* Long-term perspective * The short-term picture * The Pound against other major currencies * Watch that gold! Long-term perspective Last October, I wrote an article entitled “British Pound Headed For Par, But Not Now”. The long-term case rested on the fact that the Pound, when measured against the Dollar, had completed a 30-year... READ MORE
DOW FLIRTS WITH 20K... Let's get this out of the way first. If you've been watching business TV, all they've been talking about is the Dow nearing the 20,000 level. Much to their dismay, it came close on Friday but couldn't... READ MORE
* The long-term equity trend is bullish, but watch carefully * Short-term technicals for equities * Short-term technicals for yields and bond prices * Short-term technicals for the Dollar Index, Gold and Commodities The post-election trends I am referring to in the title refer but are not limited to, the five series plotted in... READ MORE
10-YEAR TREASURY YIELD PULLS BACK ... After the steep ascent in Treasury bond yields since the November 8 election, it's not too surprising to them pulling back a bit. There are a couple of technical reasons for that. The daily bars in Chart 1 show the 10-Year Treasury Yield... READ MORE
DOW JONES AUTO INDEX IS BREAKING OUT... For the first time in a long time, auto stocks are showing market leadership. I first wrote about the group in a December 1 message about autos leading consumer cyclicals higher. They're doing that again today. Chart 1 shows the Dow... READ MORE
* Signs of short-term exhaustion * Watch those housing ETF’s * Shanghai is down, but is it out? Even bull markets need to pause for breath as profits are digested and doubts sown concerning the validity of the prevailing trend. We may have come to such a moment. Signs of short-term exhaustion... READ MORE
* Twenty thousand, a media point on the charts * The real 20,000 event * International markets that deserve a closer look Twenty thousand, a media point on the charts For some time, our friends in the media have been touting Dow 20,000 ($INDU) as if something magical is going to... READ MORE
ADX AND RSI LINES ISSUE WARNINGS... My last couple of messages have repeated the idea that the post-election stock rally looks stretched. Last Friday's message showed the stock/bond ratio, the value/growth ratio, and the transportation/utilities ratio also in overbought territory. Momentum and seasonal factors are... READ MORE
* Three steps and a stumble * Interest rates are now driving the US Dollar * Charts for the Euro, Yen and Swiss Franc continue to erode Three steps and a stumble The late great Edson Gould coined the term “Three Steps And A Stumble”. He was referring to his observation that when... READ MORE
STOCK/BOND RATIO IS OVERBOUGHT... Several market messages over the past couple of months used relative strength ratios to paint a more bullish picture of the stock market, and a more bearish picture for bonds. While those ratios have strengthened considerably, especially since the election, I'm a little... READ MORE
FED OFFERS SLIGHTLY STEEPER PATH FOR 2017... The Fed surprised no one today one by raising short-term rates by a quarter of a point. It did, however, offer a steeper path for rate hikes in 2017. That may have caught more attention. Bond yields climbed which boosted bank stocks initially.... READ MORE
* Some key averages showing signs of temporary exhaustion * Energy burnt out? * Defensives and interest sensitives looking more positive * What about those bonds? I have been bullish on the stock market for some time and in terms of the main trend I still am. I also council on focusing on the... READ MORE
POWERSHARES QQQ NEARS NEW RECORD... A lot has been made recently about domestic-oriented American businesses leading the market rally (like small caps, retailers, and transports to name a few). And how large tech stocks have gone from market leaders to market laggards. Technology companies derive nearly two-thirds of their earnings... READ MORE
* Using Gold as a barometer for commodity prices * Gold versus other precious metals * Gold and the stock market Earlier in the week I wrote an article pointing out the fact that the Gold price ($GOLD), technically speaking, had reached, what seemed to me, to be a critical technical point. That... READ MORE
EURO FALLS ON ECB... The ECB had some good and bad news for the Euro today. The ECB offered to extend its bond buying program for an additional nine months after next March. But it also announced that it was reducing the amount of bond purchases. The market interpreted the... READ MORE
AUTO PARTS INDEX TURNS UP... My message from last Thursday was headlined: "Autos Drive Cyclicals Higher". It showed an index of auto stocks achieving a bullish breakout led by GM and Ford. Auto parts are today's cyclical leaders. That shouldn't be surprising since they&... READ MORE
* Will the current short-term oversold level in Gold trigger a rally to reverse long-term bear signals? * Gold leads commodities * Gold breaks down against some commodities Will the current short-term oversold trigger a sufficient rally to reverse long-term bear signals? Earlier in the year $GOLD proved to be one of the... READ MORE
CONSUMER DISCRETIONARY SPDR SHOWS RELATIVE STRENGTH ... One of the signs of growing strength behind the post-election stock market rally is that it's being led higher by economically-sensitive stocks like cyclicals and industrials. [We'll deal with industrials shortly]. Chart 1 shows the Consumer Discretionary SPDR (XLY) finding... READ MORE
* A different way of looking at the VIX * What about global equities? * Sectors are largely pointing north * Are commodities about to break out? The market has been rising in an uninterrupted fashion since early November, on the back of a Trump election victory. The question naturally arises as to whether... READ MORE
OIL SPIKES ON OPEC CUT... The agreement by OPEC to cut oil production by 1.2 million barrels a day has pushed the price of crude $3 (7%) higher in today's trading. The spike in oil is giving a huge boost to energy stocks which are leading the... READ MORE
