Analysis Topic: Stock & Financial Markets
The analysis published under this topic are as follows.Monday, April 26, 2021
See What’s Next for European Markets / Stock-Markets / Financial Markets 2021
Dear reader,
"Will it break above $1?" That’s the question millions of crypto watchers are asking now.
Dogecoin may be on your watch list, too. After all, its 9000%+ rally year-to-date is no longer “funny.” What started as a joke is now very serious.
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Sunday, April 25, 2021
SPX Stock Market Short Squeeze – Here Or Not? / Stock-Markets / Stock Market 2021
S&P 500 turned around at the open, and didn‘t look back. Is the selling over, have the markets turned the corner? Buy the dip looks to have won the day, VIX has been beaten back, and corporate credit markets scored strong gains. The benefit of the doubt would go with the bulls as the Russell 2000 and emerging markets joined in the buying spree. Heck, even the option traders turned more complacent again.
The table looks set for brighter days, but it‘s the odd performance in value (the reopening fireworks don‘t seem to go stale ever really) ignoring retreating yields, which the tech heavyweights strangely neither rejoiced. That reminds me of the dog that didn‘t bark story. I‘m thus looking for a daily consolidation of surprisingly easily gained ground without ruling out a weak downswing attempt – but it‘s the upside potential that‘s looking short-term limited here. The daily SPX chart doesn‘t give me confidence yet to declare this correction as not returning next week.
Nominal yields have again retreated a little, and inflation expectations are sending inconclusive messages – but don‘t forget that inflation is what the Fed ultimately wants. It just has to balance that with the Treasuries market not going into a tailspin – for now, mission accomplished, inflation expectations have peaked, move along, nothing to see here.
But the higher commodity prices are sending a clear message to the contrary – look for the PPI readings to be affecting CPI increasingly more. Markets aren‘t waiting for the Fed, and have been transitioning to a higher inflation environment already, even though the Fed sold the transitory talking points quite well – it would indeed be a 2022-3 story when inflation supported by the overheating job market would kick in. That‘s the context decreasing nominal yields should be interpreted in.
Sunday, April 25, 2021
Fiscal Guilt: What a Shift in Monetary Policy Portends for Investors / Stock-Markets / Financial Markets 2021
Sector expert Michael Ballanger describes how he is protecting his portfolio as political and financial fortunes begin to change.
To you from failing hands we throw
The torch; be yours to hold it high.
—from the poem "In Flanders Field;" 1915
I have a confession to make: I am reaching the end of my personal level of nonviolent tolerance when being forced to listen to non-elected "authorities" standing in front of TV cameras reading their "prepared notes" from teleprompters without the vaguest clue as to what they are talking about.
Worse still are the elected "representatives of the citizenry" of any country, state or province, standing in that very same spot ordering the populace to "stay indoors" while warning that the police have been instructed to issue citations (or arrest) those in violation of an order that has never been enacted into law.
Whether they are politicians or bankers or bureaucratic buffoons of questionable agenda, all of them should be gagged and bound and carted off to a facility of incarceration with zero chance of release back into the "general population." They all represent an ever-increasing threat to not only my sanity but also, and more importantly, to my personal liberty.
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Friday, April 23, 2021
This "Lopsided" Stock Market Ratio Is Sending a Clear Signal / Stock-Markets / Stock Market 2021
Investors always find ways to "rationalize" bearish or bullish stances
For a stock market investor who understands that markets are not random or chaotic but instead patterned, the most important information to know is the price pattern of the market in question.
For an Elliott wave investor, the task is even more defined. As Frost & Prechter's Wall Street classic book, Elliott Wave Principle, says:
The market's progression unfolds in waves. Waves are patterns of directional movement.
So, familiarity with the Elliott wave model for forecasting financial markets is a must.
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Friday, April 23, 2021
Stock Market Sentiment Speaks: Watch Out For The “Bear Market” / Stock-Markets / Stock Market 2021
Throughout the years I have been writing on Seeking Alpha, many readers have recognized that we have been quite accurate in our market prognostications, yet they have had a hard time understanding the lens through which I view the markets.
