The bull and bear tug-of-war.

Tuesday, June 17, 9:25 a.m.

The bulls see the economy gaining strength as home prices surge and employment grows, while the Fed continues to have the market’s back with stimulus it will keep in place until 2014, and then taper back slowly only after the economy has reached the point it can clearly stand on its own.

The bulls point to how resilient the market is even with the recent talk of the Fed possibly tapering back on its stimulus sooner than previously thought.

061813c 

The bears see the economy and markets living dangerously, like drug addicts dependent on periodic injections of stimulants by the Fed, with markets shaken at even a hint that their fixes may be tapered back.

The bears point to how markets outside the U.S. have had a quite different reaction to the new uncertainties introduced by Fed Chairman Bernanke’s warnings on May 22, and believe they have it right.

061813d

The bulls are convinced Bernanke will set things right again in his press conference tomorrow afternoon, by assuring markets that QE will remain in place for some time to come.

The bears also expect Chairman Bernanke to soften his warning that if the Fed sees improvement in the economy it “could in the next few meetings take a step down in our pace of purchases”, providing assurances it will remain in place because the economy is not yet close to being able to stand on its own.

But they wonder how he can back-track on his other statement in the same testimony before Congress that, “Fiscal policy at the federal level has become significantly more restrictive. . . . . . In particular the expiration of the payroll tax -cut rate, the enactment of tax increases, the effects of the budget caps on discretionary spending, the onset of sequestration, and the declines in defense spending; and are expected, collectively, to exert a substantial drag on the economy this year. . . . The Federal Reserve’s monetary policy does not have the capacity to fully offset an economic headwind of this magnitude.

Short-term market patterns.

Last week was the week before the quarter’s quadruple-witching expirations week, and they tend to be negative.

This week is the week of the expirations (on Friday) and they tend to be positive.

Next week is the week after the expirations and they tend to be negative.

Continuing volatility?

To read my weekend newspaper column click hereWhat If The Secular Bear Market Is Not Over- 

Subscribers to Street Smart Report: The new issue of the newsletter will be available this afternoon (a day early) in your secure area of the Street Smart Report website.

Yesterday in the U.S. Market.

Considerable intraday volatility. The Dow was up as much as 190 points by early afternoon but then sold off sharply and was up only 50 points late in the afternoon, looking like another negative downside reversal day in the making. But buy-programs came in late in the day to close it up 109 points, only 80 points off its intraday high. Volume was average at 0.7 billion shares traded on the NYSE.

The Dow closed up 109 points, or 0.7%. The S&P 500 closed up 0.8%. The NYSE Composite closed up 0.8%. The Nasdaq closed up 0.8%. The Nasdaq 100 closed up 0.9%. The Russell 2000 closed up 0.7%. The DJ Transportation Avg. closed down 0.2%. The DJ Utilities Avg closed up 0.5%.

Gold closed down $5 an ounce to $1,383.

Oil closed down $.08 at $97.77 a barrel.

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

The U.S. Treasury bond etf TLT closed down 0.5%.

Yesterday in European Markets.

European markets closed well off early highs but still quite positive yesterday.

The Europe Dow closed up 0.9%. Among individual countries, the London FTSE closed up 0.4%. The German DAX closed up 1.1%. France’s CAC closed up 1.5%. Belgium closed up 0.9%. Greece closed down 1.3%. Italy closed up 0.3%. The Netherlands closed up 0.8%. Norway closed up 0.8%. Portugal closed up 1.3%. Spain closed up 0.8%. Switzerland closed up 1.2%. Russia closed up 2.0%.

Asian Markets closed mixed last night.

The DJ Asia-Pacific Index closed down 0.4%.

Among individual markets:

Australia closed down 0.2%. China closed up 0.1%. Hong Kong closed unchanged. India closed down 0.5%. Indonesia closed up 1.4%. Japan closed down 0.2%. Malaysia closed up 0.2%. New Zealand closed up 0.3%. S. Korea closed up 0.9%. Singapore closed up 1.5%. Taiwan closed up 0.2%. Thailand plunged 3.0%.

Subscribers Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

In the premium content area this morning: The U.S. stock market, gold, and bonds, signals and analysis of each.


*Premium Content*

Please Login or Subscribe to view this content.

Markets This Morning:

European markets are fractionally positive this morning.

