Does the volatility mean anything?

Saturday, October 25, 12 noon.

Volatility that has been in global markets for quite some time, while U.S. investors could be calm and complacent amidst small daily moves, whether the market was advancing or pulling back, has come to U.S. markets, with triple-digit daily moves the norm, and now sizable weekly moves.

This week CNBC celebrated the best week for the S&P 500 since January 2013. A few weeks ago it was bemoaning the worst week for the S&P 500 since May 2012.

A big week to the upside raises hope, just as much as a big down-week causes concern. Similarly, a string of daily triple-digit rallies raises hope, just as a string of daily triple-digit down days causes concern.

There have now been 20 triple-digit moves by the Dow in the last 26 trading days on a closing basis. That does not include the days with intraday triple-digit swings from the lows to the highs, or highs to lows, which were just as wild even on the days when the closes were not triple-digits.

Of the triple-digit closes, 9 were to the upside, 11 were to the downside.

Here’s an update on the closes since Sept. 18 when the volatility began, to yesterday’s 127 points to the upside:     +109; +13; –107; –116; +154; –274; –264; +167; –238; –3; +208;     –17; –272; +274; –334; –115; –223; –5; –173; –24; +263; +19; +215; –153; +216; +127.

So far, the down moves have dominated, since the market is down from its September 18 peak. But the up-moves have had much more effect on investor emotions, since the AAII poll shows high bullishness and low bearishness just about back to the level of euphoria and confidence just before the September peak. And that was as of Wednesday, so doesn’t include the effect the last few days of rally have probably had on the readings.

As I noted in my weekend newspaper column, for the moment anyway, it still looks as much like just a rally off the short-term oversold condition created by the four straight down weeks as it does the resumption of the bull market.

102514a

But we should soon know.

Next week has some very important economic reports coming out, including Durable Goods Orders, Consumer Confidence, the Fed’s statement after its FOMC meeting, the first report on 3rd quarter GDP, etc. 

To read my weekend newspaper column click here: Buy the Dip or Sell the Rally-

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, the mid-week Markets update from Wednesday is in your secure area of the Street Smart Report website. And the next issue of the newsletter will be out on Wednesday.

U.S. market yesterday.

Triple-digit moves have become the norm.

The Dow closed up 127 points or 0.8%. Volume 0.7 billion shares traded on the NYSE.

The Dow closed up 127 points, or 0.8%. The S&P 500 closed up 0.7%. The NYSE Composite closed up 0.6%. The Nasdaq closed up 0.7%. The Nasdaq 100 closed up 0.7%. The Russell 2000 closed up 0.2%. The DJ Transportation Avg. closed up 1.0%. The DJ Utilities Avg closed up 1.2%.

Gold closed up $2 an ounce at $1,230 an ounce.

The U.S. dollar etf UUP closed down 0.2%.

Bonds (TLT) closed up 0.1%.

Asian markets closed mixed in their last session of the week.

The Asia Dow closed unchanged.

Australia closed up 0.6%. China closed unchanged. Hong Kong closed down 0.1%. India closed up 0.8%. Indonesia closed down 0.6%. Japan closed up 1.0%. Malaysia closed up 0.6%. New Zealand closed up 0.8%. Singapore closed down 0.4%. South Korea closed down 0.3%. Taiwan closed down 1.0%. Thailand closed up 0.5%.

European markets ended their bounce-back week with a decline yesterday.

The Europe Dow closedown 0.5%.

The London FTSE closed down 0.5%. The German DAX closed down 0.7%. France’s CAC closed down 0.7%. Belgium closed up 0.2%. Denmark closed down 0.6%. Finland closed down 0.8%. Greece closed up 0.1%. Ireland closed down 0.6%. Italy closed up 0.3%. Netherlands closed down 0.2%. Norway closed up 0.2%. Portugal closed down 0.8%. Spain closed up 0.1%. Switzerland closed down 0.2%.

Global markets for the week. 

It was an impressive week, ending the unusual four straight down weeks. It was the best week for the S&P 500 since January 2103. A few weeks ago it was the worst week for the S&P 500 since May 2012.