I want to first start by stating that in all the years I have been doing research and analysis into financial markets, I have not found a single form of analysis that provides market context as does Elliott Wave analysis. In fact, it was the reason I was so confident in my expectation that the market would exceed the 4000SPX region even though we were down in the 2200SPX region last year.
So, before I move into my discussion of a “bear market,” I wanted to take a moment to again reference the six-part series I wrote, which explains not only the application of my analysis methodology, but also provides you with the background and theory behind the methodology: https://www.elliottwavetrader.net/market-update/Elliott-Wave-Series-Part-1-201808184848063.html
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Thursday, April 22, 2021
Dow Stock Market Dow Trend Forecast Current State / Stock-Markets / Stock Market 2021
My trend forecast for 2021 as of the 8th of Feb analysis Dow Stock Market Trend Forecast 2021 is for a bull run to Dow 35k punctuated by a summer correction beginning early May as illustrated by the forecast graph for a gain of about 15% on the year.
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Tuesday, April 20, 2021
Stock Market Sentiment Speaks: You May Not Believe My 2021 Targets / Stock-Markets / Stock Market 2021
Ever since the market crash in February and March of 2020, so many investors, authors and analysts have been on high alert for the next shoe to drop.
In fact, I can no longer count how many articles (along with comments) I have read which have called this market one name or another, while looking for the next crash. While such descriptive name calling included a “bubble,” or “topping,” or having gone “too far too fast,” or “not supported by the fundamentals,” or having an “overly heated PE ratio,” it is clear that this rally has taken many by surprise, and many still do not believe in its ability to continue on further.
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Tuesday, April 20, 2021
Stock Market Phase Two Projection / Stock-Markets / Stock Market 2021
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 has completed the next phase of its intermediate uptrend and should correct.
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 19, 2021
8 Stock Market Indicators in 1: Here's the Message of the Panic/Euphoria Model / Stock-Markets / Stock Market 2021
Prior model extremes occurred in March 2000 and October 2007
Elliott Wave International has been providing market analysis for more than four decades -- which includes many bull/bear market cycles.
That said, the public's current market mindset -- especially among inexperienced investors -- is a reminder of the extremes surrounding the 2000 market top, and a few others.
For example, a February 27 MarketWatch headline said:
A new wave of fearless retail investors is ready to pour $170 billion into stocks ...
Also, according to an early February Deutsche Bank survey of online brokerage users, 61% are under 34 years of age and 45% are in their first year of investing.
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Sunday, April 18, 2021
State of the European Markets - DAX, FTSE, CAC, AEX, SMI, IBEX 35, S&P/MIB, Euro Stoxx 50, RTS / Stock-Markets / Stock Market 2021
Dear reader,
In many ways, over the past year Europe had it tougher than the rest.
And now, with the slow vaccine roll-out and calls for new lockdowns, things look shaky.
Despite all that, European stocks have powered on. The DAX even hit a record high!
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Saturday, April 17, 2021
Stocks and Bonds Inflationary Slingshot / Stock-Markets / Financial Markets 2021
Cost-push inflation could break out (and a note on gold)
Before beginning the post a little context is in order. We (NFTRH) anticipated the current pause in long-term Treasury yields (one indicator of inflation) because pro-inflation sentiment became over-done in March and was due for a cool down; so said a contrarian view. This post discussing the likelihood of more inflation to come is not written by a one-way bias booster. It’s important for credibility to make these distinctions from the herds running with the daily news cycle.
The short-term contrary sentiment situation against the inflation view began with the Bond King’s media-touted short of long-term Treasuries (i.e. expectation of higher yields), per one of our best macro tools…
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Friday, April 16, 2021
US Stocks Climb A “Wall Of Worry” To New Highs / Stock-Markets / Stock Market 2021
Low volume rallies have become a standard of trending recently. We see higher volume when volatility kicks in near areas of broad market volatility. Otherwise, we see lower volume trending push the prices higher recently in a “melt-up” type of mode.
