Analysis Topic: Stock & Financial Markets
The analysis published under this topic are as follows.
Thursday, April 08, 2021
Stock Market New S&P 500 Highs or Metals Rising? / Stock-Markets / Stock Market 2021
By: Monica_Kingsley
Bullish run in stocks is on, driven by tech gains and value not yielding an inch. A rare constellation given the the long-dated Treasuries performance especially – as if the narratives were flipped, and value „could“ move up on rising yields. Well, liquidity and bets on the stocks benefiting from the coming infrastructure bill.
Any way you look at it, the market breadth is positive and ready to support the coming upswing continuation, even though I look for a largely sideways day in stocks on Tuesday given the aptly called fireworks to happen yesterday. Sizable long profits in stock market trades #6 and #7 have been taken off the table – 149 points in my Standard money managements, and 145 points in the Advanced money management that comes on top.
Both the VIX and put/call ratio are at extended levels – the first below 18 (formerly unimaginable to stock market non-bulls), the second approaching local lows again. As I have written yesterday:
(…) Throughout the markets, risk-on has been making a return as long-dated Treasury yields retreated, dollar fell and commodities continue their bullish flag formation. As I have tweeted on Thursday, it were the investment grade corporate bonds that signalled the turnaround in yields spreading to TLT next. Given such a constellation, the dollar‘s appeal is taking a dive as the bond market gets its reprieve. When nominal yields retreat while inflation (and inflation expectations) keep rising, real rates decline, and that leads to dollar‘s decline.
Wednesday, April 07, 2021
S&P 500 Fireworks and Gold Going Stronger / Stock-Markets / Financial Markets 2021
By: Monica_Kingsley
Bullish run in stocks is on, driven by tech gains and value swinging higher as well. Throughout the markets, risk-on has been making a return as long-dated Treasury yields retreated, dollar fell and commodities continue their bullish flag formation. As I have tweeted on Thursday, it were the investment grade corporate bonds that signalled the turnaround in yields spreading to TLT next. Given such a constellation, the dollar‘s appeal is taking a dive as the bond market gets its reprieve. When nominal yields retreat while inflation (and inflation expectations) keep rising, real rates decline, and that leads to dollar‘s decline.
Stocks are more focused on the tidal wave of liquidity rather than the tax increases that follow behind. So far, it‘s still reflation – tame inflation expectations given the avalanche of fresh money, real economy slowly but surely heating up (non-farm payrolls beat expectations on Friday), and not about the long-term consequences of tax hikes:
(…) Reduction in economic activity, unproductive moves to outset the effects, decrease in potential GDP? Remember the time proven truth that whatever the percentage rate, the government always takes in less than 20% GDP in taxes. The only question is the degree of distortions that the tax rate spawns.
And as the falling yields were embraced by tech with open arms, the sector‘s leadership in the S&P 500 upswing is back. As you‘ll see further on, the market breadth isn‘t pitiful either – slight non-confirmation yes, but I am looking for it to be gradually resolved with yet another price upswing, and that means more open profits (that‘s 7 winning stock market 2021 trades in a row).
Tuesday, April 06, 2021
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns / Stock-Markets / Financial Markets 2021
By: Chris_Vermeulen
The recent news of Hedge Fund and other institutional crisis events has opened many eyes as investors and traders realize the post-2008-09 global market credit bubble has extended well beyond what many people may realize. Recent news that China offered a “deferment” for Chinese corporations and state-run enterprises content with shadow banking credit/debt issues at a time when China is tightening monetary policy shows that a process, like the 2008 Lehman incident, may be setting up where institutional level credit/debt liabilities ripple through the global markets as global central banks attempt to reign in monetary policies.
This process is not likely to happen suddenly though. If this type of contraction in global monetary policy takes place, resulting in increased pressures to contain excessive credit/debt functions in the markets, then we believe the process may result in an extended 9 to 16+ months of “hit-and-miss” events leading up to a potentially bigger event. The Archegos Fund forced unwinding of trades hit the markets recently as a wake-up call. Prior to the Archegos event, the Greensill Capital collapse shocked the global markets because of the size and scope of this failure. Now, we see Credit Suisse issuing warnings that Q1 earnings may have taken a big hit because of exposure to the Greensill and Archegos assets – which is leading to Credit Suisse attempting to put the Gupta Trading Unit into insolvency.
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Tuesday, April 06, 2021
Stock Market Pushing Higher / Stock-Markets / Stock Market 2021
By: Andre_Gratian
Current Position of the Market
SPX Long-term trend: There is some evidence that we are still in the bull market which started in 2009 and which could continue into the first half of 2021 before major cycles take over and it comes to an end.
SPX Intermediate trend: SPX is starting on the next phase of its intermediate uptrend.
