Analysis Topic: Stock & Financial Markets
The analysis published under this topic are as follows.
Monday, March 07, 2022
Stock Market Peculiar Reversal / Stock-Markets / Stock Market 2022
By: Monica_Kingsley
S&P 500 recovered most of the intraday downside, and in spite of value driving the upswing, there is something odd about it. Tech barely moved higher during the day, and the heavyweights continue being beaten similarly to biotech compared to the rest of healthcare. The key oddity though was in the risk-off posture in bonds, and the Treasuries upswing that Nasdaq failed to get inspired with.
If TLT has a message to drive home after the latest Powell pronouncements, it‘s that the odds of a 50bp rate hike in Mar (virtual certainty less than two weeks ago, went down considerably) – it‘s almost a coin toss now, and as the FOMC time approaches, the Fed would probably grow more cautious (read dovish and not hawkish) in its assessments, no matter the commodities appreciation or supply chains status. Yes, neither of these, nor inflation is going away before the year‘s end – they are here to stay for a long time to come.
Looking at the events of late, I have to dial back the stock market outlook when it comes to the degree of appreciation till 2022 is over – I wouldn‘t be surprised to see the S&P 500 to retreat slightly vs. the Jan 2022 open. Yes, not even the better 2H 2022 prospects would erase the preceding setback.
Sunday, March 06, 2022
"Shooting Stars" of the Stock Market: "Don’t Be Fooled by This" / Stock-Markets / Stock Market 2022
By: EWI
"A funny thing happened on the way to the revolution"
A meme stock has been defined as “the shares of a company that have gained a cult-like following online and through social media platforms.”
This “following” is largely comprised of novice investors who hope to make a quick profit. You may remember two well-publicized examples of meme stocks back in 2021: Gamestop and AMC Entertainment. There have been others.
Well, Robinhood Markets has been described as “the brokerage behind the meme stock revolution.”
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Sunday, March 06, 2022
S&P 500 At Tipping Point To Start A Stocks Bear Market / Stock-Markets / Stock Market 2022
By: Chris_Vermeulen
Is a bear market on the way? My research suggests the downward sloping trend line (LIGHT ORANGE in the Daily/Weekly SPY chart below) may continue to act as solid resistance – possibly prompting a further breakdown in the markets for US major indexes.
As we’ve seen recently, news and other unexpected events prompt very large price volatility events in the US major indexes. For example, the VIX recently rose above 30 again, which shows volatility levels are currently 3x higher than normal levels.
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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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Wednesday, March 02, 2022
See what's next for Europe and US WAR Markets / Stock-Markets / Financial Markets 2022
By: EWI
Hi Reader,
You are probably wondering what war in Ukraine means for the markets. Instead of trying to deconstruct a never-ending barrage of mostly useless information, you can let our friends at Elliott Wave International help.
Now through March 7, they are offering you practical, objective answers in two events running concurrently:
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Tuesday, March 01, 2022
Russia Sanctions Puts Global Financial System on the Brink / Stock-Markets / Financial Crisis 2022
By: MoneyMetals
The global financial system is on the brink of being thrown into chaos.The United States and Europe moved to target Russian central bank reserves and sever the country’s banking system from the SWIFT global financial network.
It is the financial equivalent of the nuclear option – something the Biden administration had explicitly declined to invoke last week before abruptly announcing the move on Saturday.
Moscow considers it to be an act of war. An increasingly bellicose Russian President Vladimir Putin could retaliate against the U.S. and its allies in a number of ways, including cutting off energy supplies, launching cyber-attacks on financial institutions, and further partnering with China to create alternative payments platforms that challenge U.S. dollar hegemony. Read full article... Read full article...
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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Friday, February 25, 2022
Consumer Retail May Suffer A -60% Collapse, Housing May Contract Faster Than Expected / Stock-Markets / Financial Crisis 2022
By: Chris_Vermeulen
I discussed the potential for the invasion into Ukraine with a friend over the past few days and how this new war may change the global economy. We ended up discussing the Invasion of Kuwait that took place in August 1990. At that time, as soon as the Invasion of Kuwait started, consumers almost immediately changed their spending and financial habits.
Suddenly, people stopped going out to dinner after work. They stopped going out for drinks. They also stopped playing computer games and spending money on most outside entertainment (movies and movie rentals – back in the Blockbuster days). In short, consumers became fascinated by the televised war and lost focus on almost everything else.
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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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Friday, February 18, 2022
Crypto Will Devour the Stock Market / Stock-Markets / cryptocurrency
By: Stephen_McBride
Longtime RiskHedge readers know crypto is one of the best moneymaking opportunities in the world. Cryptos like Ethereum (ETH) have outperformed even the hottest stocks by 10X in the past few years.
And we’re still only in the first inning of this opportunity. For example, did you know Apple (AAPL) is larger than the entire crypto market?
This fact alone makes my big call sound totally absurd…
Crypto will devour the stock market.
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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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Tuesday, February 15, 2022
Hot New Inflation Reading Spotlights Fed Failures / Stock-Markets / Inflation
By: MoneyMetals
Another hotter than expected inflation report jolted markets this week.
On Thursday, the Labor Department released the latest Consumer Price Index report. The CPI surged 7.5% in January from a year earlier. That exceeded most forecasts and marked a new four-decade high for consumer price increases. Brian Cheung of Yahoo Finance gives his take on the situation:
Brian Cheung: Price’s (are) rising in the United States across the board by 0.6% on a month-over-month basis. If you index it over a year-over-year period, 7.5% was the growth that we had seen in the report. That is well above the Street's estimates of 7.3% and continues to ratchet up. We've seen Joe Biden talk very frequently, lately, anytime he has the podium about the impact of inflation on Americans. That's because this is becoming a huge and already is becoming a huge political issue for him. Now, of course, all eyes are not just on the White House, in Congress where they engineer fiscal policy, from the Federal Reserve as well -- where the extraordinary monetary stimulus has obviously led to some sort of demand push that is leading to inflation that is not fading as fast as Federal Reserve officials had originally hoped or messaged in the beginning of 2021. That's going to be a very interesting story as we get to that mid-March meeting where the Fed is expected to start raising rates.
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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