THIS WEEK (Oct. 24)
DJIA 16805 +2.6%
S&P 500 1,964 +4.1%
NYSE 10582 +3.2%
NASDAQ 4483 +5.3%
NASD 100 4042 +6.0%
Russ 2000 1118 +3.3%
DJTransprts 8568 +5.2%
DJ Utilities 583 +3.8%
XOI Oils 1,454 +3.0%
Gold bull. 1,230 -0.6%
GoldStcks 75.93 -1.5%
Canada 14543 +2.2%
London 6388 +1.2%
Germany 8987 +1.5%
France 4128 +2.4%
Hong Kong 23,302 +1.2%
Japan 15291 +5.2%
Australia 5399 +2.6%
S. Korea 1925 +1.3%
India 26851 +2.9%
Indonesia 5073 +0.9%
Brazil 51940 -6.8%
Mexico 43666 +0.9%
China 2410 -1.7%
LAST WEEK (Oct. 17)
DJIA 16380 -1.0%
S&P 500 1,886 -1.1%
NYSE 10250 -0.4%
NASDAQ 4258 -0.4%
NASD 100 3815 -1.4%
Russ 2000 1082 +2.8%
DJTransprts 8147 +3.2%
DJ Utilities 553 +0.2%
XOI Oils 1,412 -1.8%
Gold bull. 1,237 +1.1%
GoldStcks 77.08 -0.2%
Canada 14227 unchgd
London 6310 -0.5%
Germany 8850 +0.7%
France 4033 -1.0%
Hong Kong 23,023 -0.3%
Japan 14532 -5.0%
Australia 5260 +1.5%
S. Korea 1900 -2.1%
India 26108 -0.7%
Indonesia 5028 +1.3%
Brazil 55723 +0.7%
Mexico 43273 -0.4%
China 2451 -1.4%
PREVIOUS WEEK (Oct. 10)
DJIA 16544 -2.7%
S&P 500 1,906 -3.1%
NYSE 10293 -3.2%
NASDAQ 4276 -4.5%
NASD 100 3870 -3.9%
Russ 2000 1053 -4.6%
DJTransprts 7893 -6.9%
DJ Utilities 552 +1.1%
XOI Oils 1,438 -4.8%
Gold bull. 1,223 +2.7%
GoldStcks 77.26 -1.5%
Canada 14227 -3.8%
London 6339 -2.9%
Germany 8788 -4.4%
France 4073 -4.9%
Hong Kong 23,088 +0.1%
Japan 15,300 -2.6%
Australia 5185 -2.4%
S. Korea 1940 -1.8%
India 26297 -1.0%
Indonesia 4962 +0.3%
Brazil 55353 +1.9%
Mexico 43435 -2.8%
China 2485 +0.4%

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Next week’s Economic Reports:

Next week will be a significant week for U.S. economic reports, including Durable Goods Orders, Consumer Confidence, the Fed’s statement after its FOMC meeting, the first report on 3rd quarter GDP, etc. To see the full list and times click here, and look at the left side of the page it takes you to.

To read my weekend newspaper column click here: Buy the Dip or Sell the Rally-

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, the mid-week Markets update from Wednesday is in your secure area of the Street Smart Report website. And the next issue of the newsletter will be out on Wednesday

I’ll be back with the next blog post Tuesday morning at 9:25 a.m.

Non-Subscribers:

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**** End of Today’s post*****

Investors are even more euphoric and confident.

Thursday, October 23, 9:25 a.m.

As noted on the blog last Thursday, even though the market had been down for three straight weeks, last week’s poll of its members by the American Association of Individual Investors (AAII) showed the bullish percentage had increased to 42.7%, with those bearish at only 33.7%.

After the market’s four straight up days, this week’s poll, released last night, showed another big jump.

Bullish percentage: +7 to 49.7%

Bearish percentage : –11.2 to 22.5%

Those are numbers usually associated with close to market tops, not correction lows, and from the looks of the pre-open indicators, investors will be piling into the market even more feverishly this morning, which will spike bullishness, and plunge bearishness even further.

By the time corrections are over, fear has usually taken over, with bulls under 20% and bears above 50%, just about opposite to current readings.

For instance, in early September, just before the market peak in mid-September bulls had climbed to 51.9%, bears had dropped to 19.2%, just in time for the top.

But sentiment does not provide signals, it only indicates risk. It can get more lop-sided, but at current levels it is a reason for concern.

Market still short-term oversold.

Meanwhile, the market is still short-term oversold beneath 50-day moving averages. But that could change today if the big rally likely at the open holds through the day.

102314b

 

102314c

Volatility since mid-September. 

To update the day-to-day listing we began on Saturday’s blog:

There have now been 18 triple-digit moves by the Dow in the last 24 trading days on a closing basis. That does not include the days with intraday triple-digit swings from the lows to the highs, or highs to lows, which were just as wild even on the days when the closes were not triple-digits.

Of the triple-digit closes, 7 were to the upside, 11 were to the downside.

Here’s how the closes went since September 18 when the volatility began, to today’s 153 points to the downside:     +109; +13; –107; –116; +154; –274; –264; +167; –238; –3; +208;  –17; –272; +274; –334; –115; –223; –5; –173; –24; +263; +19; +215; -153.

To read my weekend newspaper column, click here:  Janet Yellen is Wrong about the Cause of Wealth Inequality

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, there is a hotline and an in-depth Markets Update (stock market, gold, & bonds) from last night, in your secure area of the Street Smart Report website.

Yesterday in the U.S. Market. 

Volatility continues. After three straight rally days for the Dow, it closed down yesterday. Volume increased to almost 0.8 billion shares traded on the NYSE.

The Dow closed down 153 points, or 0.9%. The S&P 500 closed down 0.7%. The NYSE Composite closed up 0.8%. The Nasdaq closed up 1.3%. The Nasdaq 100 closed up 1.4%. The Russell 2000 closed up 1.2%. The DJ Transportation Avg. closed up 1.0%. The DJ Utilities Avg closed up 1.4%.

Gold closed down $6 an ounce at $1,245 an ounce.

The U.S. dollar etf UUP closed up 0.4%.

Bonds (TLT) closed up 0.1%.

European Markets closed up yesterday for 3rd straight day.

The Europe Dow closed up 0.1%.

