Stocks started out the day surging higher as investors look to “buy the dip” in stocks as the market is flashing “oversold” conditions on a short-term basis. For the past several years buying the dip has been profitable, but right now it isn’t working. When examining trading volumes, I noticed that as stocks have sold … Read more
On what is being billed as a critical week for U.S. stocks, equities lurched in early trading after European equities were up and Asian equities were mostly down. The Fed’s preferred inflation gauge, or Core PCE, showed inflation held at +2.0% for September. Treasury yields faded their early move higher as inflation expectations moderate. Personal … Read more
The U.S. stock market is facing a critical week as the major indices are heading towards correction territory. Bulls are hoping seasonality comes into play, as stocks tend to rally following midterm elections and into the holiday season. They are also looking forward to corporate share buybacks resuming as the blackout period begins to fade. … Read more
If there was ever a day the stock market needed to rally, then today is that day. With the major indices giving up their gains for the year and all below their 200-day moving averages, a bearish signal, leveraged investors likely received delinquency notices from their brokerage firms last night. A delinquency notice, or margin … Read more
Stock prices are a function of liquidity, or how much money is sloshing around the financial system, and not earnings. Even though earnings are positive, stock prices are falling due to a lack of liquidity. Even with the lack of liquidity, stock prices are trading well above where they should be based on their earnings. … Read more
Following a global routing of stocks, U.S. stock indices opened below their 200-day moving averages, which are key technical levels investors watch to determine the strength in a market. When a security continuously trades below its 200-DMA, it is considered a bearish signal. Buyers stepped into the markets early to take advantage of this drop … Read more
The S&P 500 closed below its 200-day moving average for the second day in a row. Retail investors continue to buy, as they believe this recent weakness in the stock market is a buying opportunity. Large investors are selling to the retail investors, which is evident by the increase in trading volumes. The other factor … Read more
Next week approximately 150 S&P 500 companies are expected to announce their third-quarter earnings. Forward earnings guidance hasn’t been overly bullish, with fourth-quarter earnings expected to see a sharp deceleration as the global economy slows down. Also next week the U.S. Treasury will auction off $276 billion of debt, which is believed to be the … Read more
One might think a -3% drop in the Chinese stock market, which is now down -30% from it’s January highs and at the lowest level since November 2014, might give U.S. investors a reason to back off their bullish bets. Despite the high correlation between the U.S and Chinese stock markets, U.S. investors eagerly continued … Read more
U.S. stocks started the day in the red, but buyers came to the rescue to push prices higher. Investors continue to believe that U.S. stocks are a safe haven and are immune to any economic downturns. While in the short-term such views can be accurate, stock prices have always fallen during every economic downturn. The … Read more