Analysis of the short-term trend is done daily with the help of hourly charts. They are important adjuncts to the analysis of daily and weekly charts which determine longer market trends.
Monday, April 05, 2021
Stocks All Time Highs and Gold Double Bottom / Stock-Markets / Financial Markets 2021
By: Monica_Kingsley
Bullish run in stocks that lost steam before the close – does that qualify as a reversal? Given the other moves such as in the Dow Industrials, Russell 2000 and emerging markets, it‘s unlikely that the S&P 500 met more than a temporary setback. Just look at the rush into risk-on assets as an immediate reaction to the infrastructure and taxation plans – see the high yield corporate bonds moving higher (and this time also investment grade corporate bonds finally) as long-dated Treasuries keep losing ground, and the dollar noticeably wavered.
Yes, emerging worries about how this will be all paid for – not that an ideological challenge to modern monetary theory would be gaining any traction, but rather what would be the (quite predictable) effect of steep tax increases? Reduction in economic activity, unproductive moves to outset the effects, decrease in potential GDP? Remember the time proven truth that whatever the percentage rate, the government always takes in less than 20% GDP in taxes. The only question is the degree of distortions that the tax rate spawns.
Sunday, April 04, 2021
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme / Stock-Markets / Stock Market 2021
By: EWI
By Steven Hochberg : Penny stocks are an investment vehicle that really has garnered the attention and speculation of investors in early 2021. They're plunging headlong into off-exchange shares.
I remember back when I started in the early 1980s at Merrill Lynch, there was a guy that walked in the office and he had pieces of paper that were pink, and I didn't know what they were.
I was 23 years old, just starting out. I went over to him and said, "What are you looking at?" And he turned to me and he said, "Son, this is your road to riches right here." And then he was looking at the OTC bulletin board pink sheets of these off-penny stocks.
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Sunday, April 04, 2021
Should Stock Markets Fear Inflation or Deflation? / Stock-Markets / Stock Market 2021
By: EWI
How about both.
You can't go ten minutes on financial media these days without coming across a reference to inflation. That is, consumer price inflation to be more exact -- the measurement of changes in the prices of consumer goods and services that the entire world has been hoodwinked by central banks into thinking is the definition of inflation. The proper definition of inflation is the expansion of money and credit in an economy. On that definition, most major economies have been experiencing high inflation for decades.
Sigh, nevertheless, the focus for the markets at this moment is on a potential rise in consumer price inflation. The general underlying narrative from conventional analysts is that this is a good thing for markets because it is preferable to consumer price deflation. But is it?
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Saturday, April 03, 2021
Dow Stock Market Trend Forecast 2021 / Stock-Markets / Stock Market 2021
By: Nadeem_Walayat
Stocks Bear Market / Crash Indicator (CI18) - Current Risk is VERY LOW. The Crash Indicator is one of the neural nets I am working on as my AI takes baby steps into understanding how to interpret the stock market. It's task is to state the current risk of a bear market or crash being imminent i.e. within the next week or so. So an independant indicator that acts as a warning to HEDGE stock portfolios ahead of a high probability declines in the market. Where my preferred hedging tool is to go short stock index futures so as to capitalise on any drop delivering fresh funds to buy more AI stocks at deep discounts just as I did during March 2020. The last time this indicator triggered a warning was late February, so it is not a trading indicator but instead a Hedge your portfolio warning indicator.
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Saturday, April 03, 2021
Stocks, Gold and the Troubling Yields / Stock-Markets / Stock Market 2021
By: Monica_Kingsley
Yesterday‘s consolidation in stocks was a bullish one, and the S&P 500 upswing has good prospects of proceeding unimpeded. Strange but true if you consider that also a plan to considerably raise taxes would be announced today, so as to help pay for the stimulus wave. The bond markets are calmly overlooking that so far, enabling the run to the 4,000 mark.
And it still appears a question of time. Inflation isn‘t yet biting (forget about the German CPI data for now), fresh money keeps hitting the markets, and Archegos is about to become a distant memory. Stocks seem immune to the rising yields spell at the moment, meaning that value trades can remain at elevated levels while technology is stuck in no man‘s land and defensives are consolidating recent sharp gains (consolidating until the rising yields come back with vengeance).
And there is little reason given the Fed‘s stance why they shouldn‘t. Much of the marketplace is buying into the transitory inflation story, and inflation expectations aren‘t yet running too hot. As the economic growth is stronger than current or future inflation, we‘re still at a good stage in the inflation cycle – everyone benefits and no one pays.
Friday, April 02, 2021
Markets, Mayhem and Elliott Waves / Stock-Markets / Financial Markets 2021
By: EWI
Dear reader,
We are one year into the bull market that began in March 2020 -- and 12 years into the bigger bull market than began in early 2009.
You are probably getting anxious -- what's next for stocks, interest rates, gold and other commodities?