The London FTSE closed up 0.4%. The German DAX closed up 0.6%. France’s CAC closed up 0.6%. Belgium closed up 1.0%. Denmark closed up 1.9%. Finland closed up 1.0%. Greece closed down 0.6%.  Ireland closed up 1.0%. Italy closed up 1.1%. Netherlands closed up 0.4%. Norway closed up 1.2%. Portugal closed up 0.3%. Spain closed up 1.0%. Switzerland closed up 1.2%.

Asian Markets closed down last night.

The DJ Asia-Pacific Index closed down 0.3%. Among individual countries:

Australia closed down 0.1%. China closed down 1.1%. Hong Kong closed down 0.3%. India closed up 0.8%. Indonesia closed up 0.6%. Japan closed down 0.4%. Malaysia closed down 0.3%. New Zealand closed up 0.2%. South Korea closed down 0.3%. Singapore closed up 0.7%. Taiwan closed down 0.2%. Thailand closed up 0.4%.

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Markets This Morning:

European markets are off earlier lows, now mixed.

The Europe Dow is up 0.3%

The London FTSE is down 0.1%. The German DAX is up 0.5%. France’s CAC is up 0.6%. Belgium is down 0.1%. Denmark is up 0.2%. Finland is up 0.8%. Greece is down 1.1%. Ireland is up 0.1%. Italy is down 0.1%. Netherlands is down 0.2%. Norway is down 0.5%. Portugal is down 0.3%. Spain is up 0.1%. Switzerland is up 0.1%.

This Morning in the U.S. Market:

Gold is down $9 an ounce at $1,236 an ounce.

This week’s Economic Reports:

This week is a light week for U.S. economic reports, but they will include some of importance, including Existing Home Sales, New Home Sales, the FHFA Home Price Index, the Fed’s National Business Activity Index, Leading Economic Indicators, etc. To see the full list and times click here, and look at the left side of the page it takes you to.

There were no reports on Monday.

Tuesday’s report was that Existing Home Sales were up 2.4% in September, better than the consensus estimate.

Yesterday’s only report was that the Consumer Price Index was up only 0.1% in September.

This morning’s reports so far are that weekly unemployment claims rose by 17,000 last week to 283,000, but remained below the key number of 300,000. The four-week moving average fell by 3,000 to 281,000. The Chicago Fed’s National Business Index improved from negative –0.25 in August to + 0.47 in September. And the FHFA Home Price Index showed home prices were up again in August, rising 0.5%. Still to come are the PMI Mfg Index, which will be released at 9:45 am, and Leading Economic Indicators, which will be released at10 am.

The pre-open indicators have been strengthening all morning and are now very positive.

Our Pre-open Indicators:

Our pre-open indicators are pointing to the Dow being up 170 points or so in the early going.

I’ll be back with the next post on Saturday morning, as usual later than on the week-days, probably around 12 noon.

To read my weekend newspaper column, click here:  Janet Yellen is Wrong about the Cause of Wealth Inequality

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, there is a hotline and an in-depth Markets Update (stock market, gold, & bonds) from last night, in your secure area of the Street Smart Report website.

Non-Subscribers:

If you haven’t done so yet, check out our new bull market/bear market indicator (BBMI) by clicking here: Market Timing Strategy

SUBSCRIBE NOW! To get all of this:

(The equivalent of four or five normal newsletters at the cost of one)

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  • A 6-page Mid-Week Markets Report every week.
  • A 4 to 6 page Gold, Bonds, U.S. Dollar Report every three weeks.
  • A 4 to 6 page Global Market Report every three weeks.
  • The 8-page Street Smart Report newsletter every 3 weeks.
  • Hotline Updates whenever signals or recommendations change.
  • Two specific portfolios (Seasonal Timing & Technical Analysis Timing)
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This blog appears every Tuesday, Thursday, and Saturday morning!

 **** End of Today’s post*****

Will Global Market Collapses Pull U.S. Down?

Tuesday, October 21, 9:25 a.m.

The S&P 500 broke fractionally below its 50-day m.a. and rallied back, but found the 50-day m.a. to be overhead resistance this time, and plunged back down. It produced a bit of a scare when it then broke beneath its long-term 200-day m.a.

However its pullback was less than 10%, and it has now been up for two days. That has investors and the financial media optimistic that that’s all there will be of the downside.

102114a

But holy cow. The collapses in markets around the world are not just minor pullbacks. Something is certainly going on globally that the U.S. market is still pretty much ignoring.

Markets in Europe topped out several months before the U.S. market, and followed the same pattern as the U.S. market. They had been making new record highs along with the U.S. market, then broke beneath their 50-day m.a. No big deal.

But then, like the U.S. market they attempted to rally and this time, also like the U.S., found the 50-day m.a. to be overhead resistance, and also like the U.S. market, they pulled back further and broke below the long-term support at the 200 day m.a.

But they are several months ahead of the U.S. market, and their first rally attempt after breaking beneath the 200-day m.a. failed at that m.a., and their plunges have worsened in another leg down.

102114b

It’s not just Europe that the long-term 200-day m.a. is looking like overhead resistance. We can see the same thing is the Latin American Index (Argentina, Brazil, Mexico, Chile, Venezuela, etc).

