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Tag Archives: confidence

When A Bond Bull Becomes A Raving Stock Bull

Over the last few years, I have continually battled the “bond bears” about calls for higher rates simply because rates were low.  Here is a short list of some of the more prominent calls for higher rates: Those are just a few, and certainly, there were many other calls for higher rates from every corner of Wall Street. One of the biggest issues with the predictions of rising 10-year bond yields, which started in earnest in 2013, is they have been consistently wrong. For a bit of history, you...

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Technically Speaking: The Lessons Poker Can Teach You About Investing

Over the last couple of weeks, I have laid out the bull and bear case for the S&P 500 rising to 3300, and the case for the Fed to cut rates. In summary, the basic driver of the “bull market thesis” has essentially come down to Central Bank policy. This reliance on the Fed has led to a marked rise in “complacency” by investors in recent weeks despite a burgeoning list of issues. As shown in the chart below, the ratio of the “volatility index” as compared to the S&P 500 index is...

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Technically Speaking: Fed “Hopes” Spark Return Of Bullish Complacency

In this past weekend’s newsletter, I laid out the bull and bear case for the S&P 500 rising to 3300. In summary, the basic driver of the “bull market thesis” essentially boils down to Central Bank policy, as noted by the WSJ yesterday: “U.S. indices hit record highs last week on rate cut expectations. We’ve shifted from fiscal stimulus to monetary stimulus as the driver of the rally.” In other words, it is all about “rate cuts.” This reliance on the Fed has led to a marked rise in...

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Technically Speaking: Monthly S&P 500 Chart Update & Review

With June now officially in the books, we can take a look at our long-term monthly indicators to see what they are telling us now. Does the recent breakout to “all-time highs” mean the bull market is finally back? Or, is this breakout doomed to failure as the previous breakouts have been? That’s the answer we all want to know. Each week on RIA PRO we provide an update on all of the major markets for trading purposes. (See an unlocked version here. We also do the same analysis for each S&P...

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Technically Speaking: The Bull Is Back, Bonds Say “No”

For the fifth time, since the end of 2017. the market hit an all-time high. Each previous all-time high has led an almost immediate sell-off.  Will this time be different? This was the question I asked last Tuesday: “Such is the belief currently which is being driven primarily by the ‘Pavlovian’ response of a more ‘accommodative’ Federal Reserve which is expected to cut rates sharply by the end of this year. It is also the ‘hope’ there will be a resolution to the ongoing ‘trade war’ with...

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Technically Speaking: Bull Market Or Bull Trap?

For the fourth time, since the end of 2017. the market has set an all-time high. Each previous all-time high has led an almost immediate sell-off.  Will this time be different? Such is the belief currently which is being driven primarily by the “Pavlovian” response of a more “accommodative” Federal Reserve which is expected to cut rates sharply by the end of this year. It is also the “hope” there will be a resolution to the ongoing “trade war” with China at the G-20 Summit next week.  Nowhere...

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Technically Speaking: COT Positioning – Volatility, Oil, Dollar, & Rates

Over the last three weeks, we have discussed the “sellable rally” in the markets. However, one of the more stunning movements in the market was in interest rates which have fallen sharply in recent months as “deflation” and “economic weakness” have become points of concern for the Federal Reserve. Just last year, the Federal Reserve was hiking rates with the expectations of stronger economic growth and rising inflationary pressures from a tight labor market. Almost a year later, the markets,...

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Technically Speaking: The “Sellable Rally” Chart Review

Over the past couple of weeks, we have been discussing a “sellable rally” following the sell-off during the month of May. To wit: “This week we are going to look at the recent sell-off and the potential for a short-term ‘sellable’ rally to rebalance portfolio risks into. The markets only need some mildly positive news at this point to spur a ‘short-covering’ rally. I would encourage you to use it to reduce risk, rebalance holdings, and raise cash until the ‘trade war smoke’ clears. The market...

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Technically Speaking: Tops Are Processes, Bottoms Are Events

In April of 2018, I posted an article laying out 10-reasons why the “bull market” had likely ended for a while. To wit: “I highly suggest you use any substantial rally to reduce risk and rebalance portfolios accordingly. Why? Because I am going to out on a limb and making a call.’I think the 9-year old bull market may have ended in February.’”  As I stated then: “In 2015, the market plunged as Fed Chair Janet Yellen brought QE3 to its conclusion and started hiking interest rates for the first...

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Powell Channels Bernanke: “Subprime Debt Is Contained”

I recently discussed one of the biggest potential “flash points” for the financial markets today – corporate debt. What I find most fascinating is how quickly many dismiss the issue of corporate debt with the simple assumption of “it’s not the subprime mortgage market.” Correct, it’s not the subprime mortgage market. As I noted previously: “Combined, there is about $1.15 trillion in outstanding U.S. leveraged loans (this is effectively “subprime” corporate debt) — a record that is double the...

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