Extraordinary rallies off bear market bottoms are typical. Bullish run-ups in March of 2003 as well as March of 2009 registered enviable unrealized gains of 35% and 65% respectively; each advance experienced little resistance for roughly 9-10 months. Powerful moves off minor corrections are less typical, if not downright suspicious. Investors in the S&P 500 SPDR [...] Continue Reading...
For the first time in 2013, investors do not appear to be tripping over themselves to buy every fractional percentage dip. Here on 4/15, the media have blamed the accelerated selling on commodity price depreciation and a disappointing GDP reading (7.7%) out of China. So we’re supposed to believe that a manic Monday where the domestic [...] Continue Reading...
Over the course of the 4-year bull market, I’ve kept an eye on the percentage of S&P 100 stocks that reside above a long-term 200-day trendline. Market pressures always seemed to develop when the level approached 86%-90%. Similarly, when the 50-day moving average for the S&P 100 reached 85%, you could pretty much count on [...] Continue Reading...
People are feeling better about spending money. Similarly, investors are feeling better about risking it. The problem is, whenever people begin to feel wealthy due to a faulty premise (i.e., the U.S. Federal Reserve can keep buying bonds to depress interest rates without longer-term implications), they may spend more than they have. Others may blindly [...] Continue Reading...
Non-cyclical stock sectors (e.g., consumer staples, health care, utilities, etc.) often do well when there are concerns about economic growth. Indeed, exchange-traded funds representing one or more components of the non-cyclical arena have been the key drivers in the broader U.S. market’s run toward all-time records. Nevertheless, it is still a bit surprising that the potential [...] Continue Reading...
Prior to the 2007-2009 financial meltdown in the U.S., risk-takers thoroughly embraced the idea that emerging markets would regularly trounce the developed economies. At times, this simply meant that emerging market stocks would outperform on the upside. At other times, this referred to the ability of “emergers” to hold on to gains… even if U.S. [...] Continue Reading...
U.S. stocks (S&P 500) have packed on Olympic-sized gains through the initial eight weeks of 2013. Fed policy uncertainty aside, 6%-plus capital appreciation on low volatility is impressive by any measure. The bulk of the run-up is attributable to industries tied to economic growth and enhancement. Sector ETFs that represent financials, industrials, technology and energy have [...] Continue Reading...
Bullish commentators have been busy admonishing those who might be cautious. Their reasoning? Long-term investors should focus on the signs that point to stable economic growth in the U.S., a recovery in China as well as unwavering stimulus by the Federal Reserve. Besides, with Treasuries offering more risk than reward, where else are you going [...] Continue Reading...
Jack Hough recently wrote an “Ahead of the Crowd” article for Barron’s on finding value in the stock market. The author cited a Merrill Lynch study that looked at core fundamental data dating back 25 years — data like book value, cash flow and earnings — to determine overpriced and under-priced sectors. My first reaction to [...] Continue Reading...
According to EPFR Global, money poured into stock funds at a faster pace over the last week than at any time since September of 2007. For those who may not immediately recognize the date as particularly significant, October 2007 kicked off one of the most volatile and bone-jarring bear markets in U.S. history. By no means [...] Continue Reading...