Two recent standout events confirm this type of trending and volatility phases of the markets: (1) the September 2020 to early November 2020 (pre-US Election) rotation in price; and (2) the recent February 2021 to late March 2021 sideways price rotation related to the FOMC meeting/comments. Both of these events centered around external market components and prompted an extended period of price volatility related to uncertainty. After these events passed, price fell back into a low volume rally mode for many months, where most of the actual price gains happened.
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Friday, April 16, 2021
See what Anatomy of a Bursting Market Bubble looks like / Stock-Markets / Liquidity Bubble
Those who are familiar with the Elliott wave model for analyzing and forecasting financial markets know that a main trend takes the form of five waves.
Thus, when the fifth wave is complete, a trend in the opposite direction is set to begin.
Another insight into the Wave Principle that's relevant to the present discussion is that corrections often end at the terminus of the previous fourth wave of one lesser degree of trend.
If that sounds like a mouthful, hold on, you're about to see a market example that'll make it plain as day.
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Friday, April 16, 2021
Many Stock Market Sectors Are Primed For Another Breakout Rally – Are You? / Stock-Markets / Stock Market 2021
As we start moving into the Q1:2021 earnings season, we need to be aware of the risks associated with the volatility often associated with earnings data and unknowns. Nonetheless, there are other factors that appear to be present in current trends which suggest earnings may prompt a moderately strong upside breakout rally – again.
One key factor is that the US markets are already starting to price in forwarding expectations related to a reflation economy – a post-COVID acceleration in activity, consumer participation, and manufacturing. Secondarily, we must also consider the continued stimulus efforts, easy monetary policy from the US Fed, and the continued trending related to the 12+ month long COVID-19 recovery rally.
In some ways, any damage to the economy related to COVID-19 may have already happened well over 6+ months ago. Certainly, there are other issues we are still dealing with and recovering from, but the strength of the US economy since May/June of 2020 has been incredible. When we combine the strength of the economic recovery with the extended support provided by the US Fed and US government stimulus/policy efforts, we are left with only one conclusion: the markets will likely continue to rally until something stops this trend.
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Friday, April 16, 2021
Still a Bullish Fever in Stocks? / Stock-Markets / Stock Market 2021
S&P 500 went nowhere yesterday – just like the prior Monday, heavy buying into Friday‘s close met no follow-up the day after. After almost touching 16 to close the week, VIX peeked higher yesterday only to reverse back down. Nice try but if you look at the put/call ratio turning down simulatenously, the alarm bells are far from ringing.
The S&P 500 rise of late isn‘t without its good share of non-confirmations though. The ones seen in Russell 2000 and emerging markets got a fresh company in the corporate credit markets. No denying that the stock market is in a strong uptrend, but it got a bit too stretched vs. its 50-day moving average – a consolidation in short order would be a healthy move, but the CPI readings above expectations don‘t favor one today.
If you look at the put/call ratio again, its lows throughout Mar and Apr haven‘t been reaching the really exuberant levels of prior months, hinting at a less steep path of S&P 500 gains. And what about the volume print as stocks went about making new highs? Not encouraging either, and it‘s not that rising yields would be causing trouble:
Thursday, April 15, 2021
Stocks or Gold – Which Is in the Catbird Seat? / Stock-Markets / Financial Markets 2021
S&P 500 spurted higher after prior days of tiny gains. Still lining up the upper border of the Bollinger Bands on the daily chart, stocks keep defying gravity. But the corporate credit markets are sending a gentle warning sign as they failed to move higher in unison on Friday.
Given the Fed support and liquidity injections talked on Friday:
(…) the Powell bid is in, affecting „traditional“ sectoral dynamics of rotation. Value is probably about to feel the heat if you look at the very long lower knot in financials (XLF ETF) yesterday. Yes, this interest rate sensitive sector still rose in the face of long-dated Treasuries‘ gains. Needless to say, technology loved that, and its heavyweights ($NYFANG) keep driving the sector up. It looks to be a question of time before Tesla (TSLA) joins – Square (SQ) already did.