The Europe Dow is up 0.1%. Among individual countries the London FTSE is up 0.9%. The German DAX is up 0.1%. France’s CAC is down 0.1%. Belgium is down 0.1%. Norway is up 0.3%. Portugal is up 0.5%. Spain is up 0.7%. Switzerland is down 0.2%. Italy is up 0.6%. Russia is up 1.2%.

Oil is up $.30 a barrel, at 98.07.

Gold is down $10 an ounce at $1,373.

This Morning in the U.S. Market:

This week will be an average week for important economic reports that include New Housing Starts, Existing Home Sales, the Phila Fed Index, the Fed’s announcement after its FOMC meeting, Chairman Bernanke’s press conference, etc. To see the full list and times click here, and look at the left side of the page it takes you to.

Yesterday’s reports were that the Empire State (NY) Mfg Index improved in June, rising to +7.8 from negative –1.4 in April. But most of the other indexes in the survey declined. The key new-orders index fell to –6.7 from –1.2 in May. Shipments declined to –11.8 in June from flat in May, and labor market conditions in the New York state area worsened. And the NAHB Housing Market Index, which measures the confidence of national home-builders, rose to 52 in June, its first reading above the level of 50 that indicates 50% of builders are optimistic, since the real estate bubble burst in 2006.

This morning’s reports are that the Consumer Price Index rose 0.1% in May. The core rate was up 0.2%. And New Housing Starts were up 6.8% in May to 914,000, recovering only part of the big drop in April of 14.8%. The May number was well short of the consensus forecast of a953,000 starts. And permits for future starts fell 3.1% in May.

But the market is still focused on what Fed Chairman Ben Bernanke will say in his press conference tomorrow to reverse the harm he caused with his warnings in mid-May regarding the possibility of beginning to taper back on QE stimulus sooner than previous expected.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being down 15 points or so in the early going this morning, not meaningful as to direction.

To read my weekend newspaper column click hereWhat If The Secular Bear Market Is Not Over- 

Subscribers to Street Smart Report: The new issue of the newsletter will be available this afternoon (a day early) in your secure area of the Street Smart Report website.

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

Non-Subscribers:

We can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

SUBSCRIBE NOW! To get all of this:

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

  • 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)
  • 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.
  • Sy’s weekly column on markets and the economy every Friday.
  • Access to Premium Content area of this Blog, Tuesday, Thursday, and Saturday a.m.

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*****

The importance of the Fed’s QE in chart form.

Saturday, June 15, 11:15 a.m.

The following chart is courtesy of Jeff Grundlach, founder and CEO of DoubleLine funds ($55 billion under management).

It shows how closely the S&P 500 has tracked with the increases and decreases in the Fed’s balance sheet since 2009 as it has let QE programs expire, and then rushed in with new QE bond and mortgage-related buying programs (QE2, QE3, QE-Infinity) when the economy and stock market stumbled. 

 

It does indicate the risk to the economy and market when the Fed eventually begins to dial back on its bond-buying, and then as it will eventually have to, actually reverses to selling the assets off its balance sheet.

It also indicates why the Fed will be very reluctant to move beyond just talking about it to actually taking action, and why as I have been saying I believe that will not be seen until early 2014 (after Bernanke has been replaced by the next Fed Chair, probably Janet Yellen).

If you’d like to see a number of other interesting charts on U.S. and global economies and markets that you’re not likely to see elsewhere, click on this link to an article by Mamta Dagkar on Business Insiders this morning http://www.businessinsider.com/david-rosenberg-global-concerns-charts-2013-6 . I suggest once you get to the article that you click on the ‘View as one page’ option.

 

Fed will blow back next week against market fear Bernanke created.

Global markets outside of the U.S. have declined sharply since mid-May when Ben Bernanke told Congress that the Fed could begin to dial back its quantitative easing as soon as in coming months.

While Bernanke probably used the occasion to try to cool off overheating markets, he can’t afford to raise concerns among investors and consumers so much that the already stumbling economic recovery is jeopardized any further.

So the Fed’s statement after its June FOMC meeting next week, and particularly Bernanke’s press conference afterwards (Wednesday afternoon) is widely expected to be devoted to reassuring markets that he did not mean what he said.

He meant to say that dialing back QE would not be considered until the economy shows signs of being able to go it alone, and that’s not likely before at least early 2014.

He will certainly disappoint markets again if he does not back-track from his earlier warning.

But has damage already been done by taking some of the euphoria and confidence out of markets, and having investors looking at some of the conditions that have been created while they were focused entirely on the power of the Fed and its stimulus?

