Category: Stock Market 2022
The analysis published under this category are as follows.
Friday, March 04, 2022
Stock Market Calm In the Eye of the Inflation Storm / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
A quick recap on the state of play (saving time by using existing charts) in terms of my trend expectations as of September 2021 for the Dow to correct form early January to at least Mid February, which my CI18 Switch of 5th Dec deepened somewhat.
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Tuesday, March 01, 2022
Told You, Stock Market Risk On / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 erased opening downside, not unexpectedly. Markets say we‘ve turned the corner, and while the medium-term correction isn‘t over, we‘re going higher for now. The tired performance in credit markets suggests that the pace of the upswing would indeed likely slow, but the dips are being bought – even the 4,300 overnight level held unchallenged.
VIX is slowly calming down, and it wouldn‘t be a one-way ride. I hate to say it, but we‘re trading closer to the more complacent end of the volatility spectrum – that‘s though in line with my assumption of toned down price appreciation expectations that I discussed on Sunday and yesterday:
(…) While we made local lows on Thursday after all, the upside momentum is likely to slow down next – this week would bring a consolidation within a very headline sensitive environment. It‘s looking good for the bulls at the moment – till the dynamic of events beyond markets changes.
Inflation isn‘t wavering, and I‘m not looking for its meaningful deceleration given the events since Thursday, no. Friday is likely to mark a buying opportunity beyond oil and copper – these longs have very good prospects. Another part of the S&P 500 upswing explanation were the still fine fresh orders data – while the real economy has noticeably decelerated (and Q1 GDP growth would be underwhelming), solid figures would return in the latter quarters of 2022. That‘s also behind the gold downswing on Friday, which hadn‘t been confirmed by the miners – the very bright future ahead for precious metals is undisputable. And the same goes for crude oil as oil stocks foretell – the fresh long crude trade together with long S&P 500 one, are both solidly in the black already.
Monday, February 28, 2022
Stocks: Why This "Trend Following" Indicator is Worth Watching / Stock-Markets / Stock Market 2022
By: EWI
This "is compatible with a stock market that has further to decline"
Large Speculators are a sector of traders monitored by the Commodity Futures Trading Commission and are comprised mainly of hedge fund managers and trend followers.
History shows that this group of traders is usually wrong at key market turns.
The Commercials, which you might call the "smart money," is another sector of traders monitored by the CFTC. They usually take positions opposite that of Large Speculators and are usually right.
This indicator is especially useful when the positions that Large Speculators and Commercials have established reach extremes at the same time a market's Elliott wave pattern suggests a trend turn is nigh.
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Thursday, February 24, 2022
Stock Market More Selling Begins / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 reprieve that wasn‘t – the buyers didn‘t arrive, and the overnight military action sparking serious asset moves, shows that buying the dip would have been a bad idea. And it still is. Risk-on assets are likely to suffer, and I‘m not looking for a sharp, V-shaped rebound. The partial retracement seen in cryptos wouldn‘t translate to much upside in paper assets – it will likely be sold into as the bottom would take time to form. The safe haven premium seen in precious metals, crude oil and other real assets would ebb and flow, but a higher base has been established. The world has changed overnight, and recognition thereof is still pending.
I think it‘s clear why I had been derisking as much as possible, wary of volatility both ways in paper assets, and betting instead on a mix of real assets. This has been hugely paying off to subscribers and readers likewise favoring gold and crude oil with some copper added for good measure.
Monday, February 21, 2022
Dow Max Drawdown Bear Stock Market 2022 - Accumulating Deviations from the Highs / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Dear Reader
Did you get a good heads up warning of the BEAR MARKETS current down phase BEFORE it began?
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Monday, February 21, 2022
Why the "60 / 40 Balance" May Be Hazardous to Your Stocks Portfolio / Stock-Markets / Stock Market 2022
By: EWI
Notice the similar pattern between these two bond charts
Financial advisors have long advocated a mix of 60% stocks / 40% bonds to cushion portfolios from downturns in the stock market.
The thinking is that stocks go up in the long-term, hence, that's where investors should allocate the most. At the same time, advisors acknowledge that stock prices can sometimes go down so "less risky" bonds will provide at least some protection.
The problem with this investment strategy is that bonds can go into bear markets too. Moreover, they can do so at the same time as stocks.
Let's review what happened during the Great Depression of the early 1930s. Here's a chart and commentary from Robert Prechter's 2021 Last Chance to Conquer the Crash:
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Saturday, February 19, 2022
Dow Stock Market Expected Max Drawdown 2022 / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
My timely analysis (HOW TO SUCCESSFULLY INVEST IN STOCKS During 2022 and Beyond) that laid the ground work for how to invest during the anticipated waves of deep deviations from the highs in each of the stocks one by one that concluded in the following table of how low I expected each of the stocks to trade down to as a guide to where to target he bulk of ones planned buying in favour of those stocks that presented the greatest low to high potential price move.