102114c

102114d

Is this something that should concern U.S. markets as they rally back to their 200-day m.a.’s, or can the U.S. economy and markets go it alone in a renewed bull market?

102114e

Other Voices. 

Doug Kass, Seabreeze Partners: “By my calculation Carl Icahn’s portfolio has lost 15% to 20%, more than $6 billion, from recent market highs. My intention is not to be critical of Icahn, but to deliver the lesson and message that if one of the world’s most successful investors is having a tough time of it, all investors should pay heed to a market that could, and has, lost its innocence. . . . . . Everybody seems to be looking up when they should be looking down.”

Speaking of billionaire losses, given his holdings in IBM Warren Buffett reportedly lost more than $1 billion yesterday on IBM’s 7% plunge.

Can Wall Street have it both ways on seasonality? 

As happens every year, in the spring when some in the financial media bring up the remarkable history of Sell in May (and buy back in November), Wall Street and its cheerleaders are all over the place slamming it. Pay no attention, seasonality is just a myth.

However, now that fall is here, those same cheerleaders are all over the place telling investors it’s time to buy because the market’s favorable winter season is almost here.

When I and others were pointing out the history of August, September, and October usually being the weakest three-month period of the year, they were all over the place saying either that it was not true or that the declines were too small to think about.

But now that September and the first half of October were down fairly sharply, they’re all over the place pointing out the history of those months being down sharply enough to create fear, and then a great buying opportunity.

Have they changed their minds about seasonality?

No, they know the truth, but can only admit to the half of annual seasonality that promotes buying, not the half that calls for caution.

Speaking of seasonality. 

This e-mail from a subscriber last week about our Seasonal Timing Strategy (STS):

“Sy, Just to let you know, when I got clobbered in the 2000 crash I was determined to understand market-timing and find a strategy that could make money in bull, bear, or sideways markets. I evaluate literally more than 60 so-called ‘gurus’. You and the STS strategy are the ONLY one that is consistently valid and profitable over any 3 year or longer period. The STS is a phenomenal strategy for its gains, avoiding the crashes, and the incredible simplicity of two trades a year. Amazing. (You can quote me if you like). Ed.

STS last 15 years. 

To read my weekend newspaper column, click here:  Janet Yellen is Wrong about the Cause of Wealth Inequality

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, there is an in-depth ‘Gold, Bonds, Dollar, Inflation’ update from yesterday in your secure area of the Street Smart Report website. And there will be an in-depth ‘Markets’ Update there tomorrow.

Yesterday in the U.S. Market. 

There we go. At last a follow-up positive day to a big triple-digit rally day. The Dow was down 140 points in the early going, due to the big plunge in IBM, heavily weighted in The Dow. But even the Dow reversed to the upside in the afternoon to close up 19 points, or 0.1%. But the rest of the indexes, not as impacted by IBM, were significantly more positive than the Dow. However, volume dropped back from the 1 billion+ shares on the down days last week, to just 0.7 billion shares traded on the NYSE. The safe havens, gold and bonds, remained concerned though, gold closing up 0.7% and bonds (TLT) closing up 0.4%.

The Dow closed up 19 points, or 0.1%. The S&P 500 closed up 0.9%. The NYSE Composite closed up 0.8%. The Nasdaq closed up 1.3%. The Nasdaq 100 closed up 1.4%. The Russell 2000 closed up 1.2%. The DJ Transportation Avg. closed up 1.0%. The DJ Utilities Avg closed up 1.4%.

Gold closed up $5 an ounce at $1,244 an ounce on another pullback by the U.S. dollar.

The U.S. dollar etf UUP closed down 0.4%.

Bonds (TLT) closed up 0.4%.

European Markets closed down quite sharply again yesterday.

The London FTSE closed down 0.7%. The German DAX closed down 1.5%. France’s CAC closed down 1.0%. Belgium closed down 0.6%. Denmark closed up 0.6%. Finland closed down 0.6%. Greece closed up 1.0%.  Ireland closed up 0.6%. Italy closed down 0.9%. Netherlands closed down 0.7%. Norway closed down 0.7%. Portugal closed down 0.2%. Spain closed down 0.4%. Switzerland closed up 0.4%.

Asian Markets closed down last night.

The DJ Asia-Pacific Index closed down 0.5%. Among individual countries:

Australia closed up 0.1%. China closed down 0.9%. Hong Kong closed up 0.1%. India closed up 0.6%. Indonesia closed down 0.5%. Japan plunged 2.0%. Malaysia closed down 0.3%. New Zealand closed up 0.7%. South Korea closed down 1.0%. Singapore closed up 0.7%. Taiwan closed down 0.1%. Thailand closed down 0.1%.

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NOTE: To gain access call our subscription office at 1-386-943-4081 (week-days only). If you can afford two cups of coffee a week you can afford the cost of 25.95 a month ($6.50 a week). For that you also receive the full Street Smart Report advisory service (newsletter, hotlines, in depth mid-week reports on stocks, gold ,bonds, etc.). Or to subscribe online click here:https://streetsmart.securesites.net/order.html


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Markets This Morning:

European markets are bouncing back strongly this morning.