Other Voices.

Financial Times: “Storms over Japan and emerging markets; squalls in the U.S. and Europe. . . . . . Measures of market volatility are signaling some of the choppiest conditions since 2008. Higher volatility could prove as significant as actual falls in asset value, analysts warn. . . . . . Unless calm returns, unstable conditions could drive investors out of markets and undermine central banks’ global efforts to steer economies”.

The Economist: “The prospect of less quantitative easing in America has rocked currency and bond markets in the emerging world. . . . . In the past month 19 of 24 emerging-market currencies have fallen in value against the dollar. The trigger was a remark in May by the chairman of the Federal Reserve, Ben Bernanke, that the Fed’s purchases of bonds might soon tail off. . . . It seems a violent response to what was an offhand comment . Mr. Bernanke did not suggest an immediate change of policy. An increase by the Fed in short-term interest rates, currently near zero, may still be years away. . . . Even so, markets look ahead, and even the prospect of a tapering probably marks the start of a long grind upwards in rates.”

The Times of London: “The political deadlock in Washington has dented America’s growth prospects and threatens to derail the recovery in the world’s largest economy, the IMF said yesterday. The IMF criticized politicians for imposing harsh spending cuts that have significantly reduced growth prospects in the U.S.”

The Wall Street Journal, Jason Zweig: “If you are an investor and aren’t on the verge of retirement, your fondest wish should be another whiff of fear that will tip even more assets into the bargain bin. . .  Investors should welcome the falling prices that make assets cheaper.” 

To read my weekend newspaper column click hereWhat If The Secular Bear Market Is Not Over-

Subscribers to Street Smart Report: In addition to the charts and recommendations in the subscribers’  ‘Premium Content’ area of this blog, the new issue of the newsletter will be out on Wednesday in the subscriber’s area of the Street Smart Report website.

Yesterday in the U.S. Market.

Another triple-digit day as day-to-day volatility continues. (Ten of last 14 days have been triple-digit moves in one direction or the other). Volume remained relatively light with 0.6 billion shares traded on the NYSE.

The Dow closed down 105 points, or 0.7%. The S&P 500 closed down 0.6%. The NYSE Composite closed down 0.7%. The Nasdaq closed down 0.6%. The Nasdaq 100 closed down 0.6%. The Russell 2000 closed down 0.8%. The DJ Transportation Avg. closed down 0.5%. The DJ Utilities Avg closed up 0.1%.

Gold closed up $9 an ounce to $1,389.

Oil closed up $1.11 to $97.80 a barrel.

The U.S. dollar etf UUP closed down 0.1%.

The U.S. Treasury bond etf TLT closed down 0.2%.

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

The DJ Asia-Pacific Index closed up 0.9% Thursday night (Friday in Asia). But it wasn’t enough to offset another negative week.

Among individual Asian markets:

Australia closed up 1.9%. China closed up 0.6%. Hong Kong closed up 0.4%. India closed up 1.9%. Indonesia closed up 3.3%. Japan closed up 1.9%. Malaysia closed up 1.0%. New Zealand closed up 0.4%. South Korea closed up 0.4%. Singapore closed up 1.0%. Taiwan closed down 0.2%. Thailand closed up 4.4%.

Yesterday in European Markets.

European markets closed up fractionally yesterday but also not near enough to prevent another negative week.

The Europe Dow closed up 0.4%. Among individual countries; The London FTSE closed up 0.1%. The German DAX closed up 0.4%. France’s CAC closed up 0.2%. Belgium closed up 0.8%. Finland closed up 1.1%. Greece closed up 2.5%. Ireland closed up 1.1%. Italy closed up 0.2%. The Netherlands closed up 0.2%. Spain closed down 0.1%. Switzerland closed up 0.1%. Russia closed up 1.9%.

Global markets for the week.

