Category: Stock Market 2022
The analysis published under this category are as follows.
Saturday, September 24, 2022
Stock Market BULL Trap SET! / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Stock Market FOMO's to 4280 Friday close ending at the high of the day! Short covering rally triggered by CPLIE of 8.5% down from 9.1% for June, all blind to the reality of what Inflation above 4% let alone above 8% actually means for the US economy and how it impacts the every day lives of ordinary americans that are destined for greater pain with each passing month even if CPLIE nose dives to under 4% which will make NO difference in terms of the Inflation pain that I suspect will run for the whole of this decade as the 10 year inflation graph warns of what looks set to come to pass. It's not rocket science, it's the consequences of over $9 trillion of QE, and $35 trillion of total GLOBAL money printing QE, the only way it won't show up in the inflation indices is if they systematically exclude everything that goes up in price, perhaps only leaving the ball point pen that Jerome Powell fidgets with at every Fed meeting.
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Friday, September 23, 2022
Why You Should Be Leery of the Stocks Bond 60 / 40 Portfolio / Stock-Markets / Stock Market 2022
By: EWI
"The tidal wave of risk assumption … may be turning"
Many investors allocate a percentage of their portfolios to bonds to cushion against a drop in the stock market.
A popular allocation is a 60 / 40 mix of stocks and bonds.
However, this hasn't worked out recently. Here's a Yahoo! Finance headline (Sept. 6):
The 60/40 strategy is on pace for its worst year since 1936: BofA
The mix of 60% stocks and 40% bonds was down 19.4% from the start of the year through the end of August, according to Bank of America Global Research.
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Thursday, September 22, 2022
Stock Market Smashing Fed Day / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 turned decisively lower, with only a very brief spike that got reversed within an hour. No room for bullish misinterpretation, Powell didn‘t say really anything that could feed buy the dip sentiment – he delivered. Treasuries are getting accustomed to the soft landing not turning out so soft in the future actually – yields at the long end of the curve have finally turned down while Fed tightening keeps being reflected on the short end, and junk bonds are suffering.
In all the risk-off, the dollar was unable to hold on to sharp gains both yesterday and today, and together with the crypto premarket upswing and real asset resiliency, this points to a reprieve in paper asset selling later this week. SPX 3,825 is the key level to watch today. I like the message commodities and precious metals are sending here – once it gets accompanied by miners and oil sector stocks, things would get brighter, but we are not there yet. Suffice to say that sharp downside is being decisively rejected.
Friday, September 16, 2022
Dow Stock Market Elliott Wave Trend Forecast / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Despite being skeptical of Elliott wave theory and not abiding by any of it's tenants, i.e. I number the counts as I see them regardless of following the 'rules'. Nevertheless Elliott wave proved a useful tool during 2021 in the count down to the end of the Stocks bull market and the start of this bear market as the charts illustrate that there are times when EW BS actually works!
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Thursday, September 15, 2022
Stock Market Elliott Wave Analysis and Trend Forecast Sept to Dec 2022 / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Despite being skeptical of Elliott wave theory and not abiding by any of it's tenants, i.e. I number the counts as I see them regardless of following the 'rules'. Nevertheless Elliott wave proved a useful tool during 2021 in the count down to the end of the Stocks bull market and the start of this bear market as the charts illustrate that there are times when EW BS actually works!
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Friday, September 09, 2022
Stocks Bear Market Rally End Game / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Dear Reader
Mega earnings week saw the stock market soar on reporting euphoria where apparently the worse the earnings the stronger the rally in stocks such as Amazon due to the twin forces of investors piling into breakouts AND the market running short stops, which surely implies that the bear market could be OVER! After all the stock market discounts the future and so is looking beyond current BAD earnings and economic data to the blue sky's of future quarters, that coupled with US bonds rallying as the market tempered future interest rate expectations down from a peak of 4% for Mid 2023 to currently 3.25% all contributing towards the S&P closing higher at 4130.
