Earnings Are A Problem For The Bears

September 15, 2023|1:46pm

You really have to give the bear camp credit these days. Despite being just plain wrong about the economy, earnings, and the state of the stock market, our furry friends are sticking to their guns. Yes, uber-bear Mike Wilson kinda/sorta did a mea culpa a couple months back. But like the rest of our furry […]

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Stocks Still Sticking To the Script

September 8, 2023|1:18pm

Good morning and Happy Friday. After enjoying a strong run higher from mid-March through the end of July, stocks then took a much deserved and highly anticipated breather. And in following the seasonal script, the major indices proceeded to pull back in August. Although it wasn’t fun, the decline was definitely to be expected. It […]

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Macro Factors Leaning Bullish

June 6, 2023|8:03pm

With the Fed meeting on tap next week (the rate announcement is slated for 2:00 pm Wednesday with the Powell presser to follow) and the crowd split on whether or not the country’s merry band of central bankers will hike rates again or take a pass to get more data, it is fairly easy to […]

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It’s AI or Bust

May 19, 2023|1:46pm

I was asked recently to sum up the action in the stock market as succinctly as possible. As long-time readers are likely aware, brevity is not exactly my strong suit. But after giving it some thought, I did manage to come up with a three-word summary, which also doubles as the title of this week’s […]

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While We Wait for Mr. Powell…

May 2, 2023|3:00pm

Make no mistake about it; this week’s Fed meeting is the primary focal point for market participants. And from my seat, the outcome and/or the “tone” of Jay Powell’s press conference is likely to become the driver of the next near-term trend in both the stock and bond markets. While I could spend my pixels […]

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Arguments For a New Bull Market Improving

April 24, 2023|1:50pm

The stock market appears to have spent the vast majority of the last week or so doing, well, a lot of nothing. In short, after the S&P 500 moved to the high end of the recent trading range, which, as our heroes in horns tell us, is certainly an encouraging sign, traders decided to hit […]

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The Debate

April 17, 2023|1:21pm

On various calls with institutional clients over the past couple of weeks, I have summarized the current state of the market as an ongoing debate between the bulls and bears – playing out daily. I opined that the macro situation boils down to a series of questions. For example: Will the economy experience a hard […]

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What’s It Gonna Be?

March 29, 2023|3:24pm

With the macro backdrop remaining fairly fluid these days, it appears that market players are in search of the appropriate levels – for stocks, bonds, fed funds futures, gold, and just about anything else that might be impacted by a burgeoning crisis. A week ago, traders were positioning for just that – a crisis in […]

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The Question of the Day

March 21, 2023|3:20pm

The question of the day is simple. Are investors dealing with another banking crisis, which poses what is called “systemic” risk (I.E. Risk that threatens the entire banking system) or what my colleague Jeff Pietsch, CFA terms “idiosyncratic” risk – meaning risks that are specific to each entity involved. To be sure, there are some […]

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The Big Question

March 14, 2023|3:38pm

And just like that, the game has changed. Almost completely. Gone is all the fretting about inflation, the Fed’s final few rate hikes, and the corresponding impacts on the economy and earnings. Instead, investors of all shapes and sizes find themselves faced with a banking crisis. To be sure, investors have seen this movie before. […]

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Bostic Give Bulls a Boost

March 6, 2023|3:54pm

Until Thursday afternoon, the path of least resistance for both stock and bond prices appeared to be down. Given the macro narrative, this actually made some sense. After all, with February’s inflation and economic data coming in hotter/better than expected and the Fed pledging to remain “data dependent,” markets had been busy pricing in the […]

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Current Take: Cautiously Optimistic

February 22, 2023|4:28pm

Here we go again. Just when you thought positive economic news was a good thing – because strong data support the soft landing (or better) narrative – traders turned the game on its head. Again. Stocks experienced their worst day of the year yesterday on the back of news that S&P Global’s Flash Services PMI […]

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All About Inflation and Lines in the Sand

February 13, 2023|4:03pm

Good morning and Happy Monday. It is safe to say that most investors are anxiously awaiting the arrival of the monthly update to the Consumer Price Index. Scheduled to be released tomorrow morning, the CPI will provide members of both teams a glimpse into the state of inflation. Although the month-over-month headline number is expected […]

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Seasonal Indicators Say “Buy”

February 6, 2023|2:22pm

It is said that those who ignore history are condemned to repeat it. As such, analysts on Wall Street spend an inordinate amount of time on what are called historical analogs and seasonal patterns in the market. The idea to look back at the past and look for historical tendencies. When the calendar pages flip […]

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Has a New Bull Market Arrived?

January 30, 2023|3:10pm

In last week’s meandering market missive, I opined that, “the next major trend – in either direction – is likely to be driven by the outlook/expectation for the state of the economy”. While I will admit that this isn’t exactly groundbreaking analysis, I continue to believe this is the key to understanding the current big-picture market […]

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Recession? It’s all About the Timing

January 23, 2023|4:46pm

With the exceptions of an ugly day/afternoon here and there, the tenor of the market appears to have improved so far in calendar year 2023. And with both the “Santa Claus/Year-End” and the “First Five Days” indicators positive, investors can’t be blamed for looking on the bright side these days. In reality though, you can […]

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The Most Important Chart of the Year

January 17, 2023|3:34pm

As a new year gets underway, it is always important to be on the lookout for changes in the markets. Examples here include changes to leadership, trend, investor sentiment, momentum, and/or the macro-outlook. One of the important lessons I’ve learned is that changes can happen fast – especially as the calendar resets. So far at […]

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Historical Cycles Disagree With Wall Street

January 10, 2023|4:24pm

In last week’s meandering market missive, I opined that analysts of all shapes and sizes were pretty much singing the same song right now regarding the outlook for the economy, inflation, corporate earnings, and in turn, the stock market. To review, I wrote… The refrain goes something like this. The economy is slowing. The Fed refuses […]

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Everyone Singing the Same Song

January 3, 2023|3:11pm

Good morning and welcome to the first day of a brand-new year. If you are like most folks in this game, you are likely relishing the idea of being done with the nightmare that was 2022 and are ready to hit the reset button. From my seat, the question of the day is how traders […]

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Place Your Bets

December 19, 2022|3:29pm

If there is anything I’ve learned in my 35+ years of managing money for a living it is that markets HATE uncertainty – especially when it comes to the macroeconomic outlook. And I think it is safe to say that the extreme uncertainty surrounding the outlooks for inflation, interest rates, the economy, and earnings that […]

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The Key Questions

December 5, 2022|3:40pm

With the stock market putting up gains for a second consecutive month, the question of the day is if the recent rebound represents the beginning of a new cyclical bull market – or- simply another in a series of oversold bounces during the time of year when stocks typically move higher. Although there are always […]

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Looking Ahead to Better Days?

October 31, 2022|3:56pm

With stocks enjoying a pretty solid rally of late, many investors are likely wondering why the mood has changed at the corner of Broad and Wall. Oh, and of course, if the rally will amount to anything more than a bounce in an ongoing bear market. While we can’t know the answer to the second […]

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The Bottoming Process?

October 25, 2022|1:29pm

Although my market missives tend meander a bit at times, this week I’d like to cut directly to the chase. So here goes. Although the action has been more than a little crazy lately and there are a ton of moving parts, the bottom line is I believe the market just might be in the […]

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Making Sense of the Mayhem

October 9, 2022|2:45pm

Talk about a wild week. Normally I am loathe to recount the happenings in the markets of any calendar period as I find the exercise a bore. But given the rollercoaster ride investors were treated to last week, I think it is important to understand why Ms. Market acted the way she did. Although traders […]

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Things Are Starting to Break

October 2, 2022|2:31pm

Anyone watching the action last week knows that technical breaks are happening in lots of markets. For example, my guess is you are aware that stocks broke to a new lows Friday, with the S&P 500 now back to where it stood in November 2020. And you may also be aware that the yield on […]

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The Problem is Obvious, But…

September 25, 2022|10:09pm

By now, the problem is obvious. Higher inflation for longer than had been expected. Ditto for the Fed’s rate hiking plans. The outlooks for both the economy and earnings are heading in the wrong direction – and fast. In response, so too is the appropriate multiple to apply to those declining earnings. In short, the […]

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A Long Slog?

September 19, 2022|3:36pm

About a month ago – you know, back when stocks were making “higher highs,” new buy signals were flashing, and everybody was thinking that we’d seen the worst of the bear market – I remarked privately to a couple colleagues that while things were going well at the time, my biggest worry was that the […]

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No Pivot For You!

August 29, 2022|1:58pm

Given Friday’s violent move in the stock market, I think it is a good idea to take a step back and review where we’ve been of late. The idea is to try and understand why the market has done what it has done, in the hopes that we can better know what to possibly expect […]

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New Bull Market? Or…

August 22, 2022|1:35pm

The question of the day is if the recent rebound in stocks represents the beginning of a new bull market – or – a run-of-the-mill bear market rally, which tend to occur from time to time during extended bearish cycles. To be sure, there are plenty of talking heads for each team to latch onto […]

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The State of the Markets 8.8.22

August 8, 2022|2:50pm

I am short on time this morning, so I am going to try something a little different this week. As part of my daily market analysis, I keep a running log of all key news/events/happenings in the market. The goal is to stay on top of everything in order to both understand and stay in […]

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GDP Getting Real

August 1, 2022|2:27pm

A great many folks, including a host analysts and financial professionals, seem to believe that the US is currently in recession. They point to last week’s negative GDP print as Exhibit A in their argument, suggesting that two consecutive negative quarters is the very definition of recession. As we’ve discussed here a time or two […]

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Keeping It Out Of The Ditch

July 17, 2022|10:45pm

Don’t look now fans but it’s been a month since the S&P 500 made a fresh new low for this bear market cycle. Yep, that’s right, investors haven’t had the bejeebers scared out of them nor been forced to face the discouraging stats regarding the degree of index declines since June 16th. Mark it on […]

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What Will It Take?

