March 20, 2013
Stubborn Bull
 This market is tough to hold down for even a day or two. That’s bull market stuff. While many on the Street think a correction is justified, the bulls aren’t interested. I agree, a 3% t0 5% correction is overdue, but the momentum is on the side of the bulls. For one, new all-time highs in the DJIA, which is still used by the media as “the” benchmark for equities, is luring the public back into the market. For another, there is just a lot of institutional cash out there looking for a home in something that promises a return. The crisis in Cyprus appears to be just another speed bump in Europe’s drawn out effort to solve its sovereign debt woes. Recession is a bigger problem in that it makes it more difficult for the troubled euro-area countries to (more)…
March 19, 2013
Correction More Technical Than Cyprus-Related
Over the weekend, Cypriot lawmakers were instructed by euro-area finance ministers to raise 5.8 billion euros ($7.5 billion) from bank depositors in return for financial aid. Decisions will be made today how to spread the adverse impact on depositors. The Street’s doomsters welcomed the news to regurgitate all the paranoia that accompanied the fear mongering they spewed over the years as global economies struggled to recover from the Great Recession. Could such a levy on bank deposits occur here, they ask? Well, the doomsters were dead wrong about the U.S. economy, the euro, and the stock market over the last four years, denying scores of investors a chance to recoup monstrous bear market losses, so why listen now? If we are to target any good that came out of the Great Recession and near meltdown, it is that it rocked (more)…
March 18, 2013
How Quickly Will Bulls Pounce on Lower Prices?
The S&P 500 never had a chance of posting an all-time bull market high Friday and with the stock-index futures signaling a sharp drop at the open today, it won’t hit the high today either. Europe’s woes are back in the headlines, this time triggered by an unprecedented levy by Cyprus on bank deposits in an effort to raise 5.8 billion euros ($7.6 billion) demanded by euro-area finance ministers. It’s both the precedent and danger that what is happening in Cyprus will cause the same kind of run on banks in other countries that it has caused in Cyprus. Already the incident has caused borrowing costs in Italy a Spain to rise. The issue has yet to go before Cyprus’ parliament. I find it difficult to believe the euro-area ministers cannot tip toe through this minefield, having successfully coped with (more)…
March 15, 2013
New High for S&P 500 Today? Apple Finally Turning Up?
The S&P 500 is close to hitting a new all-time high. That will trigger yet another round of bold headlines in the news media. There is a chance the BIG money may use the excitement to do some selling, especially if stock prices jump sharply on the news. The S&P is a benchmark for institutional timers. A 3% to 5% correction s overdue, but the rush to buy stocks is escalating. Granted, the market has had a great run in four years, since year-end alone, but where else can invest their money. We are witnessing a mini-feeding frenzy, but this pales compared to what it can become, At some point, the market averages will go into a sideways trading pattern, but individual situations will sizzle. Small-cap stocks will soar, micro-cap stocks will surge. I think this is what awaits us (more)…
March 14, 2013
What Do Institutions Do When S&P 500 Hits an All-Time High?
The DJIA hit another all-time bull market high yesterday, up all of 5.22 points !! The broad-based S&P 500 hasn’t followed suit, but has only to rise 22 points to beat its October 11, 2007 intraday high. The hoopla accompanying headlines of new highs is gut wrenching to investors who are flush with cash, and indescribable to those who sat on the sidelines for most of the 2009 – 2013 bull market. They had good reason to be worried, because this bull market climbed an unprecedented wall of worries in its 133% ascent, but these new all-time highs are getting their attention. Institutional investors key more on the S&P 500 than they do on the DJIA. It’s based on 500 companies from a cross section of industry groups, the DJIA is based on 30 mature companies. The S&P index is (more)…
March 13, 2013
Press Driven Investor Euphoria
The DJIA hit yet another bull market high yesterday with a gain of $2.77 for the day. As the 4 p.m. closing bell approached, CNBC began a dramatic countdown – Will it, or won’t it close at the 6th straight bull market high ? What does all this mean ? Suddenly, the stock market has a noisy rooting section – the press, which was quick to emphasize the negatives as the DJIA climbed a 7,840-point wall of worry, creating enough fear to keep a lot of investors on the sidelines. Now, it is orchestrating a rush to buy, and will continue to do so. The S&P 500 has not yet hit a new intraday, bull market high, but will do so, in time. That event will be accompanied by yet more press headlines. CONCLUSION: This is the kind of euphoria (more)…
March 12, 2013
Insider Selling?
In case you have heard the bears’ buzz about “insider sales” foretelling a market top, you should also know what newsletter publisher and money manager, InvesTech*, has to say about it. InvesTech has an incredible record for accurate calls in the market and for debunking market adages that simply are not true or are misleading. Its latest issue graphically illustrates the inconsistency of insider selling as a “sell” signal for the market as a whole. However, InvesTech does go on to remind readers that 5% corrections have occurred every four to six months during this bull market with the last one occurring in November. Take note! New highs and the absence of horrendous negative news are forcing investors to pull money out of safe havens and to invest in stocks. Profit takers end up with cash to invest, and the (more)…
March 11, 2013
Bulls: Room to Run, But Not in a Straight Line
Last week the DJIA topped its October 11, 2007 all-time, intraday bull market high; the broader based S&P 500 will soon follow suit. Will the market continue to run ? Absolutely, barring a major unforeseen political, economic or international development. As I noted last week, the stock market is now back to the level where the great bear market of 2007 to 2009 started, a market that trashed the S&P 500 to the tune of 58% in two years. However, we are not looking at the host of negatives today that we faced 2007, the collapse in home prices, the stock market and economy here and abroad. We went to the brink of a total meltdown back then, and survived. To me, that suggests the stock market is more realistically valued today than it was in 2007, and in fact, (more)…
March 8, 2013
Headlines of New Highs Lure More Buyers
The urge to add more stocks to one’s portfolio increases every day the press reports the market posted a new all-time high. Many investors still have money in bond funds where they sought a better return than they could get in money market funds. Many still mostly on the sidelines watching in disbelief as the market defiantly climbs a wall of multiple worries over the years. Stupid? Cowardly? Not at all. Just humans being human. There was good reason to doubt the recovery that started four years ago following the worst recession/bear market since the 1930s when the world’s economies came within a smidge of a total meltdown. So, did the late-comers miss the bull market? Well the broad-based S&P 500 is up 132% from its bear market intraday low, so yes, that much of it was missed, but with (more)…
March 7, 2013
Feeding Frenzy – Pressures Mount to Buy
Has it really been four years since the bear market bottom? Seems longer? The “wall of worry that this bull market had to climb since the bear market bottom March 9, 2013 was steeper than any since the 1930s. I don’t think that “bottom” was that hard to call. It was as classic as any bottom could be. All the signs of extreme bearishness were there – textbook stuff. If the “TOP” in this bull market gets to an extreme comparable to the March 2009 bear bottom, this bull has a long way to go. 4 Years Ago – Headlines from Investor’s first read blogs “Does the Cauldron of Fear Have to Boil Before This Market Turns” DJIA: 7,114 Feb 24, 2009 “When the Fear of Owning Stocks Turns to the Fear of Not Owning Stocks” DJIA: 7,350 Feb 25, 2009 (more)…
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