s initial public offering (IPO) to close a very busy week last Friday. Looking at possibly a record $20+ billion IPO, the money had to come from somewhere. And judging by tech stocks behavior over the prior week or so, it certainly looked like institutional investors were paring back holdings to pay for Alibaba. The hugely anticipated IPO priced at $68 and promptly opened at […]
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Date: September 23, 2014
Beware of Most Negative Seasonals of the Year
For the past three weeks I have written about the need for a short-term pullback in stocks. I have been and remain positive on the intermediate and long-term view for the stock market. Remember, pullbacks can come by stocks going sideways for a period of time or by price declining enough to entice buyers back in. In the major indices we saw a split pullback with the Dow, S&P 500 and NASDAQ 100 going sideways while the S&P 400 and […]
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Date: September 22, 2014
Textbook Consolidation Ends
Late last month, I wrote a piece concluding that stocks looked a bit tired at all time highs. Nothing terribly damaging, but they were in need of some rest. Routine, normal and healthy pullbacks can come in different forms. The easiest way for stocks to digest is to decline 2-5% fairly quickly, while another way is to see sideways movement with a slightly downward tilt for a period of weeks. The Dow Jones, S&P 500 and Nasdaq 100 all saw […]
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Date: September 19, 2014
Headwinds Abound This Week
Almost all markets finished on a sour note last week and that spilled over to begin the new week. While I have written about stocks needing a short-term breather, I was surprised that treasury bonds could not get a lift as stocks weakened. In fact, both stocks and bonds peaked the same week, but bonds sold off more significantly, something that is unusual. The major stock market indices certainly look like they want at least a little rally, but the […]
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Date: September 16, 2014