July 11, 2022|3:28pm

Stocks are starting the week on a weak note, basically following the leads from Europe and China (where a shutdown in Macau seems to have ignited COVID fears again). However, it is worth noting on this fine summer morning that the “action” has been improving of late. As in, there weren’t any sudden, violent declines […]

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Some Good News To Consider

June 26, 2022|7:44pm

This year’s drubbing in the stock and bond markets have left investors wondering, when will it end? The consensus among analysts on the subject is that the bear ought to go into hibernation once the market has “visibility” on a number of issues including, the Fed’s terminal point, peak inflation, supply chain problems, and, of […]

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Hope the Seatbelts Work

June 21, 2022|3:02pm

There is an awful lot of talk about a recession these days. And while everyone is talking about the concept, the views on when and/or whether or not the good ‘ol USofA will fall into recession vary widely. For example, on this fine summer Tuesday morning alone, Bloomberg reports that “Elon Musk, Nouriel Roubini and […]

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False Summit

June 13, 2022|3:15pm

In last week’s missive, I asked the question, what else can go wrong? The basic point was that, according to the bull camp, perhaps all the bad news was out and that stocks had already priced in all the bad stuff. Extrapolating on the idea, our Heroes in Horns were arguing that maybe, just maybe, […]

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What Else Can Go Wrong?

June 6, 2022|2:45pm

To be sure, the action in the stock market has been a bit schizophrenic of late. Up one day, down the next, with no follow-through seen in either direction last week. As such, the key question in my mind is, where are we now? From a very short-term perspective, it looks like Wall Street traders […]

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Stocks Out of Touch With Reality?

May 15, 2022|5:26pm

As I have mentioned a time or two hundred over the years, I believe the stock market is… everybody join in now… “a discounting mechanism of future expectations.” So, with the S&P 500 closing down for a sixth consecutive week – something that hasn’t happened since the not-so fun year 2011 – it is safe […]

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The Changing Narrative

May 9, 2022|11:58am

Volatility appears to be the new normal for calendar year 2022. Lest we forget, the new year began with the S&P 500 moving to a fresh all-time high. Something that investors had become accustomed to in 2021. Things were looking good with the economy reopening and GDP growth looking strong. But then it happened. Inflation, […]

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Do We Really Need To W.I.N.?

May 3, 2022|3:36pm

Just about everybody on the planet expects Jay Powell’s Fed to hike the Fed Funds rate by 50 basis points (0.50%) at the conclusion of this week’s FOMC meeting tomorrow. Futures predict a 100% chance of such a move and a more than 90% chance of another 50 bp hike at the next meeting in […]

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Recalibrating On The Fly

April 24, 2022|8:38pm

Well, that was harsh. As of last Tuesday, the market had a pretty good feel to it and a test of the 200-day moving average appeared to be in the works. The following morning, that test occurred right on schedule as the market opened strong. But then it happened. Jay Powell started talking about declaring […]

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Figuring It Out

April 17, 2022|3:53pm

So many issues. So little time. Worry, worry, worry! This pretty much sums up the bear case in the stock market these days. Whether it be inflation, the Fed, Putin’s heinous attack on Ukraine, shortages, supply chain issues, earnings, or economic growth, there seems to be no shortage of things for investors to fret about. […]

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Don’t Fight The Fed?

April 10, 2022|3:12pm

The late, great Marty Zweig, who had a huge influence on my career at a young age, was famous for his approach to managing risk in the stock market. As longtime readers are likely aware, one of his primary rules was, “Don’t fight the Fed.” Zweig, who along with Ned Davis (another constant influence on […]

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A Pair of Pivots

March 26, 2022|8:54pm

The primary purpose of my oftentimes meandering market missive is to identify the primary drivers of the near-term market action. As I’ve stated a time or twenty, I’m of the mind that if I can understand what markets are doing and why, staying opinion agnostic in the process, I feel I should have a decent […]

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Sigh of Relief

March 21, 2022|3:40pm

Time is running short on this lovely Monday morning in La Quinta, CA, so I’m going to keep this brief. Cutting to the chase, after enduring several weeks of intense selling, stocks enjoyed a bounce last week. Deeply oversold conditions combined with some good news, for a change, created an environment for buyers to return. […]

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How Much Is Enough?

March 13, 2022|11:08pm

The current market is being driven by the headlines. More specifically, the stock market is moving to and fro based on any/all headlines about the state of Putin’s unprovoked, unconscionable, indefensible, and completely inhumane invasion of Ukraine. Yet, as we discussed last week, there is more going on underneath the surface here than just Putin’s […]

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Blame It On Putin?

March 5, 2022|8:19pm

It would be easy blame the recent volatile (or, shall I say, violent) price action in both the stock and bond markets on Putin’s war. On the topic, I’m of the mind that what is happening in Eastern Europe is almost unfathomable in this day and age. A country being attacked on all sides. Tanks […]

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Happy Twosday

February 22, 2022|4:08pm

Good morning, and Happy “Twosday.” As in 2/22/22, which is not only a palindrome because it reads the same forward as backwards, but today’s date also consists of all the same digits. The ultimate freakiness for such dates occurs at 2:22 am and pm, so brace yourself for that this afternoon. Oh, and according to […]

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Working Through The Issues

February 14, 2022|3:15pm

Make no mistake about it; there is no shortage of issues to work through in this market. In short, this is what corrective phases are all about – dealing with the “new normal” when things change. Remember, the stock market is a discounting mechanism of future expectations. And I think we can all agree that […]

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Are We Having Fun Yet?

February 7, 2022|4:32pm

It’s been a very busy start to the new year and there are a great many pieces to the puzzle that make up this market. While I am short on time this morning, let’s see if we can’t run through the host of issues that investors are attempting to deal with at the present time. […]

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Two Thoughts Before You Panic

January 24, 2022|3:54pm

Unless you’ve been living in a cave, you are likely aware that markets are in the midst of a rather violent “reset” as traders/investors reprice things for the changing environment in fast fashion. To be sure, Friday’s option expiry and corresponding record day for options trading, as well as the obvious high-speed trading algo moves […]

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Rethinking The Outlook For…

January 18, 2022|4:50pm

From my seat, the key driver to the current action in the stock market remains the spike in bond yields. This morning’s early dance to the downside represents an exclamation point on this concept. In short, yields are breaking out to new highs for the current cycle, and stocks are following the direction of bond […]

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Higher, Sooner

January 10, 2022|4:37pm

One need look no further than the bond market to understand the current correction happening in the major stock indices. As is often the case, traders appeared to flip the switch the moment the calendar turned to 2022. Gone is the steady march higher based on earnings expectations. Gone is the upbeat view of GDP […]

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Market Getting Moody

December 20, 2021|4:17pm

Traders appear to have returned to a risk-off mode to start the holiday-shortened week. The drivers of the move are fairly obvious as Senator Manchin’s announcement that he won’t support the Biden “Build Back Better” plan and the bad news surrounding Omicron are causing a rethink of the previously optimistic economic view going forward. A […]

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Weathermen Were Invented To…

December 13, 2021|4:27pm

On Friday, we learned that inflation, as defined by the CPI, aka the Consumer Price Index (which, for the record is not the Fed’s preferred inflationary measure), rose 6.8% over the past twelve months. This was higher than expected as well as the highest reading since… wait for it… June, 1982. Juicing the CPI number […]

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Santa Is Being Tested

December 5, 2021|4:49pm

While there is still time for the traditional Santa Claus rally to begin, the current correction in stocks, which so far at least falls into the “garden variety” category, goes against the positive market vibe typically seen at this time of year. It would be easy to say that the recent volatility is being driven […]

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Learning A New Letter

November 29, 2021|2:29pm

Longtime readers know that the primary purpose of my oftentimes meandering market missive is to identify the primary drivers of the market action. The idea is that if you know what is driving prices on a daily/weekly basis then you have a decent shot at staying in tune with primary trends. One additional caveat before […]

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Market Model Update: 11.22.21

November 20, 2021|4:36pm

We are on the road heading back home to Colorado this morning, so I’m going to keep this brief. The key focus in the markets has returned to the spread of COVID as new lockdowns have been announced in places like Austria and Germany. With cases on the rise again here in the U.S., investors […]

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Market Model Update: 11.15.21

November 15, 2021|3:42pm

With winter starting to find its way to Colorado, my wife and I decided to head to the desert to enjoy another couple weeks of summer weather. As such, I’m going to let the indicators do the talking this week and next. So, let’s get the week started with a review of the “state of […]

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Reasons For The Rally

November 6, 2021|6:38pm

That giant hissing sound you may hear at the corner of Broad and Wall these days is the air escaping the bear camp’s balloon. Cutting to the chase, the bulls now look to be in stampede mode and have been trampling their opponents on a daily basis. While everybody knows that the current joyride to […]

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Looking On The Bright Side

October 31, 2021|3:01pm

The key data points the markets received were mixed last week on both the economic and earnings fronts. For example, while Consumer Confidence was up, the first read of Q3 GDP was weaker than expected. And while the likes of Amazon (AMZN), Starbucks (SBUX), and Apple (AAPL) reports disappointed, the earnings season as a whole […]

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All About The Expectations

October 24, 2021|3:38pm

The S&P 500 closed out the week just off fresh all-time highs. But, to many investors, the rally is definitely a head-scratcher. So, if you find yourself wondering how stocks can be correcting lower one minute and then back at all-time highs the next, here’s my quick take on the situation. Despite increasing talk about […]

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Market Model Review: 10.18.21

October 18, 2021|2:36pm

The onset of earnings season appears to have energized the bulls as the S&P 500 finished the week closer to all-time highs than the recent lows. To be sure, the major indices remain entrenched in a trading range. But with some good news on the economic front (Core PPI was reported below consensus and retail […]

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Looking Ahead: The Correction Will End When…

October 13, 2021|1:56pm

It is said that stock market corrections are only “normal and healthy” until you are in the middle of one. The problem is it can be tough to see the bright side of the macro picture when volatility begins spiking, prices start to crater (and then recover, and then crater again), and all kinds of […]

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Market Model Review 10.11.21

October 11, 2021|2:06pm

As a reminder I’ve decided to make an adjustment to the publishing schedule of my blog/oftentimes meandering market missive. Going forward, the plan is to publish a “Model Review” report on Monday mornings. This will be the same group of models that you have come to know over the years. The idea is to start […]

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Two Charts Explain The Action

September 28, 2021|3:16pm

Here we go again. Apparently the fast money traders and their computers have decided that another fast-moving, violent rotation in the stock market is needed here. So, it’s everybody out of the pool in tech in favor of players going all-in on the reopening/value stocks. Got it. To be sure, we’ve seen this movie before. […]

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Market Model Review and Publishing Update

September 26, 2021|3:37pm

Greetings and Happy Sunday! I am writing to let you know that I’ve decided to make an adjustment to the publishing schedule of my blog/oftentimes meandering market missive. Going forward, I plan to publish a “Model Review” report on Monday mornings. This will be the same group of models that you have come to know […]

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The State of the Market (In Two Bullet Points)

September 13, 2021|3:34pm

I was recently tasked with providing a summary of the current market environment in, wait for it, two bullet points. As long-time readers of my oftentimes meandering market missive will likely agree, brevity isn’t exactly my strong suit. But, I decided to give it a try by accepting the challenge. After spending a good thirty […]

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Threading The Needle

August 30, 2021|2:47pm

All eyes were on Jackson Hole last week. Well actually, all eyes were on their computer screens as Fed Chair Jerome Powell gave his much anticipated speech virtually at the Kansas City Fed conference, which is usually held in Jackson Hole. In short, investors of all shapes and sizes wanted to know whether or not […]

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Delta Disruption?