THIS WEEK (June 14)
DJIA 15070 - 1.2%
S&P 500 1626 - 1.0%
NYSE 9263 - 1.0%
NASDAQ 3423 - 1.3%
NASD 100 2943 - 1.6%
Russ 2000 981 - 0.6%
DJTransprts 6309 - 0.5%
DJ Utilities 485 - 0.3%
XOI Oils 1,361 - 1.7%
Gold bull. 1,389 + 0.6%
GoldStcks 102.56 - 2.9%
Canada 12187 - 1.5%
London 6308 - 1.6%
Germany 8127 - 1.5%
France 3805 - 1.7%
Hong Kong 20969 - 2.8%
Japan 12686 - 1.5%
Australia 4775 + 1.0%
S. Korea 1889 - 1.8%
India 19177 - 1.3%
Indonesia 4760 - 2.2%
Brazil 49464 - 4.4%
Mexico 39268 - 2.4%
China 2262 - 2.2%
LAST WEEK (June 7)
DJIA 15248 + 0.9%
S&P 500 1643 + 0.8%
NYSE 9355 + 0.6%
NASDAQ 3469 + 0.4%
NASD 100 2990 + 0.3%
Russ 2000 987 + 0.4%
DJTransprts 6343 + 0.8%
DJ Utilities 487 + 1.0%
XOI Oils 1,385 + 0.1%
Gold bull. 1,381 - 0.5%
GoldStcks 105.62 - 1.6%
Canada 12373 - 2.2%
London 6411 - 2.6%
Germany 8254 - 1.1%
France 3872 - 1.9%
Hong Kong 21575 - 3.7%
Japan 12877 - 6.5%
Australia 4729 - 3.8%
S. Korea 1923 - 3.9%
India 19429 - 1.7%
Indonesia 4865 - 4.0%
Brazil 51750 - 3.3%
Mexico 40231 - 3.3%
China 2314 - 3.9%
PREVIOUS WEEK (May 31)
DJIA 15115 - 1.2%
S&P 500 1630 - 1.2%
NYSE 9302 - 1.5%
NASDAQ 3455 - 0.1%
NASD 100 2981 - 0.3%
Russ 2000 984 unchgd
DJTransprts 6290 - 1.6%
DJ Utilities 482 - 3.4%
XOI Oils 1,384 - 0.9%
Gold bull. 1,388 + 0.3%
GoldStcks 107.36 + 6.7%
Canada 12650 - 0.1%
London 6583 - 1.1%
Germany 8348 + 0.5%
France 3948 - 0.2%
Hong Kong 22392 - 1.0%
Japan 13774 - 5.7%
Australia 4914 - 1.0%
S. Korea 2001 + 1.4%
India 19760 + 0.3%
Indonesia 5068 - 1.7%
Brazil 53506 - 5.2%
Mexico 41588 + 2.6%
China 2408 + 0.5%

Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

In the Premium Content area this morning. The U.S. stock market, gold, and bonds.


*Premium Content*

Please Login or Subscribe to view this content.

Next week’s Economic Reports:

Next week will be an average week for important economic reports that will include New Housing Starts, Existing Home Sales, the Phila Fed Index, the Fed’s announcement after its FOMC meeting, Chairman Bernanke’s press conference, etc. To see the full list and times click here, and look at the left side of the page it takes you to.

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

To read my weekend newspaper column click hereWhat If The Secular Bear Market Is Not Over-

Subscribers to Street Smart Report: In addition to the charts and recommendations in the subscribers’  ‘Premium Content’ area of this blog, the new issue of the newsletter will be out on Wednesday in the subscriber’s area of the Street Smart Report website.

Non-Subscribers:

We can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

SUBSCRIBE NOW! To get all of this:

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

  • 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)
  • 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.
  • Sy’s weekly column on markets and the economy every Friday.
  • Access to Premium Content area of this Blog, Tuesday, Thursday, and Saturday a.m.

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 and at occasional times in between! Follow it via the RSS feed or follow it in Twitter (the ‘handle’ is @streetsmartpost) so you won’t miss any posts.

**** End of Today’s post*****

Global market collapses finally get some attention.

Thursday, June 13, 9:25 a.m.

Global markets outside of the U.S. have been in significant negative divergences with the U.S. market for most of the year, with their downturns accelerating even as the U.S. market climbed to successive new highs.

Even since topping out mid-May the U.S. market has remained resilient, only reluctantly pulling back 3 or 4%.

But finally, this week analysts are all over the global collapses as being something potentially important, as in can the U.S. stand up alone if global economies and markets are tanking seriously.

It seems to have taken the bursting of the bubble in the Japanese market to finally get the U.S. market to look beyond our borders.

And it shouldn’t be liking what it sees.

It’s not just the breaking of short-term support levels like 50-day moving averages that should be getting attention. 

061313c

But the potential damage to the intermediate-term outlook, with sell signals triggered on intermediate-term indicators some months ago, and important markets having broken beneath not only short-term 50-day moving averages, but also intermediate-term 20-week m.a.’s.