The Europe Dow is up 1.0%

The London FTSE is up 0.9%. The German DAX is up 1.5%. France’s CAC is up 1.7%. Belgium is up 1.4%. Denmark is up 1.7%. Finland is up 1.0%. Greece is surging 4.7%. Ireland is up 2.6%. Italy is up 2.3%. Netherlands is up 1.8%. Norway is up 2.6%. Portugal is up 2.1%. Spain is up 2.1%. Switzerland is up 0.9%.

This Morning in the U.S. Market:

Oil is up $.99 a barrel, at $83.67

Gold is up $7 an ounce at $1,252 an ounce.

This week’s Economic Reports:

This week is a light week for U.S. economic reports, but they will include some of importance, including Existing Home Sales, New Home Sales, the FHFA Home Price Index, the Fed’s National Business Activity Index, Leading Economic Indicators, etc. To see the full list and times click here, and look at the left side of the page it takes you to.

There were no reports yesterday.

This morning’s only U.S. report will be Existing Home Sales, which will be released at 10 a.m.

The pre-open indicators have come off earlier highs but are still quite positive.

Our Pre-open Indicators:

Our pre-open indicators are pointing to the Dow being up 75 points or so in the early going.

I’ll be back with the next post on Thursday morning at 9:25 a.m.

To read my weekend newspaper column, click here:  Janet Yellen is Wrong about the Cause of Wealth Inequality

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, there is an in-depth ‘Gold, Bonds, Dollar, Inflation’ update from yesterday in your secure area of the Street Smart Report website. And there will be an in-depth ‘Markets’ Update there tomorrow.

Non-Subscribers:

If you haven’t done so yet, check out our new bull market/bear market indicator (BBMI) by clicking here: Market Timing Strategy

SUBSCRIBE NOW! To get all of this:

(The equivalent of four or five normal newsletters at the cost of one)

  • Access to Premium Content area of this Blog, Tuesday, Thursday, and Saturday a.m.
  • A 6-page Mid-Week Markets Report every week.
  • A 4 to 6 page Gold, Bonds, U.S. Dollar Report every three weeks.
  • A 4 to 6 page Global Market Report every three weeks.
  • The 8-page Street Smart Report newsletter every 3 weeks.
  • Hotline Updates whenever signals or recommendations change.
  • Two specific portfolios (Seasonal Timing & Technical Analysis Timing)
  • Sy’s weekly column on markets and the economy every Friday.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds. Highly regarded and in our 26th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

 **** End of Today’s post*****

Market volatility continues but is bottom in?

Saturday, October 18, 12:30 p.m.

The market’s volatility continues, and it has the outlook and expectations of the financial media jumping up and down just as rapidly every few days, between “This correction is just beginning” to “That’s it, the bottom is in.”

There have been 16 triple-digit moves by the Dow in the last 21 trading days on a closing basis. That does not include the days with intraday triple-digit swings from the lows to the highs, or highs to lows, which were just as wild even on the days when the closes were not triple-digits.

Of the triple-digit closes, 6 were to the upside, 10 were to the downside.

Here’s how the closes went since September 18 when the volatility began, to yesterday’s 263 points to the upside:     +109; +13; –107; –116; +154; –274; –264; +167; –238; –3; +208;     –17; –272; +274; –334; –115; –223; –5; –173; –24; +263.

So far each day the Dow closed up triple-digits, creating a lot of TV pundit excitement and bottom-calling, there was no follow through even the next day. The triple-digit up-day was immediately followed by down-days to new correction lows.

That serves a purpose in both directions. As happens in all significant market declines, they are never in a straight line down. They have enough bounces to keep the majority of passive investors first confident, and then at least hopeful, all the way down.

In the other direction, repeated failure of buying the dips when the market quickly reverses to the downside, causes bullish active investors to be more cautious and wait longer the next time, which is how corrections cascade down, those buying the dips becoming less bold, those selling encouraged to sell more quickly into the brief rallies.

So will that pattern continue, with no follow through to yesterday’s triple-digit rally?

101814j

As you know, I’ve been expecting a short-term rally off the oversold condition, but it just hasn’t happened. But after four straight down weeks, surely it must be time for the bulls to show more gumption and confidence.

Well, maybe. 

Does a low unemployment rate indicate a pending recession?.

I must be reading this chart wrong. It was released by the St. Louis Fed this week. It shows the unemployment rate going back 65 years to 1950.

The green line is the “Civilian Unemployment Rate”. The shaded areas (vertical gray bars) are the recessions over that period. The Fed’s accompanying questions were only “What is the ‘normal unemployment rate?”, and “When will the unemployment rate get back to normal?” (the deep red line).

If there was more information in the chart surely the Fed would have noticed and commented on it. So, I’m probably misreading it, or missing something.

But I notice that unemployment was at peak levels by the time recessions ended. And we can understand why that would be.

However, I don’t know why it would be, but does the chart not also show that every time the unemployment rate came down to a low, a recession was about to begin?

image

Interesting though.

I wish I had more time to talk about the economy and earnings, but the subscribers area took longer than normal this morning.

End of day market manipulation.?

Long-time readers know that every once in a while I get into a rant about the indications that the large program-trading firms use their powerful buy-programs to manipulate the market, particularly the 30-stock Dow, in the final half hour of the day when they want it to close positive for the day or going into a weekend.