August 23, 2021|2:39pm

Although stocks rallied to end the week and my screens are flashing a lot of green again this morning, it appears that the relentless rally that began in March (or some might argue, November 2020) has stalled a bit. To be sure, this isn’t the first time the bulls have taken a break during this […]

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Stocks Ignoring Consumer Angst

August 16, 2021|3:15pm

While surprising to some (mostly those dressed in their best bear garb), the stock market continues to work its way higher. Appearing to be climbing the proverbial “wall of worry,” the S&P 500 just keeps on keepin’ on – to the tune of record high closes, that is. In case you’ve been living in a […]

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Will Stocks Soon Experience Indigestion?

August 9, 2021|2:32pm

I remained in vacation mode over the weekend and tried my best to stay away from the computers. And since I’m now attempting to dig out upon re-entry, I’m going to let the market models do most of the talking this morning. In brief, I believe the stock market remains in what I’ll call “digestion” […]

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Don’t Look Now But Valuations Are Improving

August 2, 2021|3:44pm

My wife and I are supposed to be vacationing in England this week and next. But since COVID’s Delta Variant (and the U.S. State Department) had other plans, my wife and are instead “staycationing” via a couple short trips. While the mountains of Colorado are very different from the Lake District of England and we […]

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Rocky Road Ahead?

July 26, 2021|1:56pm

From my seat, the key driver to the stock market game appears to be the outlook for growth. As in what the growth rates for both GDP and corporate earnings will be once we get beyond comparisons to the economic shutdown phase. As I wrote last time, growth is likely peaking due to the fact […]

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Is ‘Peak Everything’ A Problem?

July 19, 2021|12:21pm

Despite surprisingly good data on Retail Sales, stocks of all styles, sizes, and shapes took a hit on Friday. Semis, banks, smallcaps, midcaps, and large caps – all down. Value – down. Cyclicals – down. Growth – also down. Save the traditional risk-off sectors such as healthcare, staples, and utilities, there was nowhere to hide. […]

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Bulls (Still) Deserve Benefit of Doubt

July 12, 2021|1:04pm

I was recently asked to provide a quick answer to the question “where are we now?” as far as the markets are concerned. While “quick answers” are not usually part of my repertoire, I decided to give it a shot. Cutting to the chase, I believe the stock market is currently in the process reconciling […]

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Why I’m Not Worried About Valuations

July 6, 2021|2:07pm

One of the bear camp’s main arguments is that stocks should be moving down instead of up because of high valuations. Our furry friends suggest that with traditional valuation metrics (Price-to-earnings/dividends/book value/sales, etc.) in the stratosphere, stocks simply have no upside. Then when you mix in the Delta variant spreading rapidly around the world, inflation […]

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The Key to the Second Half Will Be…

June 28, 2021|1:15pm

As the second quarter of 2021 winds to a close, the S&P 500 finds itself at all-time highs. To many, the new heights the venerable large-cap index has recently scaled is more than a little bewildering. After all, wasn’t the stock market in the throes of a corrective phase just a week ago? Didn’t the […]

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What’s Up With Bond Yields?

June 21, 2021|1:40pm

I am finishing up a long weekend visit with family in Santa Fe this morning, so I’m going to keep today’s missive short and sweet. My current take is that markets remain in a consolidation mode and are now in the process of digesting/adjusting to the new info from last week’s Fed meeting, which was […]

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About That Inflation Problem

June 14, 2021|1:34pm

For those of you keeping score at home, it was the inflation data that dominated the stock market game last week. While the numbers were eye-popping, the market reaction was not. And the narrative around the subject appears to be evenly split between the two teams on the field. In one dugout, the argument is […]

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What’s Next?

June 1, 2021|2:52pm

Stocks didn’t make much progress again last week and appear to remain trapped in a consolidation phase. While the S&P 500 did manage to eke out a gain, none of the major indices were able to break out of their respective trading ranges. The sideways action seems to be driven by the conflicting themes in […]

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New Information

May 24, 2021|2:38pm

Last week, we looked at three key issues that the stock market seemed to be struggling with: (1) The possibility of the Fed “tapering” their bond-buying program earlier than expected, (2) the potential for inflation to become ingrained (aka non-transitory), and (3) the unavoidable slowdown in economic/earnings growth that will be coming down the pike […]

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Three Issues Markets Are Working Through

May 17, 2021|2:49pm

The DJIA and S&P 500 have been moving sideways for much of the past month, while the consolidation action in small-caps and the NASDAQ 100 has been going on even longer. Concerns over inflation, and in turn, the Fed’s response – as in how soon Powell & Co would begin “tapering” their bond-buying program – […]

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A Chart That Makes Me Say, Wow!

May 10, 2021|3:39pm

While almost everyone is still talking about Friday’s jobs report and whether or not inflation is here to stay, I’d like to use my pixels to talk about something else on this cold and rainy/snowy Monday morning in Colorado. You see, when doing my review of news, charts, and models, over the weekend, one thing […]

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Is Sideways The New Down?

April 26, 2021|2:36pm

Stocks moved largely sideways last week in response to what appears to be conflicting narratives. But then again, given the overbought nature of the market and the overexuberant levels of sentiment, sideways beats the alternative. This is not to say that the bears haven’t made an effort recently. No, the dueling negatives of Biden’s proposal […]

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Drivers and Models Remain Constructive

April 19, 2021|2:54pm

I’m on the road, so I’ll be keeping my thoughts on the market brief for the next two weeks. From my seat, the key drivers to the current upward trend in the stock market include the expectations for the economy to “boom” in the coming quarters, consumer spending, the anticipated infrastructure bill (which is expected […]

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A Goldilocks Moment?

April 12, 2021|2:36pm

The State of the Market Jamie Dimon attracted a lot of attention last week with his summary of the current economic/market environment. In his highly anticipated annual shareholder letter, the JPMorgan Chase (JPM) CEO wrote that we are looking at a “Goldilocks moment” and that “the U.S. economy will likely boom.” Talk about cutting to […]

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All Good News, But…

April 5, 2021|2:33pm

The State of the Market Although the exchanges were shut on Friday, yet another important economic indicator came in well above expectations. In case you were otherwise occupied, it is worth noting that nonfarm payrolls accelerated in March by 916,000, which was well above the consensus estimate of 675,000. In addition, the prior two months […]

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Backdrop Remains Constructive For Bulls

March 15, 2021|3:25pm

The State of the Market Long-time readers know that the primary purpose of my oftentimes meandering market missive is to identify the drivers of the current market environment. And since I spent a fair part of the weekend dodging blizzards on our way to Palm Desert, CA, I’m going to stick to that plan on […]

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Is Good News Good For Stocks or Bad?

March 8, 2021|3:08pm

The State of the Market From my seat, the question of the day is if good economic data is good for the stock market, or bad? Cutting to the chase, the answer appears to be, well, it depends on the day. When Good News Is Good To review, there are times when good economic data […]

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An Interest(ing) Development

March 1, 2021|4:34pm

The State of the Market Midway through February, things were looking good as all-time record highs were recorded by the major indices and the YTD gain for the S&P 500 was approaching +5%. But then it happened. On 16-Feb all heck broke loose in the bond market as the yield on the 10-year Treasury Note […]

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Should We Trust The Thrust (Again)?

February 22, 2021|4:00pm

The State of the Market As a rules-guided money manager, I scan hundreds of indicators each week. I look at market fundamentals such as monetary conditions, earnings, economic data, and inflation expectations. In addition, I look at a myriad of technical indicators as well as “external” indicators such as investor sentiment and valuations. I combine […]

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The Mother’s Milk of Bull Markets

February 16, 2021|3:11pm

The State of the Market It is said that earnings are the mother’s milk of bull markets. This certainly seems to make sense as it is easy to argue that expectations for higher earnings create an environment for rising stock prices. And don’t look now fans, but earnings expectations are rising. Yes, it is true […]

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What Do The Cycles Say About 2021?

February 7, 2021|6:43pm

The State of the Market Long-time readers know that I’m a fan of historical market cycles. As the saying goes, history doesn’t repeat exactly, but it often rhymes. And over the years, I’ve found this tends to the case in the stock market, more often than not. To be clear, I am not suggesting that […]

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Is The Reddit Rebellion Here To Stay?

February 1, 2021|4:15pm

The State of the Market It appears that all anyone wants to talk about these days is “Gamestonk!” And frankly, I can’t blame them. When a stock soars more 16 times in a matter of 12 trading days, it certainly gets your attention! For those of you keeping score at home, Gamestock (GME) closed at […]

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Should We Be Worried About Valuations?