061313b

The collapses in the markets of the large economies like China, Japan, the eurozone, Brazil, Hong Kong, India, etc., are of enough concern.

But in the last two weeks the spread of the collapses to the emerging market countries (that were supposed to remain strong no matter what happened in developed countries) has become more obvious. 

As we have been pointing out since the beginning of the year, although widely touted by Wall Street as the place to be this year, the emerging markets were looking quite sick.

And in the last couple of weeks the head and shoulders top that was potentially forming has completed, with emerging markets plunging below the ‘neckline’ (the blue line), signaling more decline is likely.

061313a

It is a very important question for the U.S. market whether it can be expected to continue its resilience as more and more global markets collapse further, into bear markets.

This might be a good time to have another look at the studies of how global markets tend to move in tandem seasonally: Market’s Seasonal Patterns in Global Markets!

To read my weekend newspaper column click hereWhich Way For Gold From Here-

Subscribers to Street Smart Report: There is an important hotline from last evening and an in-depth ‘U.S. Market Signals and Recommendations Update’ in your secure area of the Street Smart Report website.

Yesterday in the U.S. Market.

A quite ugly day. The third significant downside reversal day in recent weeks. The Dow was up as much as 120 points in the early going and then reversed to the downside and closed down 126 points, closing just about on its low for the day. Volume was about average at 0.7 billion shares traded on the NYSE.

The Dow closed down 126 points, or 0.8%. The S&P 500 closed down 0.8%. The NYSE Composite closed down 0.7%. The Nasdaq closed down 1.1%. The Nasdaq 100 closed down 1.1%. The Russell 2000 closed down 0.9%. The DJ Transportation Avg. closed down 0.7%. The DJ Utilities Avg closed down 0.9%.

Gold closed up $10 an ounce to $1,392.

Oil closed down $.21 at $95.88 a barrel.

The U.S. dollar etf UUP closed down 0.1%.

The U.S. Treasury bond etf TLT closed down 1.4%.

Yesterday in European Markets.

European markets mostly closed down again yesterday.

The Europe Dow closed down 0.2%. Among individual countries, the London FTSE closed down 0.6%. German DAX closed down 1.0%. France’s CAC closed down 0.4%. Belgium closed down 0.4%. Italy closed down 1.6%. The Netherlands closed down 0.8%. Norway closed up 0.8%. Portugal closed down 0.1%. Spain closed up 0.4%. Switzerland closed down 0.2%. Russia closed down 0.4%.

Asian Markets closed down sharply again last night.

The DJ Asia-Pacific Index closed down 1.6%.

Among individual markets:

Australia closed down up 0.7%. China closed down 2.8%. Hong Kong closed down 2.2%. India closed down 1.1%. Indonesia closed down 1.9%. Japan plunged another 6.3%. Malaysia closed down 1.9%. New Zealand closed down 0.9%. S. Korea closed down 1.4%. Singapore closed down 0.7%. Taiwan closed down 2.0%. Thailand closed down 2.1%.

Subscribers Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

In the premium content area this morning: The U.S. stock market, gold, and bonds, signals and analysis of each.


*Premium Content*

Please Login or Subscribe to view this content.

Markets This Morning:

European markets are well off earlier lows and are now mixed this morning.

The Europe Dow is down 0.4%. Among individual countries the London FTSE is down 0.2%. The German DAX is down 0.6%. France’s CAC is now up 0.1%. Belgium is up 0.1%. Norway is down 0.7%. Portugal is down 0.9%. Spain is down 0.4%. Switzerland is down 0.4%. Italy is now up 0.4%. Russia is down 1.2%.

Oil is down $.34 a barrel, at $95.51.

Gold is down $12 an ounce at $1,380.

This Morning in the U.S. Market:

This week is a very light week for important economic reports, but they will include the Producer Price Index, Retail Sales, Consumer Sentiment, and a few others. 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 Monday.

Tuesday’s only report is that the NFIB Small Business Optimism Index rose to 94.4 in May from 92.1 in April, its highest level since the recession.

There were no reports yesterday.

This morning’s only reports are that new weekly unemployment claims fell by 12,000 last week to 334,000. The 4-week m.a. fell by 7,250 to 345,250. And Retail Sales were up 0.6% in May, slightly better than the consensus forecast of 0.5%.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being flat at the open this morning.

To read my weekend newspaper column click hereWhich Way For Gold From Here-

Subscribers to Street Smart Report: There is an important hotline from last evening and an in-depth ‘U.S. Market Signals and Recommendations Update’ in your secure area of the Street Smart Report website.

