Archive

Nov 29, 2022

Chip Stocks are Still at a KEY Technical Juncture

The charts on the SMH semiconductor ETF are starting to look quite dicey, so this week should be very important for this key leadership group.
Nov 28, 2022

When It Comes to Making Sacrifices, Pandemics are Not the Same as War.

The Chinese government is stuck between a rock and a hard place...and it could/should have important implications for global growth and global stock markets.
Nov 27, 2022

Critical Week Next Week...In Several Different Ways.

The S&P 500, the NDX 100, the DJ Transports, gold, natural gas, the dollar...all stand at key technical junctures. Next week should be a very important one.
Nov 22, 2022

Three Key Consumer Stocks to Watch Over the Next Two Weeks.

Amazon, Federal Express, and Apple should tell us a lot about the state of the consumer over the next two weeks. That, in turn, will tell us a lot about the economy as we move into 2023.
Nov 21, 2022

College Professors Don't Live in the Real World

We heard another example this weekend...this time from a college professor...that showed how too many people don't understand the full extent of what will take place in the economy/markets as stimulus is removed.
Nov 20, 2022

The Coming Recession Means New Lows for the Stock Market Eventually.

The removal of liquidity in the system has much more far reaching implications for the markets and economy than most investors realize.
Nov 18, 2022

Financial Stocks Stand at a Key Technical Juncture...(Also, Go Lafayette, Beat Lehigh!)

Both the XLF and KBE financial/bank stock ETFs are testing key support levels, so any further decline in the next week or so will not be good for the group.....Also, Go Lafayette, Beat Lehigh! :)
Nov 17, 2022

God Bless UVA

We'll continue to keep a very close eye on the chip stocks going forward. However, there is much more to life than the markets. Our prayers are with all of those in Virginia (and Idaho for that matter).
Nov 16, 2022

Is The Consumer Really Still Strong???

The official Retail Sales data from the government today was good, but it's only holding up because consumers are borrowing more...a lot more. That cannot last.
Nov 15, 2022

Spiking the Ball on the 5-Yard Line (maybe even the 20-yard line).

Extrapolating one CPI and one PPI number into the narrative that inflation is dead is ridiculous. However, we have to trade the market that's in front of us, so we will stay nimble near-term.
Nov 14, 2022

Near Term: Watch the Dollar.

Longer-term, the upcoming recession will take the stock market to new lows. Shorter-term, we'll be watching the chip stocks...and the dollar.
Nov 13, 2022

Did Last Thursday's CPI Number Really Change the Outlook Much?

Last week's CPI number does not signal an upcoming significant drop in inflation. More importantly, a reversal in long-term interest rates...during a bear market...actually signals LOWER stock prices, NOT higher prices...because they signal a recession.
Nov 8, 2022

The Nasdaq sits at a critical (repeat CRITICAL) support level

The next move of significance in the Nasdaq will be EXTREMELY important...because it is testing a CRITICAL long-term support level.
Nov 7, 2022

Higher Rates: The Negative Impact On Earnings Has Only Just Begun

Earnings estimates for 2023 are falling. When the full impact of the 75-basis point hikes of the past four months becomes evident, those earnings forecasts will have to fall further. That will not be good for the stock market...no matter when the Fed "pauses."
Nov 5, 2022

Buckle Up, the Fed has Confirmed that We're Headed for a Recession.

The Fed is tightening as we are heading into a recession. What more do you need to know???
Nov 4, 2022

Apple (AAPL) Stands at a Key Technical Level

Anything can happen short-term (after today's employment report), but the line of least resistance is now lower again. Keep an eye on AAPL to tell you when the next decline will gain momentum.
Nov 3, 2022

Remember "lower for longer"? Well, now we have "higher for longer."

Essentially, Chairman Powell told the markets yesterday that changing the size of their rates hikes is not the same thing as a “pause”…and not even close to anything that could called a pivot. That's not good for risk assets.
Nov 2, 2022

Is a Less Hawkish Fed Already Priced Into the Market?

Even those who are looking for the S&P to rally above 4,000 must now have one eye on the exit door...given that 3/4 of the rally they are looking for has already taken place!
Nov 1, 2022

Does the Fed really WANT a big stock market rally into year-end?

If the Fed wants to keep policy tight, they won't want another huge stock market rally like they had this summer........The S&P 500 is testing a KEY resistance level.
Oct 31, 2022

Fans of the NY Jets Have Got To Be REALLY Ticked-Off!!!

Wow, the Pats get the calls even after Tom Brady is gone! Nothing changes! If nothing has changed about bear markets, the rest of Q4 might not be as good for the stock market as many people think.
Oct 29, 2022

Good Week for the Markets, But the Fundamental Backdrop Got Worse.

The markets preformed well last week...despite the fact that the fundamental and geopolitical backdrop deteriorated. The markets cannot ignore this for long.
Oct 28, 2022

Lower Yields Won't Help Stocks (in a Recession) as Much as Some Believe.