January 25, 2021|3:25pm

The State of the Market If you want to start an argument about the state of the stock market, the topic of valuations is usually a pretty good place to start. And to be sure, the topic is fairly complex. For example, valuation levels morph over time. What was extremely overvalued from 1925 through 1985 […]

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There is Change Afoot in the New Year

January 19, 2021|3:11pm

The State of the Market As we venture forth into the “brave new world” that is 2021 (hat tip to Jeff Pietsch, CFA), it is common for investors of all shapes and sizes to assume that the markets will continue to act in a manner similar to what they had been as the prior calendar […]

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Still Looking Ahead, But…

January 4, 2021|2:03pm

The State of the Market To be sure, stocks of almost all sizes, colors and shapes have been looking ahead to better days recently. Days when the COVID vaccination process has been completed. Days when social distancing is a distant memory. Days when you don’t have to make sure you’ve got several masks stashed in […]

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Happy Holidays And This Is What Makes A Market

December 16, 2020|4:07pm

The State of the Market Stop me if you’ve heard this one before. Stocks have been rallying lately on word that Mitch McConnell’s gang isn’t planning on heading home for the holidays without a stimulus deal. Well, that and the fact that the FDA is about to approve a second COVID vaccine for emergency use. […]

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Just For Fun: 2021 Stock Market Projection

December 14, 2020|3:56pm

The State of the Market Well, it’s that time of year again. The time when just about every market analyst on the planet peers into their crystal ball to conjure up a prognostication about what will happen to the market in the coming year. To be sure, I don’t employ predictions, outlooks, opinions, or gut […]

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Stopping On The Stairs, Or?

December 11, 2020|4:07pm

The State of the Market From my perch, the current state of the market is a good news/bad news situation. On the good news side of the ledger, there is the market’s uptrend, favorable seasonality, the fact that end-of-year window dressing is a thing, and a little something called TINA (There Is No Alternative). I […]

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Now Playing: The Slow Grind

December 9, 2020|4:20pm

The State of the Market For the past two weeks or so, the stock market (as defined by the S&P 500) has been grinding higher on a daily basis. Even when there is disappointing data on the economy, stocks find a way to advance by the time the closing bell rings – just a little. […]

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Are P/E’s A Problem?

December 7, 2020|4:42pm

The State of the Market There is nothing terribly new to report in terms of the current stock market drivers. Traders appear to remain focused on the state of the COVID pandemic and the economic recovery, as well as the potential for additional stimulus out of Washington D.C. In addition, we should note that stocks […]

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The Good News Is…

December 2, 2020|3:02pm

The State of the Market First the good news. Using history as a guide, it looks like the major indices should finish what has been a crazy calendar year in fine fashion. According to data from Fundstrat, when the S&P 500 is up between 10% and 15% between January and November (the S&P 500 sported […]

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The Reasons For The Rally

December 1, 2020|4:07pm

The State of the Market To review, the overriding purpose of my oftentimes meandering morning market missive is to identify the primary drivers of the market action. As I’ve stated a time or two, my thinking is that if I can understand why Ms. Market is doing what she’s doing on a day-to-day basis, I […]

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Time To Take A Break?

November 30, 2020|4:32pm

The State of the Market Stocks have danced merrily higher throughout November as traders have celebrated the idea that highly effective vaccines look to be just a few months away. Cutting to the chase, this means that investors have ignored the bad news about the surge in COVID cases, hospitalizations, and deaths, and instead have […]

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A November to Remember

November 24, 2020|3:44pm

The State of the Market A November to remember is showing no signs of letting up in the early going Tuesday. Already the best month in history save October 1987, the month’s impressive returns look to expand further today. For those of you keeping score at home, the S&P 500 sports a gain of 6.4% […]

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The Market’s Dilemma

November 23, 2020|4:45pm

The State of the Market Another Monday. Another positive vaccine headline… This is a trend that investors could get used to! For the third straight week, investors woke up Monday morning to encouraging news. This week, it’s the Brits (the Oxford-AstraZeneca partnership) coming through with a highly effective vaccine. Although these results were a little […]

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A Good Overbought Condition? Or…

November 18, 2020|4:10pm

The State of the Market Long-time readers know that there are times when I believe there is a message to be gleaned from the intraday market action. To be sure, this is not the case every single day the stock market is open. Many times, the action should be viewed as simply a continuation of […]

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The Long Road Narrative

November 17, 2020|4:12pm

The State of the Market I know what you’re thinking. If the stock market is looking ahead to better days, why are the stocks falling this morning? From my seat, there appear to be three driving forces on this fine Tuesday morning. First, and perhaps most important, is the report on retail sales. But before […]

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All About The Vaccine (Today)

November 16, 2020|4:29pm

The State of the Market When I began writing back my oftentimes meandering morning market missive (back in 1998), the original purpose was to identify the primary driving forces of the stock market on a daily basis. The thinking was if I knew what was driving the market from a short-term perspective, I wasn’t likely […]

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Sigh Of Relief

November 9, 2020|3:21pm

The State of the Market The market-jolting news this morning isn’t about the election results. There is no update on lawsuits or vote counts. No news on the state of the “blue wave.” No, on this fine Monday morning, the big news, the news that is pushing DJIA futures higher by more than 1,600 points, […]

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Stocks May Not Care Who Wins The White House

November 4, 2020|4:19pm

The State of the Market: Executive Summary If you are like me, you were probably checking on the stock market futures in the wee hours of Tuesday night/Wednesday morning. If you are also like me, you may have been surprised initially to see the NDX futures popping 3% higher. And if you are like me, […]

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Do Stocks Care About The Election?

November 3, 2020|4:38pm

The State of the Market: Executive Summary One week ago, uncertainty reigned supreme as traders fretted over earnings, COVID, the economy, and of course, the election. After what so far qualifies as a garden-variety correction, which has seen the S&P fall about 7% from its recent high, stocks have turned around in the early going […]

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The Jitters Are Justified

November 2, 2020|4:49pm

The State of the Market: Executive Summary Another Monday. Another 1% move. I guess that’s just the way the game is being played right now. According to Barron’s, the S&P 500 has moved at least 1% in either direction every Monday since the end of August. Good to start each week with a little volatility, […]

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Is It Time to Return to the COVID Winners?

October 28, 2020|3:02pm

The State of the Market: Executive Summary Well, so much for that bullish cup-with-a-handle formation that appeared to be developing on the charts. As I had opined earlier in the week, if the S&P broke above the “handle” of the formation, a new uptrend had a chance. But the flipside was if the recent low […]

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Three Negatives and One Ginormous Positive

October 27, 2020|3:50pm

The State of the Market: Executive Summary Three negatives and one ginormous positive. From my seat, this defines the current stock market environment. The negatives can more accurately be described as uncertainties and all are well worn: (1) The breathtaking surge in coronavirus cases, (2) the election, and (3) the state of/outlook for economic recovery. […]

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Do Nothing, Absolutely Nothing, Until…

October 26, 2020|2:55pm

The State of the Market: Executive Summary Stocks are down again in the early going Monday as a new record high in daily coronavirus cases (as well as a new high for the 7-day average of new cases) here at home and in many places in Europe has caused traders to fear another phase of […]

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The Three Keys To This Market

October 23, 2020|2:46pm

The State of the Market: Executive Summary From my perch, there are three factors driving stock prices to-and-fro these days. First, there is the state of the on-again-off-again stimulus talks, which appear to be a modest positive again this morning. Next, there is the state of the coronavirus pandemic, which is clearly not going in […]

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A Healthy Dose of Patience is Required

October 21, 2020|3:26pm

Executive Summary: The song remains the same again this morning as the stock market indices continue to be pushed and pulled by the status of stimulus talks. While past and present Fed officials continue to pound the table publicly about the need for additional fiscal stimulus (this time, more targeted, of course), the reality of […]

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What We’re Watching In The Digestion Phase

October 20, 2020|3:37pm

Executive Summary: From my seat, the action continues to be driven by the prospects for additional stimulus. Good news on the stimulus talks produces rallies while disappointment leads to intraday selling. From a shorter-term perspective, stocks are struggling due to the lack of a deal between the White House and Congress. As such, the pullback […]

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Hard To Argue With Bulls Here

October 19, 2020|3:39pm

Executive Summary: From my seat, the state of the market depends largely on the time frame lens one is viewing the market through. Looking at the action from a shorter-term perspective, volatility remains high due likely to the uncertainty over the fate of additional stimulus and the election. Shorter-term, the market appears to want more […]

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Understanding The Current Market Logic

October 16, 2020|2:41pm

Given the state of the COVID headlines, the ongoing fighting over additional economic stimulus, the prospect of higher taxes next year, and the potential for a contested election, one couldn’t be blamed for a less than optimistic outlook toward the stock market. However, “market logic” isn’t always completely logical. And sometimes, as the late Joe […]

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All About The Stimulus

October 7, 2020|2:57pm

Executive Summary: I’m often asked why I keep a 1-minute chart of the S&P 500 on my screen at all times. Since I don’t trade on a short-term basis, it can be argued that the minute-to-minute movement of the market should be ignored. However, by watching the intraday action closely, the drivers of the market […]

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Bulls Not Out Of The Woods Yet

October 6, 2020|2:55pm

Executive Summary: Last week, I opined that the key to the near-term action was the battle that looked to be raging over the 50-day moving average. While I haven’t placed much emphasis on the 50- and/or 200-day moving averages in decades, it appears that the press and a great many algos do. As such, I […]

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Keep Those Seatbelts Fastened

October 5, 2020|3:08pm

Executive Summary: The current narrative in the stock market appears to be that with the President and a bunch of WH staffers/Senators having contracted COVID, the chances of a stimulus bill have improved over the last few days. In response, stocks have rallied on the hopes that a deal can get done before the election […]

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Headline Risk Returns

October 2, 2020|3:14pm

Before we get to our weekly review of the stock market’s fundamental backdrop, there are two important news items to take in – both of which can be viewed from a macro/fundamental lens. First there is the headline that the President and First Lady both have tested positive for Coronavirus. Although the word out of […]

