The Dow has rallied over 3,000 points since the Christmas bottom (basis futures) and most indices are up 14 of the past 17 trading days. Financials have had their 2nd most rapid ascent in 20 years over a 15 day period. What’s more impressive is the psychology of the market…
Santa was right on time this year, but unlike last year’s not stop sleigh ride to record heights, this year he left investor stockings with lumps of coal. The major US stock market indices fell 20% on average into the Christmas day low, with a climactic 4 day plunge of 2,500…
President Trump campaigned in 2016 on making the US Dollar weak again to reduce the endless wave of record trade deficits with China. Clearly he delivered on that pledge throughout 2017 as the Dollar Index fell 12% and devalued almost 11% against the Chinese Renminbi (Yuan). While Trump delivered on…
Moribund Manufacturing data and slower growth guidance by Apple have exacerbated growing fears of recession, sending stocks plunging 3% on the January 3rd. However, exceptionally strong job growth and dovish support from Fed Chair Powell the next day sent stock soaring 4%. Making sense of the frequent news driven volatility is challenging,…
Frackers rule! The House of Saud may want to stabilize Brent Oil above $60 or $70 a barrel, but OPEC and Russia no longer control prices and haven’t since the 2015 energy recession. Every time OPEC cuts production they essentially transfer that lost output as a gift to the US. Despite our long…
While we have been medium term Bearish on stocks and oil since early October, we published a flurry of newsletters between December 7th and 12th signaling even more trouble ahead. Our 3 Tests and a Tumble letter a couple weeks ago further detailed the markets penchant to bust through support after a price…
Many years ago the “Three Steps and a Stumble” rule was popularized, referring to a pattern of three hikes in the Fed Discount Rate as a precursor to major stock and bond market downtrends. While not as a relevant, we adopted our own adage decades ago of 3 tests and…
Concerns of an escalating US – China Trade War causing earnings downgrade contagion in 2019 has been a major factor in lower stocks prices. The benchmark SP 500 and Dow stock indices have just finished their 3rd test of the 10% correction support levels since the October 3rd record highs and one…
The American Association of Individual Investors (AAII) measure of small stock owner sentiment has just reached the most pessimistic levels in 33 months at the closing lows of this market correction to date. The last time the average investor was this Bearish occurred in early 2016 at the end of the global energy recession….
Now that cash holdings are beating the stock market gains for 2018, “Goldman Says It’s Time for Equity Investors to Boost their Cash”(11-20-18). Headlines from Goldman Sachs, Wells Fargo and many analysts warn that investors should not Buy the Dips and remain defensive. Anecdotally this is one of the more…
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