It’s so obvious that I often wonder why regulators don’t put an end to it.

But of course the program-trading firms are the largest brokerage firms and investment banks on Wall Street, and we know how they are favored by the regulators.

However, it does look like such actions are noticed, and actions even taken on some (if they’re not a big investment bank?).

This from MarketWatch yesterday:

SEC charges high-frequency trading firm for orders at end of the day!

WASHINGTON (MarketWatch) — The Securities and Exchange Commission on Thursday charged a high-frequency trading firm for placing a large number of "aggressive, rapid-fire trades" in the final two seconds of almost every trading day, allegedly to manipulate thousands of Nasdaq-listed stocks. The SEC said Athena Capital Research agreed to pay a $1 million fine to settle the charges and did not admit or deny the findings. The manipulative trading the SEC alleged occurred from June to December 2009 and made up more than 70% of the total Nasdaq trading volume of the affected stocks in the seconds before the market close.

To read my weekend newspaper column click here:  Janet Yellen is Wrong about the Cause of Wealth Inequality

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, the mid-week Markets update from Wednesday is in your secure area of the Street Smart Report website. There will be an in-depth ‘Gold, Bonds, Dollar, Inflation’ update there Monday afternoon.

U.S. market yesterday.

Yes, volatility moves in both directions, this time to the upside. The Dow closed up 263 points or 1.8%. The rest of the market was positive but not as much.

Market breadth was not impressive, only twice as many stocks up as down on the NYSE, not near what would be expected on a day when the Dow is up 263 points. And breadth was barely positive on the Nasdaq, with 1,553 stocks up an 1,395 down.

Volume was heavy as it has been lately, just over 1.0 billion shares traded on the NYSE.

The Dow closed up 263 points, or 1.6%. The S&P 500 closed up 1.3%. The NYSE Composite closed up 1.3%. The Nasdaq closed up 1.0%. The Nasdaq 100 closed up 1.3%. The Russell 2000 closed down 0.4%. The DJ Transportation Avg. closed up 1.5%. The DJ Utilities Avg closed up 0.7%.

Gold closed down $4 an ounce at $1,237 an ounce.

The U.S. dollar etf UUP closed up 0.3%.

Bonds (TLT) closed down 0.6%.

Asian markets closed mixed in their last session of the week.

The DJ Asia-Pacific Index closed down 0.8%.

Australia closed up 0.3%. China closed down 0.7%. Hong Kong closed up 0.5%. India closed up 0.4%. Indonesia closed up 1.6%. Japan closed down 1.4%. Malaysia closed up1.6%. New Zealand closed up 0.3%. Singapore closed up 0.4%. South Korea closed down 1.0%. Taiwan closed down 1.4%. Thailand closed up 0.2%.

European markets surged up yesterday along with the U.S.

The Europe Dow closed up 2.7%.

The London FTSE closed up 1.9%. The German DAX closed up 3.1%. France’s CAC closed up 2.9%. Belgium closed up 3.5%. Denmark closed up 4.0%. Finland closed up 3.1%. Greece closed up 7.2%. Ireland closed up 3.2%. Italy closed up 3.4%. Netherlands closed up 2.9%. Norway closed up 3.9%. Portugal closed up 2.6%. Spain closed up 2.9%. Switzerland closed up 2.4%.

Global markets for the week. 

It was an impressive day yesterday, but not enough to prevent the fourth straight negative week.

THIS WEEK (Oct. 17)
DJIA 16380 -1.0%
S&P 500 1,886 -1.1%
NYSE 10250 -0.4%
NASDAQ 4258 -0.4%
NASD 100 3815 -1.4%
Russ 2000 1082 +2.8%
DJTransprts 8147 +3.2%
DJ Utilities 553 +0.2%
XOI Oils 1,412 -1.8%
Gold bull. 1,237 +1.1%
GoldStcks 77.08 -0.2%
Canada 14227 unchgd
London 6310 -0.5%
Germany 8850 +0.7%
France 4033 -1.0%
Hong Kong 23,023 -0.3%
Japan 14532 -5.0%
Australia 5260 +1.5%
S. Korea 1900 -2.1%
India 26108 -0.7%
Indonesia 5028 +1.3%
Brazil 55723 +0.7%
Mexico 43273 -0.4%
China 2451 -1.4%
LAST WEEK (Oct. 10)
DJIA 16544 -2.7%
S&P 500 1,906 -3.1%
NYSE 10293 -3.2%
NASDAQ 4276 -4.5%
NASD 100 3870 -3.9%
Russ 2000 1053 -4.6%
DJTransprts 7893 -6.9%
DJ Utilities 552 +1.1%
XOI Oils 1,438 -4.8%
Gold bull. 1,223 +2.7%
GoldStcks 77.26 -1.5%
Canada 14227 -3.8%
London 6339 -2.9%
Germany 8788 -4.4%
France 4073 -4.9%
Hong Kong 23,088 +0.1%
Japan 15,300 -2.6%
Australia 5185 -2.4%
S. Korea 1940 -1.8%
India 26297 -1.0%
Indonesia 4962 +0.3%
Brazil 55353 +1.9%
Mexico 43435 -2.8%
China 2485 +0.4%
PREVIOUS WEEK (Oct. 3)
DJIA 17,009 -0.6%
S&P 500 1,967 -0.8%
NYSE 10635 -1.5%
NASDAQ 4475 -0.8%
NASD 100 4027 -0.6%
Russ 2000 1104 -1.3%
DJTransprts 8481 -0.1%
DJ Utilities 555 +1.4%
XOI Oils 1,511 -4.6%
Gold bull. 1,191 -2.1%
GoldStcks 78.42 -6.6%
Canada 14789 -1.6%
London 6527 -1.8%
Germany 9195 -3.1%
France 4281 -2.6%
Hong Kong 23,064 -2.6%
Japan 15,708 -3.2%
Australia 5315 -0.1%
S. Korea 1976 -2.7%
India 26567 -0.2%
Indonesia 4949 -3.6%
Brazil 54297 -5.1%
Mexico 44689 -0.4%
China 2474 +0.7%

