“Key” Reversals. Junk Bonds Still Stink
Let’s start with junk bonds. While they don’t really stink, they are not participating at all in the stock rally. As I mention time and time again, that has little value in the short-term and no predictive power. However, it does matter, and sometimes a lot, over the intermediate-term. My fear, well I am really not scared but rather concerned, is that the final peak in high yield bonds has already been seen. If that’s the case, it doesn’t bode […]
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Date: May 23, 2018
Pause Ending?
With news out that Trump Tariff Tantrum has been delayed, stocks around the globe are rallying roughly 1%. That’s the expectation when trading begins for the new week. It will be telling to see if all five major stock market indices can score new highs for the month which would give the bulls more credibility. I would really like to see another index besides the Russell 2000 see all-time highs right now. Additionally, on the far right side of the […]
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Date: May 21, 2018
Small Caps Still Leading But…
The mild pullback/consolidation continues although you wouldn’t know from watching the Russell 2000 small cap index below. This index sits at all-time highs as seen above the dark blue horizontal line as well as breaking higher above the light blue line which has contained price since the early Q1 correction. On the surface things look really good for small caps as they are leading. However, I do think their leadership is close to ending with the other major indices about […]
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Date: May 18, 2018
Pause to Refresh. Transports Looking Juicy
It looks like Monday’s failure by the bulls put in a short-term peak and stocks will either trade sideways for a bit or pullback below Tuesday’s low. There shouldn’t be too much price deterioration. We have some overbought readings in the major indices so if stocks can resist much weakness, that could speak volumes about the next move which should be to new highs. On the key sector front, banks and discretionary are quietly stepping up while semis appear to […]
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Date: May 16, 2018
Stocks on Fire! Not So Much High Yield Bonds
Monday picked up where Friday left off. Strong action in the major indices with the small caps following through from Friday’s burst higher. Even the European indices broke out to new highs. Emerging markets have not and are definitely looking tired. All four key sectors look good with the semis really trying to regain the top spot. High yield bonds, one of my favorite canaries in the coal mine, are the primary fly in the ointment as they cannot seem […]
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Date: December 19, 2017
Bounce Coming But Pullback Still Secure
While the short-term pullback continues, stocks are seesawing back and forth and are “supposed” to bounce here. For the past two trading days, the bears were unable to follow through from Thursday’s decline and fought the bulls to a draw. Unless we are looking at something bigger on the downside than I expect, we should see the bulls step up in a small way. It will be interesting and perhaps telling to see which of the major indices lead and […]
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Date: August 22, 2017
Pullback Remains in Place. Junk May Hold Key.
The short-term pullback I have seemingly written about for weeks and weeks remains in place although I am certainly not taking credit for calling it in a timely fashion. The Dow, S&P 500 and NASDAQ 100 have all pulled back constructively while the S&P 400 and Russell 2000 are uglier. The three stronger indices are just about to kiss their 21 day moving averages, while their weak cousins knifed right through the 21 as well as their 50 day moving […]
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Date: March 9, 2017
Window for Decline Almost Closed
For the past three weeks, our models have been defensive regarding the stock market after the first week’s post-election surge. I often say that when certain conditions are present, a “window of opportunity” opens for a stock market decline. The longer time passes without a decline, the more likely the window will close. Today, the window is starting to close and I imagine that by two weeks from today, it will be fully closed, modest decline or not. The Dow, […]
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Date: December 7, 2016
Seasonals Favor Bulls into Weekend
Today and Friday are well known and widely followed seasonally strong days for stocks. That doesn’t mean we should just blindly buy and hope things work out. Stocks have been almost straight up since the election so you can certainly argue that a lot of fuel has been used up, including the last two days. As I mentioned on Monday, if the stock market was down on Tuesday I would have wanted to be long on Wednesday and Friday. That’s […]
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Date: November 23, 2016
Bulls Not Done
The bulls came back from the weekend in a good mood as stocks are rallying into lunch on Monday. While banks are taking a little breather, commodity-related sectors are leading with energy, metals & mining and materials all doing well along with some of the beaten down Hillary sectors, utilities, staples and telecom. High yield bonds are finally showing some oomph and emerging market countries are bouncing. The NYSE A/D Line is showing decent participation. I won’t rehash all the […]
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Date: November 21, 2016