I’ll be back with the next regular blog post on Saturday morning, as usual later than on the week-days, probably around 11.00 a.m.

Non-Subscribers:

We can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

SUBSCRIBE NOW! To get all of this:

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

  • 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)
  • 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.
  • Sy’s weekly column on markets and the economy every Friday.
  • Access to Premium Content area of this Blog, Tuesday, Thursday, and Saturday a.m.

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*****

Signs of a Top?

Tuesday, June 11, 9:25 a.m.

Let’s see now. The S&P 500 is within 1.5% of its peak of May 22, and just found support at its 50-day moving average to have held again, bouncing off it sharply on Friday in reaction to the monthly jobs report.

061113b

What’s not to like about the situation?

Not a thing according to investor sentiment, which is very bullish and confident. As noted on Saturday, the poll of its members by the American Association of Individual Investors shows the highest allocation of assets to the stock market since September, 2007.

Investors are so confident that margin debt, buying stocks with 50% down payments, is at a record level.

According to the latest consumer confidence reports, American consumers are more confident than they’ve been since before the 2007-2009 recession.

The Investment Company Institute reported recently that young investors, those who began investing in the last ten years, in some pretty scary times for the stock market, were less willing to take financial risks until last year. But last year 62% of investors in their 20’s had 80% or more of their 401K holdings in equities, compared to only 48% invested as aggressively in 2007.

So what’s to worry about? How can the market go anywhere but up with so much bullishness and confidence to support it?

And what’s with the heavy insider selling? What are they worried about?

Well, there is the fact that those levels of confidence not seen since 2007, are warnings in and of themselves, since extremes of investor bullishness, consumer confidence, margin debt, and so on, are always present near market tops.

Then there is the fact that looking at the long-term picture of the S&P 500, there are two situations. The S&P is overbought above its long-term 200-day moving average to a degree that in the past almost always resulted in a pullback to at least retest the support at the m.a., which would be a decline to about 1,500. 

061113c

And it is also back to and fractionally above its serious peaks of 2000 and 2007. That is okay if the secular bear market that began in 2000 has ended.

But if the secular bear market has not ended, the current situation of the S&P 500 looks ominously similar to the pattern of the last secular bear market of 1965-1982, when the Dow returned to its previous two peaks in 1973, and broke out to a fractional new high in 1973, which had investors excited, bullish, and convinced that secular bear was over. But the next cyclical bear market was even worse than the previous two.

061113d

Could Washington finally moving to reverse its massive fiscal stimulus of five years of unprecedented government debt spending and tax cuts, and the Federal Reserve beginning to reverse its equally unprecedented monetary policy of QE stimulus and record low interest rates, wind up being the catalysts for a next bear market?

Then there is the continuing collapse of global markets outside the U.S. Are they seeing serious negatives in global economic conditions that U.S. markets are either ignoring, or believe won’t affect the U.S.?

TO BE CONTINUED.

To read my weekend newspaper column click hereWhich Way For Gold From Here-

Subscribers to Street Smart Report: There will be an in-depth ‘U.S. Market Signals and Recommendations Update’ tomorrow in your secure area of the Street Smart Report website.

Yesterday in the U.S. Market.

A quiet, flat, and mixed day on low volume of only 0.6 billion shares traded on the NYSE.

The Dow closed down 9 points, or 0.1%. The S&P 500 closed down 0.1%. The NYSE Composite closed up 0.1%. The Nasdaq closed up 0.1%. The Nasdaq 100 closed down 0.1%. The Russell 2000 closed up 0.5%. The DJ Transportation Avg. closed down 0.2%. The DJ Utilities Avg closed down 0.3%.

Gold closed up $3 an ounce to $1,385.

Oil closed down $.21 at $95.82 a barrel.

The U.S. dollar etf UUP closed up 0.1%.

The U.S. Treasury bond etf TLT closed down 0.5%.

Yesterday in European Markets.

European markets mostly closed down again yesterday.

The Europe Dow closed down 0.5%. Among individual countries, the London FTSE closed down 0.2%. German DAX closed up 0.6%. France’s CAC closed down 0.2%. Belgium closed down 0.4%. Italy closed down 0.8%. The Netherlands closed up 0.1%. Norway closed down 0.4%. Portugal closed down 0.7%. Spain closed down 0.5%. Switzerland closed up 0.1%. Russia closed down 0.2%.