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Friday, September 09, 2022
Here's a Potential Signal for What May Be Next for U.S. Stocks / Stock-Markets / Stock Market 2022
By: EWI
This action by investors resulted in "the highest total since 2014, and probably ever"
Frost & Prechter's Wall Street classic book, Elliott Wave Principle: Key to Market Behavior, first published nearly 45 years ago and said:
"Eight years of a raging bear market have taught today's investor to be cautious, conservative and cynical. Defensiveness is not in evidence at tops."
Considering this description of investors' mindset in the late '70s and early '80s, many market observers were not contemplating the start of a big bull market.
Yet, Elliott Wave Principle did forecast a major uptrend and that's what happened.
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Monday, September 05, 2022
Stock Market Reality Check / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Mega earnings week saw the stock market soar on reporting euphoria where apparently the worse the earnings the stronger the rally in stocks such as Amazon due to the twin forces of investors piling into breakouts AND the market running short stops, which surely implies that the bear market could be OVER! After all the stock market discounts the future and so is looking beyond current BAD earnings and economic data to the blue sky's of future quarters, that coupled with US bonds rallying as the market tempered future interest rate expectations down from a peak of 4% for Mid 2023 to currently 3.25% all contributing towards the S&P closing higher at 4130.
Whilst the market was in the grips of BAD earnings mania I took the opportunity to trim my holdings which is another word for light selling, where my selling only went deep for Amazon which took my percent of portfolio down from 1.6% to 1.3% though after taking account of the price jump it's back up to 1.5% of portfolio which means I will probably sell more Amazon next week/ Whilst percent exposure is irrelevant right now as I am seeking to further reduce my max exposure limit. So more selling in the pipeline for Amazon and to a lesser extent others as the stock market so far has not done anything I have not been expecting it to do with the S&P having fulfilled my minimum target of 4080 and now has entered the TREACLE resistance zone of 4080 to 4180 as my forecast graph of some months illustrates.
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Friday, September 02, 2022
Stock Market Bull Bear Cat and Mouse Game / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 dicey premarket upswing fizzled out right after the open, volume picked up, and market breadth correspondigly deteriorated. Bonds confirmed, and the higher yields didn‘t even send the dollar much upwards. Together with the sea of red in commodities and precious metals, this smacks of deleveraging, still of the relatively orderly flavor if you look at the well behaved VIX at 26 only. The steep post Jackson Hole downswing will pause, but there isn‘t a sign that would happen precisely today yet.
Looking at the daily chart of CRB Index, crude oil, gold and silver with the miners, odds are that we would see a repeat of yesterday‘s action today as well – to a good degree. Not much has really change since my yesterday‘s review of real assets and cryptos, and especially the crude oil setback (reinforced by the Iran deal speculation Europe is pinning its eyes on) is generally worrying. The Fed keeps hammering the same message, and short end of the curve keeps duly rising. Tombstone reminder for those overstaying in the S&P 500 rally to the 200-day moving average, would be „don‘t fight the Fed – the central bank doesn‘t have your bank now, and would act on the out of control inflation“.
Thursday, September 01, 2022
Qualcom Harbinger, AI Predicts Future Stock Prices 3 Years Ahead, China Bank Runs / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
QCOM illustrates how the bottoms will tend to play out for most of the AI tech stocks, for if you are not already invested then you will likely end up waiting for the second chance to buy near the bottom all the way towards new all time highs. For instance I would be surprised if we see anywhere near $118 on Qualcom again, I may be wrong but I am assuming there are a lot of investors now wishing they had bought near $120 and are thus eager for another bite at the cherry.
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Saturday, August 20, 2022
Stock Market Trend Target, Why Peak Inflation is a Red Herring / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
The stock market remains within a trading range of S&P 3935 to 3720 with the most recent price action being a rally following a brief break BELOW the range on Thursday to run the long stops before the market reversed sharply higher. The S&P looks set to target a break of 3935 the importance of which would be to go against the bear markets tendency for down swings to exceed the preceding up swings which thus acts to weaken the bear market until either a reversal from bear market to bull market is confirmed or the bear market once more puts in a dominant big downswing. Nevertheless a break above 3935 would indicate that the last swing down was just -5.7% and thus corrective against the previous upswing of +8.9% that at least suggests to expect a similar swing higher and thus in the first instance targets 4036 which is inline with my existing target to reach resistance between 4080 and 4120.
