Like an Elevator
Down big. Up big. It’s like riding the elevator at the Empire State Building. Italy’s banking system goes from being on the verge of collapse to all is hunky dory in 36 hours. The past few days looked a little bit like BREXIT almost two years ago. While I did not believe BREXIT was going to be a huge event at the time, I still think that Italy has the potential to be that sub prime mortgage canary in the […]
Read More
Date: May 31, 2018
Italy Definitely Matters. Canary in the Coal Mine?
Stocks were “supposed” to rally on Friday ahead of the long weekend. While they did put in a good performance, they still ended in the red. That adds further weight on the short-term negativity of some of our models when stocks don’t behave as the odds say they should. This morning we woke up to more troubles in Italy. Anyone surprised by this hasn’t been paying attention. In my year-end report to clients as well as in my Fearless Forecast, […]
Read More
Date: May 29, 2018
Double Reversal of the Reversal
On Tuesday, Wednesday and Thursday we saw three separate reversals in the major stock market indices. First, there was a “key” downside reversal after a nice little rally, followed by back to back days of stock selling off early and closing strong. Long time market analyst, Walter Deemer, very aptly replied to one of my tweets that it’s not so much the reversal itself, but the action after those wilder, more emotional days. People love to cherry pick and and […]
Read More
Date: May 25, 2018
“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 […]
Read More
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 […]
Read More
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 […]
Read More
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 […]
Read More
Date: May 16, 2018
Nothing Sexy But Still Higher Prices
Since May 3rd, the path of least resistance has been up in the major stock market indices. That is supposed to continue although I will soon be on the lookout for a short-term pause or minor pullback. With the small cap Russell 2000 leading, there has been little to complain about lately, at least for the bulls. While none of the four key sectors are knocking it out of the park, they all look poised to head higher. Energy has […]
Read More
Date: May 13, 2018
Bull Markets Do NOT End This Way
*NOTE: I began this piece as my regular Friday blog post as a follow up to a tweet I sent last night. The more I wrote, the more I wanted to say. That turned into more of an Analysis 101 piece which I am distributing to everyone. It’s also one very important piece in my canaries in the coal mine which I hope to have out next week. One of my favorite long-term indicators scored an all-time high on Thursday, […]
Read More
Date: May 11, 2018
Stock Market & Economy Yawn as Trump Terminates Iran Deal
I have to laugh when I hear so many pundits surprised that Trump withdrew from the Iran nuclear deal. It was one of his many campaign promises. Most members of his revolving door administration were squarely against the deal’s continuation. What was so surprising? While my interview was 5 minutes, only a few comments made the segment on WTNH (ABC in CT) last night. I don’t think the Iran news will have any economic impact at all. It’s been fairly […]
Read More
Date: May 9, 2018