Asian Markets closed down again last night.

The DJ Asia-Pacific Index closed down 0.3%.

Among individual markets:

Australia closed up 0.4%. China closed down 1.4%. Hong Kong closed down 1.2%. India closed down 1.5%. Indonesia closed down 3.5%. Japan closed down 1.5%. Malaysia closed down 0.7%. New Zealand closed down 0.2%. S. Korea closed down 0.6%. Singapore closed down 0.9%. Taiwan closed down 0.5%. Thailand plunged 5.0%.

Subscribers Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

In the premium content area this morning: The U.S. stock market, gold, and bonds, signals and analysis of each.


*Premium Content*

Please Login or Subscribe to view this content.

Markets This Morning:

European markets are down quite sharply again this morning.

The Europe Dow is down 1.0%. Among individual countries the London FTSE is down 1.8%. The German DAX is down 1.8%. France’s CAC is down 2.0%. Belgium is down 1.6%. Norway is down 1.4%. Portugal is down 2.0%. Spain is down 2.5%. Switzerland is down 2.0%. Italy is down 2.2%. Russia is down 2.0%.

Oil is down $1.39 a barrel, at 94.38.

Gold is down $18 an ounce at $1,367.

This Morning in the U.S. Market:

This week is a very light week for important economic reports, but they will include the Producer Price Index, Retail Sales, Consumer Sentiment, and a few others. 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 report is that the NFIB Small Business Optimism Index rose to 94.4 in May from 92.1 in April, its highest level since the recession.

But this morning the market seems to be back to concern about the Fed scaling back its stimulus, on top of the continuing collapse of global markets.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being down 125 points or so in the early going this morning.

To read my weekend newspaper column click hereWhich Way For Gold From Here-

Subscribers to Street Smart Report: There will be an in-depth ‘U.S. Market Signals and Recommendations Update’ tomorrow in your secure area of the Street Smart Report website.

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

Non-Subscribers:

We can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

SUBSCRIBE NOW! To get all of this:

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

  • 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)
  • 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.
  • Sy’s weekly column on markets and the economy every Friday.
  • Access to Premium Content area of this Blog, Tuesday, Thursday, and Saturday a.m.

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*****

One day jobs report bounce or end of pullback?

Saturday, June 8, 11:45 a.m.

The S&P 500 had pulled back to the potential support at its 50-day m.a., which met the consensus forecast for just a brief pullback of 3 or 4%.

And with the big rally yesterday it seems to have found the 50-day m.a. to be support again.

060813a

Or could it be just the first half of a typical reaction to yesterday’s positive jobs report? With the negative ADP jobs report on Wednesday, the ‘whisper number’ for yesterday’s Labor Department report had been lowered significantly. So the positive report was a surprise.

And as I said in Thursday’s blog:

“For many years we have referred to the Labor Department report as The Big One! We do so because, although many hours and words are wasted on trying to predict its numbers, it is in fact not predictable. It comes in with a surprise in one direction or the other more often than any other set of numbers. And as a result it most often creates a one to three-day triple digit move by the Dow in one direction or the other.

The other side of the pattern is that whatever is the original direction in reaction to the report is usually reversed over the subsequent few days, and the market returns to whatever was its focus prior to the report.”

So was yesterday’s triple-digit rally day just the first half of that pattern with the second half to follow, or the end of the pullback and a bottom for a new leg up?

Global market plunges continue.

As shown in the weekly market performance table further down in this report, yesterday’s big rally in the U.S. and Europe in reaction to the jobs report, was enough to close the U.S. market fractionally positive for the week, the S&P 500 up 0.8% for the week.

But the global market plunges continued. And they include the world’s largest economies behind the U.S. For instance, China, the world’s 2nd largest economy saw its market down 3.9% for the week, Japan, the world’s 3rd largest economy, down 6.5%, Brazil down 3.3%, Hong Kong down 3.7%, and so on.

And none of them came close to finding their 50-day moving average to be support.

060813b

The divergence with the U.S. market continues.

Investor Sentiment.

Sentiment as measured by Consensus Inc. (major brokerage firms and professional advisors); the Investors Intelligence Sentiment Index (investment newsletters); Market Vane (futures traders); the VIX Index (options traders), etc., tend to be fairly stable, rising or falling over fairly long periods, and often remaining close to peaks or troughs for weeks and months.