This week's tech earnings are finally signaling that we'll very likely see the usual decline in earnings that comes with a recession. That's not good for the stock market.
Oct 27, 2022

Is the Trend for the Dollar Changing?

While we wait for tonight's all-important earnings reports out of Apple and Amazon, we'll also be keeping a close eye on the dollar. Any change in trend will be important for other assets (like commodities).
Oct 26, 2022

The Stock Market is NOT Oversold Any Longer!

Despite what many pundits say, the stock market is not oversold anymore, so if this week's tech earnings continue to disappoint, it's going to weigh on the stock market.
Oct 25, 2022

Yes, Overall Sentiment is Bearish, BUT Near-Term Sentiment is Not.

Although overall sentiment is very bearish, most people are looking for a further short-term rally. Therefore, any rally might not be as strong as many think.
Oct 24, 2022

What are Apple & Amazon Going To Tell Us About Consumer Demand?

There are some technical reasons to think that the stock market could rally further, but if AAPL and AMZN tell us the consumer is weakening, all bets are off!
Oct 23, 2022

As Investors, We Need to Understand What the Fed is Really Trying to Accomplish

The stock market could rally more over the near-term, but given what the Fed is really trying to accomplish, we'll see lower-lows eventually in this bear market.
Oct 21, 2022

Can the Treasury Market Actually Give the Stock Market Some Relief Soon?

After an historic run over almost three months, the bond market has become extremely oversold (overbought on yields). Can a reversal in this market help stocks rally further soon?
Oct 20, 2022

Is it the Fed's Job to Prevent Recessions?

We have one KEY resistance level to watch to see if the market can rally as much as some people are calling for right now.
Oct 19, 2022

What Do 2022 and 1987 Have in Common?

Oct 18, 2022

The Stock Market Will NEED Lower Yields If This Rally is Going to Have Legs

Every stock bear market bounce this year has coincided with (or been preceded by) a drop decline in yields. Therefore, the stock market is going to need some help from the bond market soon.
Oct 17, 2022

Which Is It? Is Stimulus Bullish or Bearish for the Markets???

For many years, stimulus has been very bullish for the markets. Now, in the UK, it's suddenly become bearish. This shows how broken the markets have become this year.
Oct 16, 2022

The Stock Market Has Not Priced-in a Recession Yet

The stock market has not yet met two conditions that have been met at every bottom of a bear markets since WWII. Therefore, although the market will see sharp short-term bounces from time to time, the stock market will likely see lower-lows...and thus investors need act accordingly.
Oct 14, 2022

Did Anything Really Change Yesterday?

The bounce we saw yesterday was merely a technical one. As investors shift their thoughts away from inflation and towards a recession, a further decline should develop before long.
Oct 13, 2022

Peak Inflation is Becoming a Process Instead of a Turning Point

Today's CPI number shows that inflation is still a problem...and thus the Fed will continue to tighten monetary policy. Either way, we're headed for a recession...and that's not good for stock prices.
Oct 12, 2022

Can Bearish Sentiment Alone Create a Bottom?

We could see a short-term bounce at any time, but the line of least resistance is still lower. If certain key near-by support levels are broken, bearish sentiment won't help the market bounce
Oct 11, 2022

The S&P 500 and NDX 100 are Testing Critical Support Levels

Both the S&P 500 and the NDX Nasdaq 100 are testing vitally important support levels, whichever way it breaks in the next week or so will be critical....Also, it's important to note that the "unwinding of leverage" is not a technical process.
Oct 10, 2022

Financial Stocks at a Key Technical Juncture

It's more evident that we're headed for a recession and that will create more headwinds....Also, the XLF financial stock ETF is testing a key support level.
Oct 9, 2022

Market Headwinds: First It Was The Fed, Now It's Recession.

A Fed "pause" is much different that a Fed "pivot". If all we get is a "pause," the weakening economy (& lower earnings) will push the stock market lower.
Oct 6, 2022

Energy stocks should have further to run

The energy stocks have seen a VERY strong rally recently, so they might be due for a very-short-term “breather” soon. HOWEVER, the OPEC news & its technical picture should combine to lead to a nice (further) year-end rally soon.
Oct 5, 2022

Credit Suisse CDS Prices Rising Again.....Aaron Judge

The rally in the stock market over the past two days has been the kind that is frequently followed by a further rally before long. However, the renewed rise in the price of insuring Credit Suisse's debt is a major concern.
Oct 4, 2022

Key turning point...or big head fake?

Will the problems at Credit Suisse cause the Fed to pivot? There is one level to watch to get the answer to that question.
Oct 3, 2022

Rough times ahead, even if we don't get a "Lehman moment."

The stock market could see a short-term bounce at any time (even a sharp one). However, the stress level is definitely rising in the financial system.
Oct 2, 2022

The Stock Market Is Oversold, But is Something About To "Break" In The Financial System?

The stock market is oversold, but signs of increased stress in the financial system are growing.....Will something "break" in the system soon?
Sep 30, 2022

Signs that the U.S. 10yr yield is seeing a short-term top.