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Saturday, August 13, 2022
Qualcom Stock Market Harbinger / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
QCOM illustrates how the bottoms will tend to play out for most of the AI tech stocks, for if you are not already invested then you will likely end up waiting for the second chance to buy near the bottom all the way towards new all time highs. For instance I would be surprised if we see anywhere near $118 on Qualcom again, I may be wrong but I am assuming there are a lot of investors now wishing they had bought near $120 and are thus eager for another bite at the cherry.
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Monday, August 08, 2022
Stock Market Unclosed Gap / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 bulls made a good run, but didn‘t deal with the bearish outcome looming, The renewed tightening bets spurred by strong headline NFPs figure, will take their toll on risk-on assets that had been driving Friday‘s run. Bets on another 75bp hike in Sep have increased dramatically, practically proving Daly or Kashkari right in that the Fed isn‘t done yet or even close to the Fed funds rate to really get inflation down. While they claim that 2% is doable and soft landing within reach, the progression from 9% downwards just doesn‘t go fast like that. At best (repeating myself for months here), they would get to 5-6% CPI, which means a tough Sep and one more FOMC still this year. Combined with balnce sheet shrinking projections, that would take a great toll on the real economy – one that is being softened by the still very expansive fiscal policy.
Let‘s look around the world (apart from the troubles in Europe and Asia such as shown in JPY weakness), many other central banks are tightening, Latin America is also tightening. It‘s not only UK and the implications discussed on Friday:
(…) Let‘s have a look at yesterday‘s Bank of England moves, kind of foreshadowing what‘s reasonable to expect from the Fed. In the UK, the prospect of entering recession Q4 2022 amd remaining in it for more than a couple of quarters, is being acknowledged. The central bank though intends to keep tightening anyway, preferring to take on inflation after it ran out of control longer they publicly anticipated. Meanwhile in the States, unemployment claims have edged higher – indicative of growing softness in the labor market.
Long-dated Treasuries continue rising as is appropriate in these conditions of economic slowdown slowly gathering pace. Similarly to inflation expectations, they‘re not yet taking the Fed‘s hawkish rhetoric absolutely seriously unlike commodity prices that are at best carving out a bullish divergence (still in the making, therefore without implications yet). Precious metals appear farther along the route of acknowledging the upcoming stagflationary reality as I continue looking for inflation to remain in the stubbornly high 5-6% range no matter the Fed‘s actions over the next 3 FOMC meetings at least. Obviously, the hotter the underlying markets, the more tightening has to be done, and that‘s extra headwind for the markets, and one making the Fed pivot a bit more elusive.
The key thing that has changed from the above, is the turn in yields – Treasuries would have a harder time rising now, but given that I expect better CPI on Wednesday (oil is down and hasn‘t bottomed yet etc), yields should retreat in what I look to be a positive market reaction – one of hoping that the Fed wouldn‘t tighten that much as is feared today they would. This wouldn‘t however save the stock market bulls.
Friday, August 05, 2022
Stock Market Rallying On Slowly Thinning Air / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 rose, driven by tech at expense of value, which is normail in economic slowdowns. The junk bond rally however stands out – a prime candidate to attract selling at the nearest whiff of risk-off. The many fundamental reasons described in Monday‘s article, remain intact, if there weren‘t geopolitical ones. Tellingly, the yield curve inversion continues deepening, and bonds aren‘t buying the tightening story in the least – they fear the Fed overdoing it. And that‘s a key catalyst behind yesterday‘s decline in real assets, with its new interpretations of neutral Fed funds rate, or „having enough not to make trade-offs“ inflation remarks.