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NOTE: To gain access subscribe online click here: https://streetsmart.securesites.net/order.html or call our subscription office at 1-386-943-4081 (week-days only). If you can afford two cups of coffee a week you can afford the cost of 25.95 a month ($6.50 a week). For that you also receive the full Street Smart Report advisory service (newsletter, hotlines, in depth mid-week reports on stocks, gold ,bonds, etc.).

In the premium content area this morning: Charts and signals on the U.S. stock market, gold, and bonds, signals (long-term, intermediate-term, and short-term), and analysis of each.


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Next week’s Economic Reports:

Next week will be a light week for U.S. economic reports, but they will include some of importance, including Existing Home Sales, New Home Sales, the FHFA Home Price Index, the Fed’s National Business Activity Index, Leading Economic Indicators, etc. To see the full list and times click here, and look at the left side of the page it takes you to.

To read my weekend newspaper column click here:  Janet Yellen is Wrong about the Cause of Wealth Inequality

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, the mid-week Markets update from Wednesday is in your secure area of the Street Smart Report website. There will be an in-depth ‘Gold, Bonds, Dollar, Inflation’ update there Monday afternoon.

I’ll be back with the next blog post Tuesday morning at 9:25 a.m.

Non-Subscribers:

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**** End of Today’s post*****

Correction Accelerates But Investors Not Worried.

Thursday, October 14, 9:25 a.m.

The U.S. market, already down three straight weeks, seems to be accelerating to the downside this week. The S&P 500, down 3.1% last week, is already down 2.8% in the first three days of this week, and the early morning indicators are pointing to a seriously negative opening this morning.

The acceleration can also be seen in the daily trading volume on the NYSE, which has doubled this week to 1.2 billion shares from the average daily volume of around 0.6 billion over the last year.

Meanwhile, the Fed is doing its job of providing optimism to calm markets and consumers, with for instance, its Beige Book report yesterday that the economic recovery is still on track.

And Wall Street is doing what it considers to be its job of keeping investors optimistic and confident, with its assurances that there is no correction in the cards, only a minor pullback.

It has had to keep changing its story, raising its definition of what constitutes just a pullback, repeatedly moving its support levels lower, constantly trying to grasp minor straws that it says might indicate the bottom is in.

And it is working.

The latest weekly poll of its members by the American Association of Individual Investors (AAII), released last night shows those who are bullish has increased by 2.8% to 42.7, while those who are bears increased only 2.7% to 33.7%. By the time corrections end, fear has usually taken over, with bulls under 20% and bears above 50%.

That wasn’t much of a rally. 

In Tuesday’s blog I said the correction had reached a short-term oversold condition where a rally attempt off the oversold condition was likely.

The market rallied strongly for awhile Tuesday, with the Dow up 150 points at its high. But it then rolled over to the downside and closed down 5 points for the day, and has been down sharply since.

To read my weekend newspaper column, click here:  Can the Fed Come to the Rescue Again if Needed

Subscribers to Street Smart Report:

There is a hotline from last evening, an in-depth Markets Update (U.S. stock market, bonds, and gold) from yesterday, and a Global Markets report from Tuesday, in your secure area of the Street Smart Report website.

Yesterday in the U.S. Market. 

Now that was volatility. The Dow was down 460 points by mid-afternoon before recovering in the final two hours to close down ‘only’ 173 points. Volume surged up to almost 1.2 billion shares traded on the NYSE. It had increased from the previous average of 0.6 billion, to around 0.9 billion. But today was just about double the average of 0.6 billion of the past year or two.

The Dow closed down 173 points, or 1.1%. The S&P 500 closed down 0.8%. The NYSE Composite closed down 0.8%. The Nasdaq closed down 0.3%. The Nasdaq 100 closed down 0.6%. The Russell 2000 closed up 1.1%. The DJ Transportation Avg. closed up 0.2%. The DJ Utilities Avg closed down 1.3%.

Gold closed up $5 an ounce at $1,239 an ounce on another pullback by the U.S. dollar.

The U.S. dollar etf UUP closed down 1.1%.

Bonds (TLT) closed up 0.8%.

European Markets plunged sharply again yesterday.

The Europe Dow plunged 2.6%.

