Down August AND September Equals HUGE Q4 Rally
Although I have been struggling to find enough stocks behaving constructively in the 9 major sectors to lead the next rally, I still do not see a meaningfully bearish scenario at this point for Q4. Besides the post crash trend, which can be viewed HERE, HERE and HERE, almost every sentiment indicator is showing excessive pessimism, which translates into positive returns going forward this quarter. After the month of August closed down, I shared two separate studies that indicated that […]
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Date: October 7, 2015
More on the Post Crash Pattern… Both Paths are Bullish
The only thing missing from a “perfect” pattern is for the S&P 500 to breach the August lows for up to a few days. I hesitate to use the word “perfect” because it rarely plays out exactly as I expect, but it certainly did so in 2011. Additionally, in both 1987 and 1989 which I partially dismissed, the final lows did not breach the crash lows before the big rally began. As you can see from the chart above, I […]
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Date: October 6, 2015
Post-Crash Behavior Still Following My Scenario
Immediately after the August 24 mini crash, I opined that the bottoming process could begin as early as that very week, which it did. I also wrote extensively and did a fair amount of media discussions on the topic. So far, the major indices are nicely following that scenario which had stocks rallying off the crash low into a September peak and then revisiting that low by the middle of October. Remember the comparisons I offered from 1987, 1989, 1994, […]
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Date: October 5, 2015
Was That It?
At their worst levels on Thursday, the major stock indices were bludgeoned and downright ugly. The Dow was down to 16,000 and could have been cracked open like a coconut today had the bulls not mounted a very strong late day charge. The rally was somewhat impressive and leaves open the question of whether we just saw the revisiting of the August lows I have spoken about on CNBC’s Fast Money and written about here. With stocks looking up more […]
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Date: September 25, 2015
Market Behaving as Expected. Bottom Shortly.
In my last update, I opined that the Fed should not raise rates and that whatever they did, the market would end whatever move it was having and reverse in the other direction. First, I am glad that Yellen & Co. did not raise rates. That time will come, but it wasn’t last week. Second, stocks rallied nicely into the Fed meeting and in the moments after the announcement. However, it was the perfect “buy the rumor, sell the news” […]
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Date: September 22, 2015
Post Crash Behavior Leading to Dow 20,000
The day before Flash Crash II last week, I opined that the bottoming process could begin as early as last week. From my seat, it did. One week removed from the mini crash or crashette and stocks took it hard on the chin again. China was blamed, but that’s only a cover story and coincidence. However, unlike August 24, we did not see another Flash Crash. There was no panic. The selling was fairly orderly, which can be viewed as […]
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Date: September 2, 2015
Three Scenarios for Monday’s Trading
There are three scenarios I see for Monday and the short-term. 1 – Stocks open sharply lower and then spend the morning stabilizing and closing at least okay. From there, a sharp, snapback rally develops for 1-2 weeks before rolling over again to the downside. The final low is seen next month at lower levels. 2 – Stocks open sharply lower and see one or two feeble and failing rallies during the morning before a full-fledged crash in the afternoon. […]
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Date: August 24, 2015
Don the Crash Helmets! It’s Bloody and Ugly Out There!!
By now, everyone knows that the Dow Jones Industrials fell by 1000 points last week, including a 531 point down day to close the week. More selling lies ahead in the short-term. It’s getting ugly. There’s blood in the streets. Sell what you can not what you want. Margin calls are coming. Maximum pain thresholds are being hit for the individual investor. Panic is here! Before I opine on what it means, let’s put it all in perspective. 531 points […]
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Date: August 24, 2015
Bulls Want to Fight
After a clear loss to the bears last week, the bulls closed Friday well off the worst levels of the day and closer to the highs. That price behavior usually leads to some follow through buying the next day. Looking at the five major stock market indices, they look very different, which is not normal. The Dow and the Russell 2000 oddly look the most similar with the S&P 500 and S&P 400 together. The NASDAQ 100 has the most […]
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Date: August 10, 2015
Rolling Out the Red Carpet for the Bears
It’s been a rough week for the bulls with Apple taking it on the chin and the Dow Industrials down every day in addition to the last two days of the previous week. Early indications have the bears heading into the weekend with another victory. I want to go back to what now seems like a very prescient post on July 20 titled Trouble Brewing Beneath the Surface. On that day, all of the major indices were at rally highs […]
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Date: August 7, 2015