We are seeing some signs that the yield on the 10yr note could be topping out right now. This could have some important implications for the near-term potential for the stock market…as long as it’s not a “flight to safety” trade for Treasuries.
Sep 29, 2022

The Next Two Days Should Be Extremely Important For The Stock Market

The stock market has actually been stuck in a range the past 4 trading days. Whichever way it breaks out of this range is going to be extremely important.
Sep 28, 2022

The BOE blinks.....Is HD poised for a strong bounce?

The Bank of England's decision could be a catalyst for a bounce in the oversold stock & bond markets.....Also, Hurricane Ian could/should be positive for Home Depot.
Sep 27, 2022

Turnaround Tuesday?

The stock market sold off yet again yesterday, but we saw more signs that it's ready for a meaningful short-term bounce.
Sep 26, 2022

Heading into the eye of the hurricane soon?

The markets are getting ripe for a SHORT-TERM reversal. However, it will only be the eye of the hurricane and should be used as an opportunity to raise cash.
Sep 25, 2022

Weekend Insights

The Fed has taken a soft lading off the table. Therefore, even though we could see a sharp bounce at any time, the stock market is headed lower.
Sep 23, 2022

Will We See Some "Forced Selling" Before We Make a Short-Term bottom?

Sep 22, 2022

So Much For The Soft Landing

Chairman Powell has taken a "soft landing" off the table. The stock market is too expensive for a soft landing.
Sep 14, 2022

10yr yield is testing its June high, so stocks should test their June low before long.

The stronger than expected CPI data clobbered the stock market yesterday…as the S&P 500 fell more than 4% and the NDX dropped more than 5%.
Sep 13, 2022

Sometimes markets bounce for purely technical reasons.

We must admit that we were very surprised by the narrative that developed around Wall Street on Friday that said the employment data was the kind of “Goldilocks” report that would cause the Fed to pivot more quickly than they’ve been saying recently.
Sep 12, 2022

Is volatility going to creep into the currency markets as well?

Every month, the employment report has something in it called the “birth/death rate”…which is (at best) a guesstimate…and can change the nonfarm payroll number dramatically.
Sep 10, 2022

Many investors are bottom-up investors, while some investors start from a top-down outlook.

HOWEVER, they’re both a bit less important than they usually are today.
Sep 9, 2022

The dollar is due for a decline of more than just a few days.

As many people were focused on the sad news that Queen Elizabeth II had passed away, the stock market had a tough time getting its bearings yesterday.
Sep 7, 2022

Apple….Chairman Powell….but don’t forget about Bitcoin.

The stock market fell yesterday…which makes it 4,372-days in a row that it has declined.
Sep 2, 2022

Employment Report…Is Lincoln Riley really USC’s savior?

A more than 1% decline in the stock market in the morning yesterday was erased by the end of the day…as traders balanced their positions in front of today’s employment report.
Sep 1, 2022

Near-term targets for the S&P 500 and NDX 100.

We were out of the office and almost completely away from the markets yesterday…and it looks like we missed a very active day.
Aug 30, 2022

History tells us that the first down leg of a bear market is not the worst part of the “bear.”

It’s when the second leg develops (or sometimes, the third leg) that things get ugly. That’s when the biggest downgrades in economic growth and earnings growth take place.
Aug 30, 2022

Billy Jean King

Aug 29, 2022

Getting “clean” from the “liquidity addiction” was always going to be a painful process.

The narrative around Wall Street changed significantly last week when Chairman Powell confirmed what his colleagues have been saying for many weeks.
Aug 27, 2022

Back in mid-June, we said that the stock market was oversold and over-hated.

We returned to a bearish stance too early this summer, but we were correct in our analysis that said the Fed is not going to “pivot” as early as most of Wall Street were thinking recently…and thus not as much as the markets were pricing-in for a while now.
Aug 26, 2022

Some quick bullet points in front of Chairman Powell’s speech.

There really isn’t a lot we can say this morning that will be overly compelling in front of Chairman Powell’s comments (that will be delivered at 10:00am), so this morning’s piece will be a short one.
Aug 25, 2022

Will “Fed speak” totally lose its relevance?

The news that China is going to add 1 trillion yuan of more stimulus to their system has the futures trading higher this morning.
Aug 24, 2022

We’re more focused on the pace of QT…than the pace of tightening.

Well, we did not get a “turnaround Tuesday” yesterday…as the market finished the day little changed. However, we didn’t get any downside follow-through either, so it was pretty uneventful all around.
Aug 23, 2022

High yield market has sent up a big yellow flag.

The stock market has a very rough day yesterday…as both the S&P 500 and NDX 100 fell both fell more than 2%.
Aug 22, 2022

Taming inflation and earnings growth don’t go together.

The stock market’s decline in the second half of last week was a rough one, but it certainly was not a disaster.
Aug 20, 2022

It has been said that we use a lot of common sense in our analysis.

This weekend’s piece is going to be a shortener one than usual. HOWEVER, I have provided A LOT of charts this weekend…which could turn out to be extremely compelling, so I think you’ll find this weekend’s piece quite interesting……Thank you very much.
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