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Friday, April 02, 2021
Stock Market Support Near $14,358 On Transportation Index Suggests Rally Will Continue / Stock-Markets / Stock Market 2021
By: Chris_Vermeulen
An interesting Fibonacci Measured Move pattern has set up in the Transportation Index (TRAN) recently. The Transportation Index is an important component of the future US economic expectations. As the Transportation Index rises, one could assume greater economic activity is expected in the near-term 3 to 6+ future months. As the Transportation Index declines, one could assume weaker economic activity is expected in the near-term 3 to 6+ future months. My research team and I watch the TRAN as a type of confirming indicator for US major index and sector trends. When we see the TRAN rising sharply, we can often assume various US sector trends will also move higher.
The Transportation Index Daily chart below shows two key elements we find interesting. The first RED price range on this chart represents a 100% Fibonacci Measured Price move from the early November 2020 bottom to the mid-January 2021 peak. If we extend that same range to the early February lows, we see a major support level exists near $14,358 (a full 100% Fibonacci Measured Price move). The TRAN price has recently broken above this level and we believe this support level will likely hold and prompt another moderate rally attempt above $14,750.
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Thursday, April 01, 2021
How To Spot Market Boom and Bust Cycles / Stock-Markets / Financial Markets 2021
By: Chris_Vermeulen
One of the most important aspects of trading is being able to properly identify major market cycles and trends. The markets will typically move between four separate stages: Bottoming/Basing, Rallying, Topping/Distribution, and Bearish Trending. Each of these phases of market trends is often associated with various degrees of market segment trending as well. For example, one of the most telling phrases of when the stock market is nearing an eventual Topping/Distribution phase is when the housing market gets super-heated. Yet, one of the most difficult aspects of this Excess Phase rally trend is that it can last many months or years, and usually longer than many people expect.
Until Gold Really Starts To Rally, Expect A Continued Rally In The Stock Market
When an Excess Phase rally is taking place in the stock market, we expect to see the Lumber vs. Gold ratio moving higher and typically see the RSI indicator stay above 50. Demand for lumber, a commodity necessary for building, remodeling, and other consumer essential spending, translates well as an economic barometer for big-ticket consumer spending. Extreme peaks in this ratio can often warn of a pending shift in consumer spending and how the stock market reacts to an Excess Phase Peak. Let’s take a look at some of the historical reference points on this longer-term Weekly Lumber vs. Gold chart below.
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Thursday, April 01, 2021
What Could Slay the Stock & Gold Bulls / Stock-Markets / Financial Markets 2021
By: Monica_Kingsley
Put/call ratio didn‘t lie, and the anticipated S&P 500 upswing came on Friday – fireworks till the closing bell. Starting on Thursday, with the rising yields dynamic sending value stocks higher – and this time technology didn‘t stand in the way. What an understatement given the strong Friday sectoral showing, acocmpanied by the defensives swinging higher as well. And that‘s the characterization of the stock market rise – it‘s led by the defensive sectors with value stocks coming in close second now.
Still last week, the market confirmed my early Friday‘s take:
(…) While it‘s far from full steam ahead, it‘s a welcome sight that the reflation trade dynamic has returned, and that technology isn‘t standing in the way. I think we‘re on the doorstep of another upswing establishing itself, which would be apparent latest Monday. Credit markets support such a conclusion, and so does the premarket turn higher in commodities – yes, I am referring also to yesterday‘s renewed uptick in inflation expectation.
Neither running out of control, nor declaring the inflation scare (as some might term it but not me, for I view the markets as transitioning to a higher inflation environment) as over, inflation isn‘t yet strong enough to break the bull run, where both stocks and commodities benefit. It isn‘t yet forcing the Fed‘s hand enough, but look for it to change – we got a slight preview in the recent emergency support withdrawal and taper entertainment talking points, however distant from today‘s situation.
Thursday, April 01, 2021
Fed: “We’re Not Going to Take This Punchbowl Away” / Stock-Markets / Quantitative Easing
By: MoneyMetals
Precious metals markets are struggling against the headwind of a rising U.S. dollar this week.
The dollar index broke out to a four-month high on Thursday. Neither a much-awaited fall in bond yields nor dovish remarks from Federal Reserve officials dissuaded currency traders from buying Greenbacks and selling other fiat currencies.
Commodities and precious metals markets also saw some selling.
Despite choppy trading in metals markets so far in 2021, intense demand for coins, bars, and rounds continues to strain supply chains in the bullion market. Some mints and dealers are simply unable to deliver product to their customers in a timely manner.
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Tuesday, March 30, 2021
Stock Market Bullish Trend Continues / Stock-Markets / Stock Market 2021
By: Andre_Gratian
Current Position of the Market
SPX Long-term trend: There is some evidence that we are still in the bull market which started in 2009 and which could continue into the first half of 2021 before major cycles take over and it comes to an end.