Sure, ISM services PMI provided a daily boost to the rally, and so the revamp calculations behind tomorrow‘s non-farm payrolls would work (would the pesky hours worked sending the opposite message, get recalculated as well?) in a bid to keep the increasingly FOMO confidence in the S&P 500 rally going. It still has the hallmarks of a short-covering rally, and not of genuine animal spirits – that doesn‘t square with the dreaded R word.
Thursday, August 04, 2022
Stock Market Trend Pattren 2022 Forecast Current State / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
My stock market big picture remains to expect the Dow to target a trend towards 29,600 by late August / Early September. Note 29,600 is a TARGET for a low and NOT THE LOW, No one can KNOW THE LOW with any degree of confidence, all one can do is arrive at a high probability target and then look to see if the market confirms that expectation or not, so far the market is confirming it is heading for 29,600.
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Thursday, August 04, 2022
Will the S&P 500 Stock Market Index Go the Way of Meme Stocks? / Stock-Markets / Stock Market 2022
By: EWI
Here's what usually happens when "financial lunacy" is prevalent
You don't hear much about the meme stock craze anymore -- and for good reason.
It's all but dead and has been for months (Barron's, Jan. 28):
A Year After It Began, Meme-Stock Mania Is on Life Support
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Thursday, August 04, 2022
Stock Market Another Upswing Attempt / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 refused to swing higher yesterday, and bonds weren‘t much risk-on either. Revisiting the neutral Fed funds rate comments didn‘t do much good for risk sentiment, even though HYG doesn‘t yet reflect that with its closing price. A new attempt at 4,140s looks to be in the making, and even if we get a break higher, it‘s going to be a fake one, and fail. It would also coincide with a rejection of lower VIX values around 22, in favor of reverting back to the high 20s recent average.
The current optimism seems misplaced, and the upcoming ISM services PMI would reveal the slowly deteriorating internals of economic growth. Coupled with manufacturing PMI, these leading indicators illustrate a tough real economy to come in late 2022 / early 2023 – the dreaded R word.
Wednesday, August 03, 2022
The REAL Stocks Bear Market of 2022 / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
US Housing market variables are in a state of flux for we have the consequences of Quantitative Tightening with the Fed having started to sell $15 billion of Mortgage Backed securities per month, US teetering on the brink of recession given that Q1 saw -1.4% with Q2 also expected to be weak, a coin flip between +0.2 and -0.2 or worse and thus hey presto the RECESSION has ARRIVED! Brewing Financial Crisis 2.0 that I I flagged some 10 months ago where the reverse repo market of $1 trillion has now doubled to $2 trillion which implies increasing counter party risk where we wont know what the banking crime syndicate has exactly been upto in the housing market until banks start failing. Interest rate hikes of 0.75% when the Fed Chairman said 0.75% was off the table which means US rates are probably going to go a lot higher tham most can imagine today, consensus is 3.25% to 3.5%, reality could be north of 5%, so a lot of variables are in a state of flux which means instead of seeing clarity with more data I am seeing confusion!
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Friday, July 29, 2022
What it's like at a Stocks Bear Market Bottom / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
This clip from March 2009 illustrates what it's like at a market bottom, that had analysts stating at Dow 6490 that the Dow was nowhere near a bottom which was at least another 20% to 25% further below.
AT THE BOTTOM
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Tuesday, July 26, 2022
The Psychology of Investing in a Stocks Bear Market / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Every bull market is followed by a bear market and every bear market is followed by a bull market, where courtesy of the electron and inflation mega-trends the general indices are on an upwards exponential trend trajectory. Thus all bear markets are living on borrowed time and thus ones focus should be on accumulating positions in good stocks i.e. those that actually generate earnings and have good prospects for continuing earnings growth that courtesy of bear market negative sentiment results in prices trading to under value stocks i.e. to under X18 earnings, where everything above X18 is carrying a premium which is why I completely sold out of many stocks last year such as Amazon and Nvidia even though they had yet to peak due to the risks of a valuation reset as I covered in my in-depth analysis of August 2021
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