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Bulls Are On Their Own

September 30, 2020|2:43pm

Executive Summary: From my seat, the primary driving factors behind the stock market action continue to be (a) the state of the economic recovery, (b) the outlook for additional stimulus, and (c) the outlook on the COVID crisis. On the latter subject, the key seems to be the question of when we can return to […]

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The Battle For Control Is On

September 29, 2020|2:48pm

Executive Summary: From my seat, the key to the action on the chart of the S&P 500 here is the battle for the 50-day moving average. To review, the bulls were able to make a stop at the 3225 zone on a closing basis. This was important because it kept the pullback from reaching the […]

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Markets Like The Stimulus Talk

September 28, 2020|3:40pm

Executive Summary: Although September has lived up to the historical script as being a weak month for stock prices, the mood on Wall Street appears to be improving a bit to start the week. From my seat, the more upbeat view on the stock market can be tied directly to the idea that a stimulus […]

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Looking For Clues To Next Move

September 23, 2020|4:13pm

After the bulls were able to produce a “good overbought” condition that lasted two full months on the back of the reopening trade and an improving economy, the bears finally found a way to get up off the mat and push the market into an oversold condition – for the first time since late March. […]

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Coloring Outside The Lines

September 22, 2020|3:36pm

Executive Summary: In last week’s technical review, I opined that (a) there were clear lines in the sand on the charts of the major indices, (b) any movement in between those lines could be viewed as “noise,” and (c) a break above or below the key support/resistance was the key to the next move. Fast […]

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The Correction Continues

September 21, 2020|3:48pm

Executive Summary: Stocks find themselves in a negative state again this morning as the headlines are all bad. There are new fears about an economic shutdown in the UK, concerns about the startling rise in new COVID cases, the global banking scandal, and worries about additional stimulus here at home due to the political repercussions […]

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Fundamentals Supportive But Watching Support Zones Closely

September 18, 2020|2:15pm

Before we get to our weekly review of market fundamentals, I thought it would be a good idea to check in on the state of the current pullback happening in the stock market. Now in its 11th day, the current pullback in stocks continues to look like a typical, garden-variety correction (well, to me, anyway). […]

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More Art Than Science

September 17, 2020|3:05pm

Executive Summary: As I have mentioned a time or two, “early warning” or mean reversion work tends to be more art than science. The main problem is that strong trends will reach an “extreme” overbought/sold reading and then stay there for some time. As such, it is important to identify if the current market is […]

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The Lines In The Sand Are Clear

September 16, 2020|3:16pm

Executive Summary: The good news is the bulls have been able to hold the line at key support levels (think 50-day moving averages) across the board on the major stock market indices. The bad news is the recent rebound hasn’t reversed the trend or moved the bulls completely out of harm’s way. As such, my […]

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Bulls Deserve Benefit of Doubt

September 14, 2020|3:14pm

Executive Summary: There are times when it can be difficult to make sense of the contrasting messages from market models and the price action playing out on your screens. For me, it is to understand/remember the time frame you are looking at. Obviously, if you are looking at a daily chart of a stock or […]

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Thoughts On The Correction, Fundamentals, and Valuations

September 11, 2020|2:28pm

Before we get to our weekly review of market fundamentals, let’s look at the state of the current pullback happening in the stock market. After a 3-day pummeling of the market leaders that appeared to be triggered by the combination of extreme overbought conditions, excessive speculation, exuberant optimism, and some options/vol trades unwinding, traders got […]

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My Base Case

September 10, 2020|2:52pm

Executive Summary: One week ago, investors fretted about keeping up as the stock market winners continued to march higher on a daily basis. But as the saying goes, trees don’t grow to the sky and our Early Warning board gave us ample time to recognize that the “table had been set” for some countertrend action.I […]

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Are The Bears Back In The Game?

September 9, 2020|2:36pm

Executive Summary: After the rather ridiculous run higher in July and August, during which time we saw some truly ridiculous moves in names like Tesla (TSLA) and AAPL on the back of stock split announcements (which, of course, mean N-O-T-H-I-N-G), the bears finally managed to get up off the mat and get back into the […]

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Corrective Action Isn’t Surprising

September 8, 2020|3:35pm

Executive Summary: Last week, I questioned if the bull case had become a little “too easy” and, in turn, a bit too popular. The implication was that the recent joyride to the upside had become more than a little overdone. Cue some options unwinding, some profit-taking, and some forced selling, and voila, a correction/pullback/consolidation/pause ensued. […]

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You Knew It Was Coming, Right?

September 4, 2020|3:28pm

Before we get to the state of the market fundamentals, I figure it is probably a good idea to address the current violent selloff happening in the stock market. The fact that the market suddenly fell, without notice, and on no news, should not come as ANY surprise to readers of this oftentimes meandering morning […]

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Of #FOMO and #OnHold

September 2, 2020|3:10pm

Executive Summary: Stocks remain overbought, sentiment remains at extreme levels, and IMO, complacency has set in. And yet, the S&P 500 and NASDAQ indices continue to march higher on a daily basis. As such, the bears are sure to be asking, how can this be? From my seat, the answer is simple. As we’ve been […]

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The Trend Is Your Friend, If…

September 1, 2020|2:49pm

Executive Summary: After the best return for the month of August since 1984 (+7.0% for S&P 500 index and +7.19% with dividends reinvested) it appears that the trend is indeed an investors best friend here. And while it’s been a little bumpy, the venerable chip index sports a gain of +8.3% year-to-date. However, it is […]

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Is The Bull Argument Too Easy These Days?

August 31, 2020|3:37pm

As a reminder, the market’s primary cycles generally do not change often. However, I still like to start each week with a clear understanding of what type of market we are dealing with. For me, a quick glance at the color of the Primary Cycle board and the weekly/monthly S&P graphs below tells me an […]

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Two “Game Changers” Improve Outlook

August 28, 2020|3:03pm

Executive Summary: The combination of Abbott’s new rapid COVID test and Jay Powell’s announcement that the Fed is taking a new tack on their approach to inflation pushed the S&P 500 to another all-time high on Thursday. While both can be viewed as “game changers,” the realization that the Fed won’t be embarking on any […]

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Party On Wayne?

August 26, 2020|3:41pm

Executive Summary: In looking at the potential for a countertrend move to develop, the best way to summarize the situation might be to say, see last week’s report entitled, “The Song Remains The Same.” The bottom line is stocks remain overbought, sentiment has reached extremely positive levels, and complacency appears to have set in. As such, one […]

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Are There Cracks In The Foundation?

August 25, 2020|2:47pm

Executive Summary: The question from our last technical review was if the stock market was “breaking out” to the upside. Cutting to the chase, the answer depends on what “market” you are looking at. To be sure, both the S&P 500 and NASDAQ 100 have broken out their recent consolidation ranges and are now trending […]

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Stocks Looking For On-Time Arrival

August 24, 2020|4:08pm

Good morning and welcome back to the land of blinking screens. Although the market’s primary cycles do not change often, I still like to start each week with a clear understanding of what type of market we are dealing with. For me, a quick glance at the color of the cycle board and the weekly/monthly […]

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A Signal To Ignore?

August 21, 2020|3:05pm

Executive Summary: With recent data showing the initial rebound in economic activity to be waning, the unprecedented level of support from the Fed and Washington takes on added importance. As such, the battle between the “real economy” and expectations for recovery is likely to continue. And so far at least, a “modern monetary theory” approach […]

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The Song Remains The Same

August 19, 2020|1:49pm

Executive Summary: As the title of this morning’s report indicates, the condition of the Early Warning board is largely unchanged. It is clear that stocks are overbought, and it can easily be argued that “the table is set” for some downside action. However, I continue to believe that stocks are currently entrenched in what I […]

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There Are Risks To Be Considered

August 17, 2020|3:55pm

As a reminder, we have made a change to the presentation of our market models and my oftentimes meandering morning market missives. The goal is to create a series of more concise, bite-sized reports, which will be published on a daily basis. Below is the weekly publishing schedule: Market Model Monday – A review of my […]

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Are Valuations A Problem Here (Or Not)?

August 14, 2020|3:24pm

Executive Summary: Monetary conditions, which includes Fed policy, remain exceptionally/historically favorable. Both economic data and corporate earnings have been coming in better than expected. Inflation, while showing some signs of life recently, isn’t likely to be a problem for stocks in the foreseeable future. And while valuations are clearly high, this is a fairly common […]

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Traders Still Buying The Dips

August 12, 2020|2:35pm

Executive Summary: Both the Early Warning board and my favorite stochastic indicators suggest that stocks are overbought. As such, one can argue that “the table is set” for some downside action. However, I will opine that we’ve got a “good overbought” condition on our hands. And given that the news on the virus, earnings, and […]

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Lots of Good Things Happening

August 11, 2020|2:57pm

The question from last week’s technical review was whether or not the stock market was “breaking out” to the upside. I noted that while the S&P 500 did indeed appear to be making a run for the border, there was little in the way of confirmation from the other major indices and that even the […]

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Additional Improvement in Primary Cycle Models

August 10, 2020|1:37pm

Good morning. As a reminder, we have made a change to the presentation of our market models and my oftentimes meandering morning market missives. The goal is to create a series of more concise, bite-sized reports, which will be published on a daily basis. Below is the weekly publishing schedule: Market Model Monday – A review […]

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Fundamentals Remain Supportive

August 7, 2020|2:52pm

I like to close out each week by checking in on the market’s fundamental backdrop. I believe this should include the areas of interest rates, the economy, corporate earnings, inflation, and stock market valuations. In short, these areas tend to be the macro drivers of many primary market cycles. And as you might suspect, yes, […]

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Good News Lends Bulls A Hand

August 6, 2020|2:08pm

To say that we are experiencing unprecedented times on both Main and Wall Streets is likely the understatement of the century. Never before has the U.S. economy been intentionally shut down and then, for better or worse, quickly reopened a couple months later. Never before has the stock market fallen so far, so fast, only […]

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Avoiding The Urge To Trade Here

August 5, 2020|2:43pm

I feel strongly that one of the keys to longevity in the business of investment management is having a repeatable process. I start each week with a review of the state of the big-picture environment. I then review the current trend and the degree of momentum behind the move. Next, I look at the potential […]

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The Question of the Day

August 4, 2020|2:45pm

The question of the day from a technical perspective is if the stock market is “breaking out” to the upside. If the answer is yes, then we need to assume that the next leg of the current bull market is about to get underway and all dips should be bought. Good times! However, if we […]

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Staying Seated On The Bull Train

August 3, 2020|3:35pm

Good morning. To review, we have made a change to the presentation of our market models and my oftentimes meandering morning market missives. The goal is to create a series of more concise, bite-sized reports, which will be published on a daily basis. Below is the weekly publishing schedule: Market Model Monday – A review of […]

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Models Remain In Good Shape

July 27, 2020|3:36pm

Since my wife and I are helping out with family in Chicagoland this week, I won’t be able to keep our new publishing schedule. However, since I update all the models as part of my weekly routine, I thought I would provide an update to our favorite models via a single report. And since things […]

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A “Good” Overbought Condition?