SPX Intermediate trend: SPX is starting on the next phase of its intermediate uptrend.
Analysis of the short-term trend is done daily with the help of hourly charts. They are important adjuncts to the analysis of daily and weekly charts which determine longer market trends.
Monday, March 29, 2021
Stocks Bear Market / Crash Indicator (CI18) / Stock-Markets / Stock Market 2021
By: Nadeem_Walayat
Current Risk is VERY LOW. The Crash Indicator is one of the neural nets I am working on as my AI takes baby steps into understanding how to interpret the stock market. It's task is to state the current risk of a bear market or crash being imminent i.e. within the next week or so. So an independant indicator that acts as a warning to HEDGE stock portfolios ahead of a high probability declines in the market. Where my preferred hedging tool is to go short stock index futures so as to capitalise on any drop delivering fresh funds to buy more AI stocks at deep discounts just as I did during March 2020. The last time this indicator triggered a warning was late February, so it is not a trading indicator but instead a Hedge your portfolio warning indicator.
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Monday, March 29, 2021
Stock Market Risk-off Is Back Again / Stock-Markets / Stock Market 2021
By: Monica_Kingsley
Stocks reversed yesterday, and the close below 3,900 indicates short-term weakness instead of muddling through in a tight range. Especially the sectoral reaction to still retreating yields, is worrying. Yesterday‘s session means a reality check for prior reasonable expectations:
(…) The index is likely to advance, but the engine is going to be tech this time – not value stocks. I view this as a deceptive, fake strength in the bull market leadership passing over to value inevitably next. That‘s why I expect the S&P 500 advance to unfold still, a bit rockier than it could have been otherwise.
Tech faltered yesterday, and neither the other sectors were convincing. Rotation within stocks didn‘t work yesterday or the day before, and that‘s short-term concerning for the stock market bull health – as in, the path ahead would be truly rockier, and accompanied by brief, sharp selloffs such as the one bringing S&P 500 futures to 3,865 moments ago. The bull market isn‘t though over by a long shot – all we‘re going through is a recalibration of the rising inflation – I still stand by my year end call for $SPX at 4200.
It‘s commodities that are under the greatest pressure now, and the copper and oil signals doesn‘t bode well for the immediate future. These are likely starting consolidation of post-Nov 2020 sharp gains – they are no longer frontrunning inflation expectations. This has also consequences for silver, which is more vulnerable here than the yellow metal now.
Sunday, March 28, 2021
How to Stop Being Scared or Shaken Out Of Winning Trades / Stock-Markets / Stock Index Trading
By: Chris_Vermeulen
The markets really frightened a lot of people in the last month. We’ve received lots of emails and comments from people wondering what’s happening in the markets and why the deeper downtrend didn’t prompt new trade triggers. Well, the quick answer is “this downtrend did prompt new BAN trade triggers and this pullback is still quite mild compared to historical examples”. Allow me to explain my thinking.
The recent FOMC meeting as well as the expiration of the future contracts usually prompts some broad market concerns. Many professional traders refuse to trade over the 7+ days near an FOMC meeting – the volatility levels are usually much higher and this can throw some trading strategies into chaos. Our BAN Trader Pro strategy handles volatility quite well most of the time.
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Sunday, March 28, 2021
Investors, Speculators, Gamblers, Instigators / Stock-Markets / Financial Markets 2021
By: Kelsey_Williams
Nowadays, it seems that anyone who owns anything fancies themselves to be an investor. However, does buying a fractional unit of bitcoin in an online trading account qualify someone as an investor?
Are fanciful dreams of striking it rich by running with the social media herd the foundation of fundamental investing? Maybe there is more to it than that. Let’s take a look.
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Sunday, March 28, 2021
Why Retreating Yields Don‘t Lift All Market Boats / Stock-Markets / Financial Markets 2021
By: Monica_Kingsley
Stocks declined but won‘t they run higher next? Tuesday‘s downswing changed precious little, and the Congressional testimony was a non-event. The key happening was in long-dated Treasuries, which rose yet again – the much awaited rebound is here, and brings consequences to quite a few S&P 500 sectors.
The index is likely to advance, but the engine is going to be tech this time – not value stocks. I view this as a deceptive, fake strength in the bull market leadership passing over to value inevitably next. That‘s why I expect the S&P 500 advance to unfold still, a bit rockier than it could have been otherwise. This will hold true for as long as TLT is at least somewhat rising:
(…) technology would recover some of the lost ground on rates stabilization. ...the $UST10Y move has been a very sharp one, more than tripling from the Aug 2020 lows.
Technology though declined yesterday, and so did value stocks. Many markets went through selloffs yesterday, among commodities most notably oil. While nothing has substantially changed, we got a serious whiff of risk-off environment, pertaining precious metals too.