The London FTSE closed down 1.9%. The German DAX closed down 2.9%. France’s CAC closed down 2.9%. Belgium closed down 2.4%. Denmark closed down 2.6%. Finland closed down 2.7%. Greece plunged 5.6%.  Ireland closed down 2.6%. Italy plunged 4.4%. Netherlands closed down 2.6%. Norway closed down 2.1%. Portugal closed down 3.0%. Spain closed down 3.5%. Switzerland closed down 2.7%.

Asian Markets closed down last night.

The Asia-Dow closed down 1.4%. Among individual countries:

Australia closed up 0.1%. China closed down 0.7%. Hong Kong closed down 1.0%. India closed down 1.3%. Indonesia closed down 0.2%. Japan closed down 2.2%. Malaysia closed down 1.5%. New Zealand closed down 0.6%. South Korea closed down 0.4%. Singapore closed down 1.4%. Taiwan closed down 0.2%. Thailand closed down 1.4%.

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NOTE: To gain access call our subscription office at 1-386-943-4081 (week-days only). If you can afford two cups of coffee a week you can afford the cost of 25.95 a month ($6.50 a week). For that you also receive the full Street Smart Report advisory service (newsletter, hotlines, in depth mid-week reports on stocks, gold ,bonds, etc.). Or to subscribe online click here:https://streetsmart.securesites.net/order.html


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Markets This Morning:

European markets are down sharply again this morning.

The Europe Dow is down 2.2%.

The London FTSE is down 1.6%. The German DAX is down 1.5%. France’s CAC is down 2.0%. Belgium is down 2.6%. Denmark is down 3.0%. Finland is down 1.9%. Greece is down 1.5%. Ireland is down 2.1%. Italy is down 3.3%. Netherlands is down 2.4%. Norway is down 3.1%. Portugal is down 4.0%. Spain is down 3.5%. Switzerland is down 2.5%.

This Morning in the U.S. Market:

Oil is down $1.20 a barrel, at $80.58

Gold is down $6 an ounce at $1,239 an ounce.

This week’s Economic Reports:

This is a fairly busy week for U.S. economic reports, including Retail Sales, Producer Price Index, Industrial Production, Housing Starts, etc. To see the full list and times click here, and look at the left side of the page it takes you to.

The reports have been primarily negative so far.

There were no reports on Monday.

Tuesday’s only U.S. report was that the Small Business Optimism Index fell from 96.1 in August to 95.3 in September. From Europe came reports that the German ZEW Economic Sentiment Index fell from +6.9 in September to –3.6 in October, its first time in negative territory since 2012. And inflation in the U.K. fell from 1.5% in August to 1.2% in September.

Yesterday’s reports were that overall mortgage applications rose 5.6% last week thanks to the drop in mortgage rates. But it was due entirely to applications for refinancing of existing mortgages, which were up 10.6%, while apps for home purchases fell 0.7%. The Empire State (NY) Mfg Index plunged from 27.5 in September to 6.2 in October. Retail Sales declined 0.3% in September, the first monthly negative reading since last winter’s sharp economic slowdown. And the Producer Price Index was negative by –0.1% in September, for the first in more than a year, moving opposite to the Fed’s target of 2.0%+. The ‘core rate’, which excludes food and energy, was unchanged for the month.

This morning’s reports so far are that weekly unemployment claims fell again last week, declining by 23,000 to 264,000, the lowest level in 14 years, much better than the consensus forecast of an increase to 289,000. And Industrial Production was up 1.0% in September, beating the consensus forecast for a gain of 0.4%.

Still to come are the Phila Fed Index, and the Housing Market Index, measuring the sentiment of home-builders, both of which will be released at 10 am.

Our Pre-open Indicators:

Our pre-open indicators are pointing to the Dow being down 170 points or so in the early going.

I’ll be back with the next post on Saturday morning, as usual later than on the week-days, probably around 12 noon.

To read my weekend newspaper column, click here:  Can the Fed Come to the Rescue Again if Needed

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, there will be an in-depth Markets Update (stocks, bonds, gold) tomorrow in your secure area of the Street Smart Report website.

Non-Subscribers:

If you haven’t done so yet, check out our new bull market/bear market indicator (BBMI) by clicking here: Market Timing Strategy

SUBSCRIBE NOW! To get all of this:

(The equivalent of four or five normal newsletters at the cost of one)

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  • A 6-page Mid-Week Markets Report every week.
  • A 4 to 6 page Gold, Bonds, U.S. Dollar Report every three weeks.
  • A 4 to 6 page Global Market Report every three weeks.
  • The 8-page Street Smart Report newsletter every 3 weeks.
  • Hotline Updates whenever signals or recommendations change.
  • Two specific portfolios (Seasonal Timing & Technical Analysis Timing)
  • Sy’s weekly column on markets and the economy every Friday.

Market, sector, stock, gold, bond, and dollar buy and sell signals, short-sales, long-side and ‘inverse’ etf’s, mutual funds. Highly regarded and in our 26th year. As a bonus for a one-year subscription you will also receive my latest book Beat the Market the Easy Way- Proven Seasonal Strategies That Double the Market’s Performance. Click here for subscription information.

This blog appears every Tuesday, Thursday, and Saturday morning!

 **** End of Today’s post*****

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