July 22, 2020|3:25pm

Good Morning. Since it’s Wednesday, it’s time to review our Early Warning indicator boards, which are designed to suggest when “the table might be set” for the trend to “go the other way” for a while. Our Review Process: We start each week by identifying the state of the big-picture environment. We then review the current […]

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Break On Through (To The Other Side)

July 21, 2020|3:02pm

If it’s Tuesday, it’s time to focus on the trend and momentum of the market. We start each week with a review of the primary market cycles through the lens of our big-picture primary cycle models. Next, I like to review the market’s trend and momentum via our indicator boards and running through some charts. […]

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Models Say Stay on Bull Bandwagon

July 20, 2020|3:06pm

Good Monday morning. As a reminder, I have decided to make a change to the presentation of our market models and my oftentimes meandering morning market missives. The goal is to create a series of more concise, bite-sized reports, which will be published on a daily basis. Below is the weekly publishing schedule: Market Model […]

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Fundamentals Continue To Favor The Bulls

July 17, 2020|2:57pm

Good Morning. If it’s Friday, it’s time to review our longer-term market fundamentals models and indicators. Our Review Process: Once we have identified the state of the big-picture environment (Market Model Mondays), the current trend and the degree of momentum behind the move (Technical Tuesdays), the potential for a countertrend move to develop (Early Warning Wednesdays), […]

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The Road Is Gonna Be Bumpy

July 16, 2020|3:35pm

Good Morning. If it’s Thursday, it’s time to review my thoughts on the drivers of the current market action. Our Review Process: Once we have identified the state of the big-picture environment (Market Model Mondays), the current trend and the degree of momentum behind the move (Technical Tuesdays), and the potential for a countertrend move to […]

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Early Warning Wednesday for 7.15.20: It’s Complicated

July 15, 2020|2:34pm

Good Morning. Since it’s Wednesday, it’s time to review our Early Warning indicator boards. The Process: Once we have identified the state of the big-picture environment, the current trend, and the degree of momentum behind the move, we then look at the potential for a countertrend move to develop. This batch of indicators is designed to […]

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Technical Tuesday: Stuck In The Middle With You

July 14, 2020|3:37pm

Welcome to the inaugural edition of “Technical Tuesdays.” If it’s Tuesday, it’s time to focus on the trend and momentum of the market. We start each week with a review of the primary market cycles through the lens of our big-picture primary cycle models. Next, I like to review the market’s trend and momentum via […]

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Primary Cycle Update: It’s a Bull Market

July 13, 2020|3:43pm

Good Monday morning. After careful consideration, I have decided to make a change to the presentation of our market models and my oftentimes meandering morning market missives. It has been brought to my attention that many websites now publish the number of minutes required to read the article. My brother, Mike, who is a skilled […]

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Four Key Points For This Market

July 6, 2020|4:04pm

I hope you and yours had a wonderful Fourth. It was a busy holiday weekend here in Colorado. My wife and I hit the golf course, the hiking trails, the bike path, and the doggie trail, finished the season’s planting in the year, and enjoyed a couple social distanced happy hours with friends. Frankly, I […]

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Some Surprisingly Bad Data To Contend With

June 29, 2020|4:46pm

Last week, we highlighted what we deemed to be some surprisingly good data. We cited the surge in Empire State General Business Conditions Index, the readings from US Home Purchases, Retail Sales, and even Hotel Occupancies as data that surprised to the upside – in a pretty big way. The positive surprises helped fuel the […]

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Some Surprisingly Good Data

June 22, 2020|3:31pm

I think we can all agree that the key driver to the stock market game these days is the expectation/hope for the economy to recover. To be sure, this is no ordinary recovery. Because this is definitely not your ordinary, garden variety recession. No, never before in history has the economy been stopped on a […]

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Is There Any Upside From Here?

June 15, 2020|3:10pm

With the S&P 500 closing Friday up 35.9% from the March 23 low, the key questions in my mind are simple. How high is too high? And is there any upside from here? The reason I ask these question is because it appears there is a ginormous chasm between the stock market’s recovery and that […]

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Five Lessons For Understanding This Market

June 8, 2020|4:14pm

I ended last week’s missive with the words, “So, from my seat, some caution remains warranted.” Silly me. What was I thinking? To be honest, I was thinking that the market’s recent joyride to the upside, which, as of Friday, has produced gains of 42.8% from the low on the S&P 500, 45.8% on the […]

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Turning The Corner

June 1, 2020|4:08pm

It appears the general theme of the market these days is we have turned the corner in terms of the virus and the self-inflicted damage done to the economy. This is clearly good news. And to be sure, a collective sigh of relief is warranted. In reviewing the slew of economic data that continue to […]

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Hope Springs Eternal

May 26, 2020|3:45pm

After the fastest decline of 30% off the top in stock market history, which presumably represented the “discounting” of the worst hit to the U.S. economy since, well, ever, stocks have since rebounded sharply. As of Friday’s close, the S&P 500 has gained +32.1% since the March 23rd low. The Dow has risen +31.6%. The […]

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Moderna Monday

May 18, 2020|4:16pm

I had every intention this morning of having a discussion about the divergence between the messaging the market received last week from the likes of Jay Powell, Dr. Fauci, David Tepper, and Stan Druckenmiller – all of whom expressed sobering outlooks – and, of course, the horrific economic data, versus “the trade” (you know, everyone […]

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Place Your Bets

May 11, 2020|3:02pm

The question of the day – at least in the popular financial press – appears to be, why are stocks rallying with the economy in free fall? Readers of my oftentimes meandering market missive likely already know the answer here. As we’ve discussed a time or twenty, the stock market is a discounting mechanism for […]

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Assuming Away The Can And…

May 4, 2020|2:46pm

There is an old joke which pokes fun at economists that I think applies to the current state of the stock market. It goes something like this… An economist, a chemist, and a physicist are stranded on an island with nothing to eat but a can of beans. The chemist says, “Hey, there’s a small […]

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The Battle Is On

April 27, 2020|3:14pm

Stocks technically finished lower last week (the S&P 500 fell -1.3%), but in reality, the market has been moving sideways for the past couple weeks or so. Some will call it a consolidation of the big bounce off the bottom. Others say the market is in search of an equilibrium point. And then there are […]

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Market Logic Can Be Confusing

April 20, 2020|3:48pm

The S&P 500 enjoyed its biggest bounce in 46 years last week. Which followed the biggest/fastest drop from an all-time high since, well, ever. So, naturally, the question now becomes, where do we go from here? Markets cheered the Fed’s sledgehammer response this past week. To be sure, the monetary and fiscal efforts have been […]

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What Are We Lookin’ At?

April 13, 2020|3:05pm

The S&P 500 enjoyed its biggest bounce in 46 years last week. Which followed the biggest/fastest drop from an all-time high since, well, ever. So, naturally, the question now becomes, where do we go from here? Markets cheered the Fed’s sledgehammer response this past week. To be sure, the monetary and fiscal efforts have been […]

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There Is Good News If You Look Hard Enough

April 6, 2020|2:34pm

The headlines have been awful. The human toll from the virus continues to mount. The economic impact is jaw dropping. And we’re told things are going to get worse this week. Although stocks are bouncing in the early going Monday on the hope that the worst will soon be behind us, it is clear that […]

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More Questions Than Answers

March 30, 2020|2:56pm

We’ve talked a lot lately about what I call “The Crash Playbook.” In short, this is a guide developed since the mid-1980’s on how market crashes/crises tend to play out. The premise for the playbook is, as the saying goes, “history doesn’t repeat itself, but it often rhymes.” The main reason the market tends to […]

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The Message From The Market This Morning

March 26, 2020|3:51pm

Market analysts love to talk about “the action” that occurs in the markets. Many, including yours truly, believe that the manner in which the market moves – especially after important news – can provide a “message” about the current environment. To be clear, the action definitely does NOT always provide information. No, there is an […]

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Looking Ahead To Better Days

March 23, 2020|5:03pm

It is my sincere hope that everyone remains healthy, is being diligent with their social distancing, and is surviving the new virtual work world reality. Since my kids are now all adults and I’ve had a home office since 2001, my days haven’t changed much – well, except for the daily market freak outs, of […]

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The King is Dead. Long Live the King!

March 16, 2020|4:13pm

Well it’s official, we’ve got a full-fledged crisis on our hands in the financial markets. Historic events now occur on a daily basis. Things I have never seen before in my 33-year career as a portfolio manager are now happening with regularity. Safety plays are no longer safe. The tech-ladened QQQ ETF is outperforming the […]

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When “Good Action” Isn’t And The Newest Problem

March 9, 2020|4:16pm

Things were not looking good on Friday afternoon. At 3:00 pm eastern, the major stock market indices were at the lows of the day and falling fast. The yield on the 10-year, which is viewed by many as a proxy for the economic outlook, had plunged again, this time closing the day at 0.706% – […]

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The Panic Playbook: A Blueprint For Market Crises

March 2, 2020|4:54pm

For investors of all shapes and sizes, the question of the day appears to be, now what? After the 14% thrashing of the Dow Jones Industrial Average in just seven sessions, one can’t be blamed for feeling a little shell shocked. In short, these types of market panics can leave one disoriented and unsure about […]

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Fear Has Arrived. What’s The Plan?

