Citigroup’s Tom Fitzpatrick asserted that the U.S. market is emulating the pattern of a 1970s-style bear. The company’s chief technical analyst suggested that stocks would likely fall 20% or more on economic factors like sky-rocketing oil, declining economic activity, rising unemployment and a collapse in housing.
There are quite a few problems with Mr. Fitzpatrick’s assertion. Unemployment is woefully high due to a [...] Continue Reading...
Until recently, investors showed little interest in hedging against a potential collapse in the S&P 500. Some might have even described the environment as complacent with the CBOE S&P 500 Volatility Index (VIX) spending most of the year in the “mid-teens.”
Now the VIX is back above 20. At that level, options participants anticipate an “annualized” change of 20% over [...] Continue Reading...
Jamie Dimon, CEO of JP Morgan Chase, believes that the housing market has bottomed and that there’s virtually no risk of recession. However, the head of the most profitable U.S. financial corporation may be banking too much on the Federal Reserve alone.
Granted, Bernanke is unlikely to step away from the electronic money printing press until job growth is double what [...] Continue Reading...
Beginning with subprime concerns in 2007, the United States had to throw all kinds of spaghetti at the Wall before noodles began to stick. For instance, the Federal Reserve first slashed interest rates. Later, in March of 2008, the Fed and J.P. Morgan orchestrated a buy-out of Bear Stearns. In September, the SEC banned the short-selling of financial [...] Continue Reading...
For four consecutive days, the Dow Jones Industrials rose or fell 400 points or more. In fact, that’s never happened before in the history of the U.S. market. Does it matter? (No, seriously. What can one glean from this historical factoid?)
Well, we can take note that new records are not all that surprising… not when the trading [...] Continue Reading...
On 8/2/11, the same day that President Obama signed a bipartisan bill to raise the debt ceiling, the stock market floor collapsed. Specifically, the S&P 500 closed below its 200-day moving average — a technical trendline for stock buying support.
Indeed, the heralded benchmark of U.S. stocks hadn’t finished below its 200-day MA since last September. Equally disconcerting, [...] Continue Reading...
As the mainstream media touted the NASDAQ’s best day in 6 months, its Powershares proxy (QQQ) has remained range-bound for the past 10 weeks. Similarly, as CNBC guests heralded earnings successes from chip-giant Intel to industrial conglomerate United Technologies, the S&P 500 SPDR Trust (SPY) had failed to appear on the new “52-Week High” list.
The fact that popular [...] Continue Reading...
The broader S&P 500 may not have fallen far enough to have met the technical definition of a stock market correction. Yet we shouldn’t dismiss an intra-day, high-to-low pullback of 7% as unremarkable. (For that matter, there may be more selling pressure ahead.)
On the flip side, what if the worst of the selling has passed [...] Continue Reading...
Throughout 2010, some of the most desired investments included energy pipeline partnerships, convertible bonds, preferred stocks, REITs, junk bonds and dividend stocks. Pick any area in the first 10 months… you were shaking your money maker. Best of all, the lower risk Total Return ETFs had been keeping pace with riskier Common Stock ETFs.
Then came the Republican election victories, Federal [...] Continue Reading...
The custodian for the overwhelming majority of my client assets under management is TD Ameritrade. So there are few ETF advocates as happy as I am about free trades on vehicles from the Big 3: iShares, Vanguard, State Street. (Note: There are a few ETFs from PowerShares, VanEck and WisdomTree, but they are noticeably small in number.)
In [...] Continue Reading...
