Volatility Still Elevated. No All Clear Yet
So Paul, (yes, I am speaking in the annoying third person and I hate it too), it seems like every day there is a dizzying array of news and events. 500 points up, 400 points down, 300 up, 400 down. Employment report. Tariffs. New technology regulations. And earnings season is about to begin. Volatility remains elevated as has been the theme all year. Three times, Dow 23,500 has been visited and all three times buyers stepped in the thwart off […]
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Date: April 8, 2018
Major Reversal Puts Ball in Bulls’ Court
Stocks saw a very large reversal on Wednesday from being down 500 points to closing up more than 200 points. That would have been absolutely textbook if the price lows were below the lowest level of the correction which occurred on Monday or February 9th, depending on which index you look at. Technically, the price behavior has satisfied all that is needed to end the correction and begin an intermediate-term rally. However, I am not 100% convinced just yet. First, […]
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Date: April 5, 2018
Trump Tariff Tantrum & 200 Day Moving Average
We woke up today with more of the Trump Tariff Tantrum. This time, China responded as everyone thought they would, but the markets reacted much worse with the Dow looking to be down 600 points at the open. I am much, much more concerned about where stocks close today rather than where they open. To wrap up this decline, I would either want to see a 1000 point down day or afternoon strength today. As I continue to write, tariffs […]
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Date: April 4, 2018
Stocks are “Supposed” to Bounce
This is going to be a short update as my car has a safety recall and I am late to drop it off. While I was on the look out for a 1000 down day to get the market to the end of the decline and middle of the bottoming process, the bulls jumped when the Dow was down 700+ on Monday and thwarted that attempt. I really wanted to see a full WOOSH lower that ended the day really […]
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Date: April 3, 2018
Bottoming Process Continues with Decreasing Momentum
Last week, I wrote about stocks entering the bottoming process. After a decline of 1100 points in the Dow, there was a possibility that the correction which began on January 26 was ending. The only thing I did not want to see was a large up opening with stocks rallying all day. Well, that’s exactly what happened last Monday. It just prolongs the inevitable. I still believe that there is a good chance of seeing a 1000 point down day, […]
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Date: April 2, 2018
In the Throes of the Bottoming Process
1100 point decline to end the week certainly makes people pay attention. It still feels like yesterday (or late January) when all the talk was about a year long stock market melt up.Tax reform, 700+ regulations killed, GDP accelerating. All paths led higher. Almost every day, Donald Trump celebrated fresh all-time highs and used the stock market as his report card. Oh, the good ole days! As I wrote about last week, I don’t believe it’s about Facebook or Trump’s […]
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Date: March 26, 2018
What Happened to the Stock Market Melt Up?
700+ points of Dow decline on Thursday surely did change sentiment quickly. And while stock market bottoms do occur on Fridays (13% of the time), contrary to popular belief, the final low is unlikely to be today. Earlier this week, I discussed how all three of my offered scenarios were breaking down as they all eventually do, I thought the Dow would go check out 24,200 but likely head all the way down towards 23,000 which is below the lows […]
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Date: March 23, 2018
Scenarios Breaking Down
For the past 6 weeks, I have offered what has now amounted to three plausible scenarios for where stocks are headed over the coming three to four months. While the short-term ups and downs varied, all paths from my perspective ended up at new highs for the major stock market indices. Nothing has changed in this regard and I continue to expect Dow 27,000 by the end of Q2 (June 30). As with almost every single market analog, eventually, they […]
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Date: March 20, 2018
Nasty, Ugly Reversal
Stock market action on Tuesday printed a classic nasty and ugly reversal when looking at the charts. Stocks opened at the highs for the day and closed at their lows. Additionally, the move from high to low completely enveloped the previous day’s activity. While this does look really bad on a chart and people will often say it’s a classic key reversal which ends rallies and bull markets, research doesn’t support that claim. Sure, you can see and have seen […]
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Date: March 14, 2018
2018 Looking A Lot Like 1997
As you know, I have been hanging my hat on two scenarios for the market since early February. I updated those yesterday. While both scenarios still lead to Dow 27,000 by the end of Q2, I searched long and hard for further evidence to support my thesis. I love finding market analogs, but there haven’t been many to what transpired over the past 6 weeks. 1997 seems like the most favorable comparison and when I lined them up, it looked […]
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Date: March 13, 2018