February 24, 2020|5:48pm

Anyone thinking that the stock market would simply ignore the potential economic impact of the coronavirus pandemic is getting a wakeup call this morning. Instead of focusing on the bright side and the stimulus plans that have been bandied about in places like China, stocks are now in full-on price exploration mode – to the […]

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Time For a Reality Check?

February 18, 2020|5:47pm

Greetings from PGA West in La Quinta, CA where it is sunny and warm. However, getting here took some doing and I had kind of a rough travel schedule last week… First I flew from Denver to NYC for meetings Monday through Wednesday. Then after a brief stop/nap in Denver very late Wednesday night, it […]

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Positives Outweighing Negatives (For Now)

February 10, 2020|4:38pm

What a difference a week can make, eh? One minute traders are freaking out (as in the 603 point dive registered by the DJIA on Friday, January 31st) over the potential impact of the Coronavirus on the global economy. And the next week, the major stock market indices are hitting new highs. Makes perfect sense, […]

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This Is The Dip

February 3, 2020|6:10pm

The excuse du jour for the current pullback/correction/sloppy period is clearly the Coronavirus. But in reality, it could have been anything. As I’ve been saying, stocks had become overbought and investors over believed in the bullish, theme. You know, the idea that we were revisiting 2013 and 2017’s one-way market, where the only decision one […]

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Stocks Catching Cold Or Something Worse?

January 27, 2020|5:21pm

You knew it was coming. No, not the Coronavirus. Rather an excuse du jour to create some selling. After an impressive joyride to the upside, which saw the S&P 500 surge +15.3% from the close of October 2, 2019 and the high seen on January 17, 2020, the stock market had become overbought, sentiment had […]

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What Do The Cycles Say About 2020?

January 21, 2020|4:58pm

Good Tuesday morning and welcome back. Last week, I took a just-for-fun stab at modeling expectations for what calendar year 2020 might look like in the U.S. stock market. And since stocks seem to only go up these days, the question of the day isn’t whether or not the S&P 500 will advance on the […]

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Modeling 2020 Expectations (Just For Fun)

January 13, 2020|4:24pm

Happy Monday and welcome back to the land of blinking screens. I don’t know about you, but I’ve been intrigued lately by all the projections/prognostications that analysts feel compelled to provide at the beginning of each year. So, just for fun, I thought I’d join in the game this year. To be clear, I do […]

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Time to Take a Break

January 6, 2020|5:43pm

Good morning and welcome to the first real trading week of 2020. It is my sincere hope that everyone enjoyed their holiday break that spanned the majority of the past two weeks (isn’t it great when Christmas and New Year’s fall mid-week!). But with the calendar having flipped to January, it’s time to get back […]

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A Remarkable Year

December 30, 2019|5:12pm

In light of the fact that the vast majority of Wall Street is on vacation this week, I’m going to dispense with my oftentimes meandering market missive and let the indicators and models do most of the talking. However, I would like to share one thought before I move on to finishing my prep work […]

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Impressive Indeed. But…

December 23, 2019|5:14pm

As the clock winds down on what little time remains on the 2019 calendar, I think we can all agree that both the year and the recent joyride to new highs have been impressive. Frankly, I don’t know of anyone who called for stocks to rally 30% at this time last year or for the […]

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The Gifts Keep Coming

December 16, 2019|5:16pm

The gifts addressed to investors just keep coming as it appears Ms. Market is in the holiday spirit earlier than normal this year. Call it the Santa Claus rally, the year-end rally, the sigh-of-relief rally, or just about anything you’d like, but the bottom line is the major market indices are enjoying a nice ride […]

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Looking at The Big Picture: Earnings and Valuations

December 9, 2019|4:59pm

Don’t look now fans, but the number of trading days left in calendar year 2019 are dwindling fast and the holiday season is right around the corner. How the heck did that happen? It’s the time of year when we are supposed to be stepping back from the blinking screens and focusing on the season. […]

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Is it Time to Worry or Look Ahead?

December 2, 2019|5:21pm

Happy Monday and welcome to the final month of 2019, where the bulls will be hoping to avoid a repeat of last year’s epic December collapse and the bears are looking to capitalize on an overbought condition. From a short-term perspective, it looks as if the much-anticipated pullback, correction, or pause is officially underway. The […]

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Can The Bulls Keep On Keepin’ On?

November 25, 2019|3:21pm

I awoke to learn that there is yet another early-season snowstorm barreling its way toward Denver this afternoon. There is talk of a foot of snow, blizzard conditions and road closures into Tuesday afternoon. As such, our plans to “take Thanksgiving on the road” to be with our daughter, son-in-law, and grandson in St. Louis […]

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Is FOMO Setting In?

November 18, 2019|5:13pm

Happy Monday and welcome back to the game. My wife and I decided to make a quick trip out to Moab, Utah to enjoy a sunny weekend in a truly spectacular place. If you haven’t been, be sure to put it on your bucket list. And for all you testosterone junkies, this is your Mecca […]

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A New Leg Higher? Or…

November 11, 2019|12:31pm

I’d like to start this week’s missive by wishing everyone a Happy Veterans Day and hoping that we can all take at least a moment to say a silent thank you to those who have kept our country safe for more than 240 years. Banks and the bond market have the good sense to be […]

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The Bear Camp Can’t Be Happy

November 4, 2019|4:52pm

Happy Monday and welcome back to the game; a game that must be a bit befuddling for the bears at this time. Think about it. Our furry friends would seem to have an abundance of firepower at their disposal. For example, there is the ongoing trade spat, which seemingly improving with China (or not, depending […]

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That Line In The Sand Again

October 28, 2019|4:28pm

Good day and welcome back to the land of blinking screens. Breakout or fake out? Despite the impeachment and BREXIT drama, the punk economic numbers, the trade war, the geopolitical issues, the Fed meeting and, of course, the ongoing earnings parade, this is really the only question that matters. In case you don’t spend your […]

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It’s All About The Parade

October 21, 2019|4:25pm

Good morning and Happy Monday. I’ve said it before, and I’ll say it again. With all of the issues, headlines, tweets, etc., it is a little surprising to see the S&P 500 sitting within a stone’s throw of an all-time high. Some will argue this is the market climbing a “wall of worry.” Others, such […]

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Current Market Concerns: The Good, The Bad…

October 16, 2019|4:27pm

In speaking with folks about the state of the stock market over the past week, it occurred to me that people’s views vary widely and seem to fall into one of three categories: the good, the bad, and the just plain ugly. Those seeing the glass as at least half empty are baffled by the […]

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Jumping The Gun But Looking Ahead

October 14, 2019|3:49pm

Good morning and Happy Columbus Day. While banks and the bond market have the good sense to take the day off, stock markets are open, and traders appear to be busy processing the latest headlines. In case you haven’t heard, it sounds like the White House may have jumped the gun with their enthusiasm over […]

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While We Are Waiting, Let’s Check On The Cycles

October 9, 2019|4:38pm

To be sure, the current stock market is focused on a couple key things. While this can clearly be placed in the Captain Obvious category, first there is the trade war. From a near-term perspective it’s this week’s trade negotiations. And second, there is the upcoming Fed meeting. Yes, yes, the economic data has had […]

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Models In Good Shape But Short-Term It’s All About The News

October 7, 2019|3:33pm

Good morning and Happy Monday. The headlines continue to drive the daily action with this morning’s weakness due to (1) news that the Chinese want to limit the scope of trade talks this week and (2) confirmation that there is at least a second whistleblower with a firsthand account of the President’s dealings with Ukraine. […]

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Assuming The Worst (Again)

October 2, 2019|2:56pm

Until yesterday, the thinking had been that the majority of the bad news was well worn. And the stuff that was new – i.e. the Dem’s Impeachment Inquiry – wasn’t likely to upset the apple cart to any great degree due to the assumption that a conviction in the Senate is a low probability bet. […]

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Despite The Headlines Bulls Hold On

September 30, 2019|3:22pm

One of the great things about spending time out in nature is you don’t focus on the intraday machinations of the markets nearly as much as when you are chained to your desk. This allows one to focus more on the big picture “state” of the market as opposed to the latest wiggle and giggle […]

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Let’s Continue to Give Bulls Benefit of Doubt

September 24, 2019|1:33pm

Greetings from the northern reaches of Yellowstone National Park. Although we’ve lived in “the west” for nearly 20 years now, my wife informed me earlier this year that we had never been to the nation’s first national park. “Let’s go this fall!” I replied. Of course this was before the trip to England and Scotland […]

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A Fistful of Reasons to be Optimistic

September 19, 2019|2:15pm

Despite all the worry, fear, and/or uneasiness in the markets these days, the S&P 500 closed Wednesday within spitting distance of an all-time high (0.63% to be exact). Not too shabby for a “hated” stock market, eh? Yep, that’s right, despite the global economic slowdown, the ongoing trade war, the unrest in Hong Kong, the […]

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The Message From The Models: Stay the Course

September 16, 2019|3:50pm

Good Monday morning and welcome back. Although I had every intention of “penning” a market missive last week and have an abundance of topics to comment on, a business trip to LA left me with little time to get anything written. My apologies for anyone missing my subjective take on the state of the markets. […]

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Monday Morning Market Model Review: Bulls Retain Possession

September 9, 2019|3:40pm

Good Monday morning and welcome back to the land of blinking screens. As long-time readers are likely aware, my weekly missive has been comprised of two sections. First, there has been my subjective take on the state and the drivers of the current stock market environment. And second, I have presented a summary of my […]

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Quick Take on The State of the Market

September 3, 2019|4:10pm

It’s been a hectic weekend and as such, I’m going to keep my subjective analysis of the market brief and let the indicators and market models do most of the talking this morning. However, since returning from our trip across the pond late last week, I have been asked a few times about my take […]

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We Don’t Need A Deal, But…

August 26, 2019|1:56pm

Greetings from York, England. We’ve just completed our driving tour of Scotland where I learned that a “dual carriageway” sign is a rare and welcome sight from the driver’s seat and that most of the “roads” in the Highlands (and rural England) are merely golf cart paths that aren’t really wide enough for 2 vehicles […]

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Has Anything Really Changed?