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Friday, February 18, 2022
Stock Market Trend Forecast Current State / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
My timely analysis (HOW TO SUCCESSFULLY INVEST IN STOCKS During 2022 and Beyond) that laid the ground work for how to invest during the anticipated waves of deep deviations from the highs in each of the stocks one by one that concluded in the following table of how low I expected each of the stocks to trade down to as a guide to where to target he bulk of ones planned buying in favour of those stocks that presented the greatest low to high potential price move.
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Thursday, February 17, 2022
Stock Market Stumbling Again / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 rebound goes on reflexively, but stormy clouds are gathering – I‘m looking for the bears to reassert themselves over the next couple of days latest. The credit markets posture is far from raging risk-on even though select commodities are recovering (what else to expect in a secular commodities bull) and precious metals suffered a modest setback (not a reversal though). Crypto recovery is nodding towards the risk-on upturn that is though likely to get checked soon.
It‘s great that tech was the driver of yesterday‘s S&P 500 upswing, but for how long would it keep leadership now that attention is shifting back towards inflation. Yesterday I wrote that:
(...) rebound looks approaching as stocks might lead bonds in the risk appetite. When the East European tensions get dialed down, S&P 500 can be counted on to lead, probably more so when it comes to value than tech. That‘s why the tech participation is key as it would make up for the evaporating risk premium in energy. Or precious metals – these are likely to rise once again when the spotlight shifts to the inadequacy of Fed‘s tightening in the inflation fight.
So far the stock market advance hasn‘t met a brick wall, but value upswing has been sold into (unlike tech‘s). Energy stocks lost, but are likely to come back – and the next microrotation might not be powerful enough to carry S&P 500 higher. Anyway without a HYG upswing, stock bulls are facing stiff headwinds.
Wednesday, February 16, 2022
Stock Market Mean Reversion / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 refused further downside yesterday, and while credit markets didn‘t move much, rebound looks approaching as stocks might lead bonds in the risk appetite. When the East European tensions get dialed down, S&P 500 can be counted on to lead, probably more so when it comes to value than tech. That‘s why the tech participation is key as it would make up for the evaporating risk premium in energy. Or precious metals – these are likely to rise once again when the spotlight shifts to the inadequacy of Fed‘s tightening in the inflation fight.
For now, the war drums took the limelight away, but don‘t count on gold, silver or oil correcting significantly and lastingly. Cryptos are supporting the return of risk-on as the touted war just isn‘t happening either today or tomorrow, and market participants are dialing back the panicky bets. That‘s why Treasuries and tech movements are so key these days – copper trading shows that we‘re in for paring back of the fire sales. I can‘t call it a full fledged stock market reversal, not yet.
Wednesday, February 16, 2022
Stocks Fall as Gold and Oil Jumps Amid Tension Over Ukraine – FED / Stock-Markets / Stock Market 2022
By: Chris_Vermeulen
The FED has made it very clear that it will raise its benchmark interest rate, the federal funds rate. This could have severe consequences and even lead to a financial crisis. They are too far behind the curve and will be labeled a major policy error in the future, most likely. They have put themselves in a situation where they are now their own hostage. They need more leadership to describe what a soft landing is going to look like. They have been too slow to act, and now they are going too fast. The “Powell Put” has now been put out to pasture.
We believe that the FED will make more rate hikes than they have announced. Goldman Sachs thinks there will be four 25-basis-point increases in the federal funds rate in 2022. Jamie Dimon, CEO of JPMorgan Chase, said, “he wouldn’t be surprised if there were even more interest rate hikes than that in 2022. There’s a pretty good chance there will be more than four. There could be six or seven. I grew up in a world where Paul Volcker raised his rates 200 basis points on a Saturday night.”
Mr. James Bullard of the St. Louis FED spoke out in an arrogant tone that aggressive action is now required. The markets translated this to mean that the FED was going to call an emergency meeting as soon as this coming week to hike interest rates by no less than 50 basis points. This sent interest rates soaring and stock prices plummeting.
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Thursday, February 10, 2022
INVESTORS SEDUCED by CNBC and the STOCK CHARTS COMPLETELY MISS the BIG PICTURE! / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Dear Reader
Have you capitalised on the stock investing lemmings as they leapt off the investing cliff as I and many of my patrons / readers have been doing? If not why not?
For instance during the PANIC I have expanded my exposure to my select list of AI tech stocks form 22.7% to 36.9%.
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Thursday, February 10, 2022
Is it time to buy the Stock Market Dip? / Stock-Markets / Stock Market 2022
By: Stephen_McBride
By Justin Spittler : Is it time to buy the dip?After all, the stock market has been a sea of red lately.
Many former highflyers are down 50%... 60%... even 70%.
That has many investors salivating to buy “cheap” shares.
And I get it…
Buying the dip can be a great money-making strategy.
But I don’t think that’s the play here.
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Thursday, February 10, 2022
"A Stock Market Top for the Ages" Video / Stock-Markets / Stock Market 2022
By: EWI
Hi reader,
In late 2021, Elliott Wave International Founder and President Robert Prechter gave a rare, live presentation -- "A Stock Market Top for the Ages" -- at the annual New Orleans Investment Conference. The recording comprises Prechter's December 2021 Elliott Wave Theorist.