INDUSTRIAL METALS CONTINUE TO CLIMB... The huge rally in industrial (base) metals continues. Chart 1 shows the PowerShares DB Base Metals Fund (DBB) climbing to the highest level since mid-2015. The DBB reflects rising aluminum, copper, and zinc prices. Iron ore and steel prices are also surging in Chinese trading.... READ MORE
RETAILERS LEAD CYCLICALS TO NEW HIGHS... My message from last Monday wrote about apparel retailers leading retail stocks higher which were leading the cyclical sector higher. The same headline could be written again today. Chart 1 shows the Consumer Discretionary SPDR (XLY) rising above its August high to a new... READ MORE
CRUDE OIL CLIMBS ABOVE 50-DAY AVERAGE... Renewed optimism for an OPEC output cut has pushed crude oil 4% higher in today's trading and has given a big boost to energy shares and the rest of the stock market. Chart 1 shows WTIC Light Crude oil rising above its... READ MORE
* Subdued response to great housing numbers is a bullish sign * What does this mean for housing stocks? * Housing conclusion * Small cap big profits? Subdued response to great housing numbers is a bullish sign Sometimes very important developments for the market receive widespread attention, quickly experiencing a swing in sentiment as... READ MORE
TWO-YEAR TREASURY YIELD ALSO HITS NEW 2016 HIGH... Most recent attention has been focused on the surge in the 10-Year Treasury yield to the highest level since last December (middle line in Chart 1). That's based on expectations for stronger economic growth and higher inflation. It's... READ MORE
SOME TECHNOLOGY WINNINGS WENT INTO FINANCIALS... A lot is being made of the fact that technology stocks have underperformed the broader market since last Tuesday's election. I suggested last week that technology selling was most likely a rotation out of some expensive technology stocks (mainly in the Internet)... READ MORE
S&P RETAIL SPDR SURGES ... My last message on Thursday mentioned a rotation into discretionary sectors like retailers and out of defensive consumer staples. That rotation is looking even more impressive today as retail stocks are strong. Chart 1 shows the S&P Retail SPDR (XRT) surging nearly... READ MORE
* What’s the direction of the primary trend of interest rates? * What do the shorter-term maturities say? * Appraising the short-term technicals In early September, I wrote an article suggesting that things were beginning to fall in place for higher yields. Since then they have edged up a bit, but look... READ MORE
DOW THEORY LOOKS STRONG... Chart 1 shows the Dow Industrials trading at a new record high today. That's a positive sign. But so is the fact that the Dow Transports achieved a bullish breakout on Monday. That puts both Dow Averages in sync on the upside for the... READ MORE
STOCKS SURGE AFTER WEAK NIGHT... Today's strong stock market builds one surprise on top of another. The first surprise was a Trump victory. The second is today's sizable stock market gain. It was widely expected that a Trump victory would push stocks sharply lower. And it... READ MORE
* A brief synopsis of Dow Theory * Transports could be explosive * Was there anything wrong with Monday’s rally? * Market remains short-term oversold * Good looking ETF’s Monday's explosion in prices sent the Dow Transports well above their previous intermediate high. This price action confirms the buy signal already... READ MORE
FBI ANNOUNCEMENT CAUSES BIG RISK-ON DAY... The Sunday afternoon FBI announcement that it was ending its Hillary Clinton email investigation with no charges caused a huge risk- on trade the day before the presidential election. Stocks have surged as much as 2% around the world. A stronger dollar, and surging... READ MORE
* What’s happening at the margin? * Short-term technical position oversold…but * Gold breaks out against bonds * Dollar showing weakness What’s happening at the margin? Last week I wrote an upbeat article pointing out that the stock market was oversold on a near-term basis as it approached a bullish seasonal... READ MORE
LIFE INSURERS LEAD FINANCIALS HIGHER ... Rising bond yields continue to give a boost to financial stocks like life insurers. Bear in mind that premium income in insurance stocks is invested mostly in fixed income markets. Higher bond yields mean higher income. Life insurers are leading the financial sector higher today.... READ MORE
S&P 500 BREAKS SUPPORT AS VIX SURGES... Election jitters are taking a toll on stocks. Chart 1 shows the S&P 500 falling below its September/October lows to a four month low. All other major stock indexes are falling as well. That leaves the SPX in... READ MORE
MORE BOND CHARTS ... I've been writing about how the recent upturn in bond yields has been pushing bond prices lower (primarily due to rising commodity prices). Not all bond categories are falling at the same rate however. When inflationary pressures are starting to pull bond yields higher, longer... READ MORE
RISING COMMODITY PRICES ARE BOOSTING GLOBAL BOND YIELDS... I find it amusing listening to TV talking heads trying to explain why global bond yields have started to rise (pushing bond prices sharply lower). They don't seem to have noticed that commodity prices have risen more than 20% since... READ MORE
* Seasonals are bullish * Current condition of some short-term indicators * The bullish part of the year * Time to raise those beta glasses? The stock market has really been in a trading range for the last two years. At my bi-weekly webinar this week, I pointed out that several long-term indicators have... READ MORE
BOND YIELDS CONTINUE TO CLIMB... Chart 1 shows the 10-Year Treasury Yield climbing again today after finding support along its 200-day moving average. Rising yields are giving the usual lift to financial shares, banks and insurers in particular. Chart 2 shows the S&P Bank SPDR (KBE) trading at... READ MORE
POWERSHARES BASE METALS FUND JUMPS 2%... Base metal prices like iron ore and steel are seeing big gains in China. That strength is spilling over into aluminum, copper, nickel, and zinc. That's giving a big boost to global stocks tied to those commodities. Chart 1 shows the PowerShares... READ MORE