August 19, 2019|6:42am

Greetings from London. My wife and I are spending a couple weeks exploring England and Scotland, which so far has been, as the Brits like to say, “quite lovely.” Our visits to Westminster, Big Ben, Parliament, Buckingham, Kensington, Leeds Castle, Canterbury, Dover Castle and the local pubs, restaurants and taverns have been simply, “brilliant!” (P.S. […]

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About That ‘Message’ From The Bond Market

August 12, 2019|4:05pm

After five days of wild, news-driven swings in the stock market, where the action was dominated by escalating trade tensions, the threat of a currency war, and the possibility that the next U.S.-China meeting scheduled for September may not happen, investors can’t be blamed for starting the week with some questions. Not the least of […]

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The Indicators Suggest Weakness Should Be Bought

August 5, 2019|4:43pm

It’s been a hectic travel weekend and I’m still on the road. And with all the news flying around at the moment, I’m spending a lot of time analyzing the situation. As such, I’m going to let the indicators do the talking this morning. Weekly Market Model Review Now let’s turn to the weekly review […]

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How Do We Model For This?

July 29, 2019|1:49pm

As a risk manager, I try to find and/or create models for as many different market inputs as possible. For example, we have models for corporate earnings, monetary conditions, interest rates, valuations, the U.S. economy, commodities, the global economy, inflation, volatility, overbought/sold conditions, investor sentiment, market momentum, breadth, volume relationships, trends, cycles, leading indicators, lagging […]

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Is There Any Upside From Here?

July 22, 2019|3:04pm

Let’s review. The S&P 500 is just 5 days removed from its most recent all-time high. Central bankers around the globe are either cutting rates or getting ready to cut rates. Economic growth is slowing. Earnings in the U.S. continue to beat estimates (although the bar for the current season appears to be sitting on […]

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A Singular Mission

July 15, 2019|4:16pm

Good Monday morning and welcome back to the land of blinking screens. While there are many topics to discuss on this fine summer day (earnings, inflation, trade, economic data, etc.) I think we need to recognize that the most important topic and the topic that is driving the action in both the stock and bond […]

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What Should We Expect in the 2nd Half of 2019?

July 8, 2019|2:06pm

To be sure, Friday’s jobs report created some uncertainty in terms of traders’ Fed-expectations. While I can argue that the expectations regarding the degree and speed of anticipated rate cuts had gotten a little out of hand, the question of the day now becomes, what should we expect? As in what should we expect from […]

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How Can We Tell When The Next Big Bear Will Arrive?

July 1, 2019|2:07pm

Let’s review. The Fed is no longer the enemy. There is, at the very least, a cease-fire in the trade war between China and the good ‘ol USofA. Rates are low. Inflation is nowhere to be found. Earnings will likely set a record this year. The U.S. economy continues to chug along. And if one […]

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Lots of Inputs But Only One Real Focal Point

June 24, 2019|2:14pm

So many inputs, so little time for a Monday morning market missive. For example, there is a new record for the S&P 500. A new record for the amount of global debt sporting negative yields (now $13 trillion according to Barron’s). A new approach for many of the world’s central bankers. A new reason to […]

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Fed on Tap But Models Still Favor the Bulls

June 17, 2019|4:51pm

This week’s big news will likely come from the Fed meeting and/or the ensuing press conference with Mr. Powell. In addition, everyone on the planet is now watching the economic data for signs of weakness/recovery. And of course, any news on the trade front – such as the scheduling of an official meeting between Xi […]

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Things Can Change Quickly These Days

June 10, 2019|3:49pm

What a difference a week can make in this game, right? Last week at this time, the market was reacting in a rather hysterical fashion, of course, to news that the President was planning to use punitive tariffs in his quest to strike a deal on immigration with Mexico. At the beginning of last week, […]

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Which Message Is The Right Message?

June 3, 2019|1:47pm

There can be little argument that the stock market is a slave to the news at the present time. Friday’s surprise pronouncement that the President plans to use tariffs in a new way is exhibit A in this argument. Tweets go out. Threats are made. Uncertainty increases. Stocks are sold. Bonds are bought. Rinse and […]

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Punk Data Prevails

May 28, 2019|7:41am

It’s our last day of exploring the Greek Isles, so I’ll once again keep this brief. If you haven’t visited, I highly recommend a trip to Crete, a simply magnificent island with friendly people, gorgeous land/seascapes and lots to do and see. Oh and the seafood isn’t too shabby either! Looking at the big picture […]

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The Nuclear Option?

May 20, 2019|8:57am

Greetings from Mykonos, Greece. Since I am traveling with my wife and exploring the Greek Isles, I’m going to keep my commentary brief for the next couple weeks. One of the benefits of traveling abroad is you are removed from the daily machinations of the markets, which sometimes makes it a bit easier to focus […]

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Here We Go Again?

May 13, 2019|1:29pm

For those of you keeping score at home, the S&P 500 is in the midst of the second longest stretch without a 3% correction in the last 10 years (source: Ned Davis Research Group). Although the action was certainly exciting at times last week, that streak remains intact as the S& closed Thursday down just […]

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Tips From Real-World Wendy Rhoades

May 6, 2019|2:06pm

It was a very busy week/weekend as I first attended NAAIM’s (National Association of Active Investment Managers) annual conference. The conference was stellar, and it was great to hang out with so many like-minded investment professionals Sunday through Wednesday. I picked up some trading psychology tips from Brett Steenbarger, PhD, who was at one time, […]

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The Best Slowdown Ever

April 29, 2019|1:10pm

I’m not sure who I borrowed the title of this week’s missive from, but I think we all have to admit that this is probably the best recession/slowdown ever! Instead of the economy flirting with negative growth in the first quarter, which, if you will recall, had become the common expectation as the calendar was […]

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Is “Melt-Up” The Operative Word?

April 22, 2019|2:02pm

We’ve been talking lately about the idea that big hedge funds and systematic traders have been caught on the wrong side of the stock market’s recent run for the roses. The thinking is this fact alone could account for the lack of downside volatility and the relentless dip-buying that has been occurring this year. And […]

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About That “Retest” Thing…

April 15, 2019|1:48pm

Last week, we reviewed Marko Kolanovic’s research showing the positioning of hedge funds and systematic traders. The bottom line here is the equity exposure of these managers continues to be at very low levels relative to history. But with the stock market indices a chip shot away from all-time highs, the question is why are […]

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Is There More Upside Ahead?

April 8, 2019|1:54pm

Stocks closed at a fresh cycle high on Friday as the S&P 500 has been enjoying a 7-day win streak, which is the longest in 18 months. Don’t look now fans, but the venerable blue-chip index is now just 38 points or 1.3% away from its all-time high. And unless the upcoming earnings season provides […]

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It’s All About Expectations Versus Reality

April 2, 2019|1:19pm

One of the first headlines on CNBC.com after Monday’s closing bell read: Stocks gain 300 points, but why? The article implied that markets can’t seem to decide whether rising rates are good or bad. The author opined that just a couple months ago, stocks would have quaked at the idea of rates rising because the […]

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Does #GrowthSlowing Suddenly Matter?

March 25, 2019|1:31pm

One of my favorite sayings on Wall Street is, “Things don’t matter until they do. But then they matter a lot.” For example, the dueling issues of #GrowthSlowing and the flattening yield curve have been with us for quite some time now. In fact, we’ve known that global growth has been slowing for more than […]

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There Are Reasons For Concern

March 18, 2019|1:00pm

Well it’s official. As of Friday’s close (a close that was likely influenced by the quad-witching event and a handful of S&P index rebalances), the S&P 500 is now up +20.05% from the 12/24/18 panic low. Wow talk about a joyride to the upside! Along with the market’s surge higher, which, for the record, has […]

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A Constructive Pullback So Far

March 11, 2019|10:59am

The fact that stocks pulled back a bit last week shouldn’t have come as a surprise to anyone. The S&P 500 had enjoyed an historic joyride to the upside in a very short period of time. As in +19.2% in just 10 weeks. Along the way, stocks became overbought and sentiment got a little too […]

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A Picture Is Worth A Thousand Words

March 5, 2019|2:49pm

It is said that a picture is worth a thousand words. So, this week, I’ve decided to try and sum up the keys to the current market environment with a series of charts and graphs. I started out looking for five key charts. That quickly turned into ten. And before I knew it; I had […]

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The Message From Our Models: The Bulls Own The Game, But…

March 4, 2019|2:55pm

It was a busy weekend of birthday celebrations and important family events in my household (our youngest is moving into her first apartment!) and as such, I didn’t take the opportunity to spend a couple hours of quality time at the keyboard. While I’ve got a good start on a missive entitled “Twelve Charts Tell […]

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Understanding The Big Picture

February 26, 2019|3:41pm

One of the most important lessons I have learned about the business of investing is the drivers of the market action change over time. Sometimes dramatically so. It is for this reason that no one, I repeat, no one, has ever perfected the game for any length of time. You see, like golf, the conditions […]

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Models Say Bulls In Charge, But…

February 25, 2019|3:38pm

Each week we do a disciplined, deep-dive into our key market indicators and models. The overall goal of this exercise is to (a) remove emotion from the investment process, (b) stay “in tune” with the primary market cycles, and (c) remain cognizant of the risk/reward environment. In this process, we analyze our big-picture market models, […]

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The Stock Market Party Continues

February 20, 2019|2:26pm

The joyride to the upside in the stock market continued last week as the S&P 500 surged another 2.5%. If my calculator is correct, this means the venerable blue-chip index is now up 10.7% so far in 2019 and has put in a nifty gain of 18% since the December 24th panic attack. Impressive. What […]

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An Important Line In The Sand

February 11, 2019|2:26pm

On Tuesday, February 5 and again on Wednesday, February 6, the S&P 500 bumped into its 200-day moving average. While I’m not exactly sure why this particular indicator captures the attention of so many (there are a myriad of more effective trend-following tools readily available), the crossing of the 200-day is viewed as a big […]

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