And now our friends at EWI are sharing it with you free ($99 value).
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Monday, February 07, 2022
INVESTORS SEDUCED BY STOCK CHARTS COMPLETELY MISS THE THE BIG PICTURE! / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
Given some of the comments I tend to get, (without mentioning anyone) illustrates that many people are STILL failing to fully grasp what we are dealing with here, the AI stocks are NOT NORMAL CORPORATIONS! THEY ARE ON AN EXPONENTIAL TREND TRAJECTORY!
And that exponential reality is QUANTUM AI!
Instead investors are getting seduced by standardised charts of every stock, throwing random names about just because they have fallen x%, perhaps buoyed by one of the more useful metrics, a low PE ratio to entertain thoughts of investing. All of which acts to dilute what is actually taking place as most investors focus is usually in the wrong place, permanently hinged on a few droplets of water that are the quarterly earnings reports at the expense of ignoring the ocean that is the Quantum AI mega-trend.
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Saturday, February 05, 2022
THE Stock Market VALUATION RESET Explained / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
The valuation reset is the rotation out of over valued growth stocks the pinnacle of which populate Cathy Wood's ARK funds and into under valued low PE usually dividend paying stocks as the following illustrates for the Russell Small cap stocks where high value stocks were bid up to to fever pitch ridiculous valuations whilst the value stocks were largely neglected by the market and as you can see we are a long way from the value reset from running it's course so this could play out for most of 2022. Where our AI tech stocks are concerned this translates into the higher the PE stocks facing greater downwards pressure for the likes of Nvidia, AMD, Microsoft and Amazon. Conversely the lower the PE stocks should see upwards pressure especially for dividend paying stocks such as IBM, Intel, GPN, LMT and so on into the biotech's.
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Wednesday, February 02, 2022
Stock Market Panic Selling - Can FED Engineer A Soft Landing For The Biggest Bubble We’ve Ever Seen? / Stock-Markets / Stock Market 2022
By: Chris_Vermeulen
Taking into account the Fed comments from last week, recently one of our technical analysts forecasted a correct S&P Index price range of $4348 to $4261. The market has since corrected to that level and is now bouncing.
With that said, investors have been panicking with the SPY ETF having an average outflow of more than $1 billion per day over the past ten days.
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Wednesday, February 02, 2022
Stock Market Rally Getting Long in the Tooth / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 recoverd the opening setback at 4,500, and the low volume behind the upswing coupled with credit market reversal shows that the push towards 4,600 is next – but it would be fraught with internal vulnerability. It‘s that value has welcomed the risk-on turn while tech barely prevented lower values – the bond reprieve won‘t last, and is providing more fuel behind the commodities push higher, and precious metals recovery.
The Kashkari effect and good ISM Manufacturing PMIs have worked fine, but the services data awaits. And I‘m looking at it to throw a spanner in the works, a modest one. For now, controlling the overall risk is key – fresh portfolio highs were achieved yesterday as new S&P 500 long profits were taken off the table – and commodities with precious metals are likely to do well in this extended (sticking out like a sore thumb) rally off oversold levels (in tech). The other key thought expressed in the linked tweet is that S&P 500 hasn‘t entered a bear market, that it hasn‘t rolled over to the downside for good. It‘s that I expect the return of the bears in the not too distant future, and a smoother sailing in 2H 2022.
Tuesday, February 01, 2022
The Quantum Entangled Stock Market / Stock-Markets / Stock Market 2022
By: Nadeem_Walayat
The FAANG stocks are entangled with one another, which is why the likes of Amazon is still holding up there with the likes of Apple and Microsoft. and why we don't tend to get many opportunities to accumulate in the FAANG stocks at deep discounts because to get an opportunity means we are going to have to wait for an opportunity in ALL of the FAANG+ stocks to materialise.
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Tuesday, February 01, 2022
Stock Market Sentiment Speaks: It's Time To Invest Based Upon Corporae Earnings / Companies / Stock Market 2022
By: Avi_Gilburt
We have all heard the phrase “earnings are the mother’s milk of stocks.” I believe the phrase was coined by Larry Kudlow. In fact, I have some commenters to my articles that claim that earnings are the only thing one needs to know about investing in the stock market.
But, is it true?
Bob Prechter has done some research into this topic, and has outlined some very interesting market history that flies in the face of the common perception regarding earnings: The Myth of Company Earnings and Stock Price
Are stocks driven by corporate earnings? In June 1991, The Wall Street Journal reported on a study by Goldman Sachs’ Barrie Wigmore, who found that “only 35% of stock price growth [in the 1980s] can be attributed to earnings and interest rates.” Wigmore concludes that all the rest is due simply to changing social attitudes toward holding stocks. Says the Journal, “[This] may have just blown a hole through this most cherished of Wall Street convictions.”
What about simply the trend of earnings versus the stock market? Well, since 1932, corporate profits have been down in 19 years. The Dow rose in 14 of those years. In 1973-74, the Dow fell 46% while earnings rose 47%. 12-month earnings peaked at the bear market low. Earnings do not drive stocks.
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