The spanner in the works proved to be long-dated Treasuries as these gave up all intraday gains, and closed in a non-bullish fashion. The retreat in rising yields is running into headwinds, much sooner than the 10-year one could reach the low 1.50% figure at least. Value stocks and cyclicals such as financials appear calling it out, and both rose on Friday – and so did industrials and technology, all without tech heavyweights‘ help. Utilities and consumer staples went mostly sideways, disregarding the danger of yields about to rise again.
Thursday, April 15, 2021
Time For A Stock Market Melt-Up / Stock-Markets / Stock Market 2021
While I cannot tell you with certainty that we are about to see a market melt-up, I can tell you that the setup is now in place to melt up to the 4400SPX region through the spring.
Before I go into my expectations, there are a few issues I would like to address, which seem to almost always come up in the comments section to my articles.
Many of you have taken strong exception to the fact that I really do not bother with the news. Your perspectives are often based upon your personal experience of seeing the markets move when news is announced. So, you assume that the substance of the news is always the driver of the market move. And, this makes you view my perspective as quite untenable.
So, allow me to explain my perspective in a bit more detail, and maybe you will begin to understand.
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Thursday, April 15, 2021
Stocks Bull Market Progression Now Shows Base Metal Strength / Stock-Markets / Metals & Mining
Sector performance within the present bull market has largely replicated an historical pattern. Over the past 12 years, the rise and eventual outperformance over the benchmark indexes (i.e. TSX and S&P 500), of specific industry groups has developed starting with technology and consumer discretionary sectors in 2009 and carrying through to the current sector of base metals.
The normal progression of performance in industry groups, beginning with a bear market low, through a gradual recovery and into a full bull market and then with a final cresting high, is illustrated in Chart 1.
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Wednesday, April 14, 2021
The SPY Is Nearing Resistance @ $410… What Is Next? / Stock-Markets / Stock Market 2021
My shorter-term analysis for the markets continues to stay Bullish and suggests the US reflation trade, the strengthening of the US and the global economy, and recovery from the COVID-19 restrictions will likely prompt a moderately strong upside price trend leading into at least mid Q2:2021. The recent strength of the US Dollar is helping to push capital into the US markets as foreign investors attempt to shift capital away from Emerging Market and currency weakness and the Treasury Yield rallies seem to have indicated a moderate warning related to global central banks attempting to front-run inflation concerns.
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Wednesday, April 14, 2021
The Curious Stock Market Staircase Rally / Stock-Markets / Stock Market 2021
Another day of tiny S&P 500 gains defying gravity, boosted by overnight price action. Well, liquidity overpowering junk corporate bonds opening with a bullish gap only to partially close it. With some credit market hints at deterioration present, the yen carry trade is getting a new lease on life today, and that‘s generally bullish for risk-on assets such as stocks – but not really for precious metals.
With all the Fed support, the Powell bid is in, affecting „traditional“ sectoral dynamics of rotation. Value is probably about to feel the heat if you look at the very long lower knot in financials (XLF ETF) yesterday. Yes, this interest rate sensitive sector still rose in the face of long-dated Treasuries‘ gains. Needless to say, technology loved that, and its heavyweights ($NYFANG) keep driving the sector up. It looks to be a question of time before Tesla (TSLA) joins – Square (SQ) already did.
The key question is the rotation‘s degree – now that the yields appear ready to retreat still a little more (the 10-year yield appears targeting the low 1.50% figure if not declining further), which is what technology anticipates even though utilities and consumer staples have been dragging their feet a little lately. But value stocks aren‘t selling off in the least (yet?). Is the TINA still strongly in effect when those stock market segments that could have been expected under more stringent monetary policy to be sold, aren‘t no more? Rising tide lifting really all boats – in stocks.