But the poll of its members by the American Association of Individual Investors, tends to considerable volatility, usually reflecting whatever has happened in the market in the last one to three weeks.

So while the AAII poll is also helpful in assessing risk (sentiment by all methods of measuring tends to be extremely bullish near market tops, and bearish at correction bottoms) the AAII poll is less useful, tending to jump back and forth a lot short-term between bullishness and bearishness when volatility comes into the market.

For instance, in April after the market had been down for several weeks, the AAII poll showed 54.5% were bearish, only 19.3% bullish. A few weeks later, after a couple of weeks of rally, the poll reversed dramatically to only 21.6% bearish, and 48.9% bullish.

Recently, as the market has demonstrated uncertainty, seesawing between rally days and weeks and correction days and weeks, that short-term activity also shows in the AAII poll. Two weeks ago it showed 35.97% bullish, 29.64% bearish. This past week it showed 29.47% bullish, 38.95% bearish, both readings pretty much neutral and uncertain.

But maybe we should be looking at the AAII polls in a different manner, looking at changes taking place in what individual investors are doing rather than what they are saying.

Because while by most measurements investor sentiment is at levels of high bullishness and confidence, the most recent AAII poll shows individual investors say they are not overly bullish or bearish.

However, AAII also produces surveys of how its individual investor members have their assets allocated between stocks, bonds, and cash. And what they seem to be doing paints a different picture than what they are saying about their bullishness or bearishness.

Here’s what AAII says about the current asset allocations of its members:

“Equity allocations nearly hit a six-year high last month. . . . Cash allocations, meanwhile, fell to a level not seen since 2010. . . . Stock and stock fund allocations rose 3.5 percentage points to 65.2%. . . . . This was the largest allocation to equities since September 2007.”

Whoops. On average, investors had been pulling money out of stocks and equity mutual funds throughout the bull market that began in 2009, and just began pouring money back into the market late last year, and have continued to do so as the rally off the November low has been so impressive.

And now the AAII says that last month its members already had the largest allocation to stocks and equity mutual funds since September, 2007 (which was a month before the 2003-2007 bull market topped out)?

So perhaps the sentiment of AAII members is not as much out of synch with other measurements of investors sentiment as its weekly poll of what its members say about their bullishness and bearishness seems to indicate.

Other Voices.

Financial Times: “Bill Gross [founder of PIMCO’s giant bond fund] is not so alarmed about bonds. He says higher yields are still a year or two away as the global economy is still struggling to grow, so official interest rates are likely to remain low. So while two years ago he shunned US government debt, he has now poured it into his bond fund as one of the least-worst assets to own in a financial world full of bubbles.”

Michael Feroli, J.P. Morgan Chase: "Adding it all up, today’s employment report has a little something for everyone. If the last week or two of soggy data generated renewed fears, today’s report should help to mollify those concerns."

Comstock Partners: The recent return of high volatility to the stock market, bond market and currencies suggest the end of the rally that started in November and probably to the upsurge since the March 2009 bottom.  The market now appears to be entering a lose-lose situation where economic growth is bad since it forces the Fed to “taper’ its bond buying program, a move that investors, as they have most emphatically demonstrated this week, do not like one bit.  On the other hand, if the economy continues its tepid pace (or worse), as we think it will, employment won’t meet the Fed’s goals, and earnings will take a dive.  In the latter case, the Fed would likely delay tapering of its bond-buying program and investors will interpret bad news on the economy for what it is—-bad news.”

Business Insiders: “Shares of companies highly sensitive to interest rates, including homebuilders and real estate investment trusts, have been hit especially hard. But most stocks have moved lower since May 22, when the advance-decline line for S&P 1500 stocks peaked."

The Economist: “The protracted weakness especially in southern Europe is inflicting social misery. Unemployment reached 12.2% of the workforce in the euro area in April, and is around 27% in Greece and Spain and close to 18% in Portugal. Such high rates of joblessness are politically perilous, too. But what is most corrosive of all is loss of hope as the lost decade continues.”

The Globe and Mail (Canada): “Market forecast: Bullish, with a chance of disaster. Stocks have rebounded from the worst downturn of the year, but there is no indication that the concerns hanging over the market have suddenly cleared. Most of the attention is centered on the S&P 500, which hit a record intraday high on May 22 but then slumped more than 5 per cent in just 11 trading days. That’s not exactly market carnage, but it interrupts what has been a remarkably smooth ride over the past six months.”

To read my weekend newspaper column click hereWhich Way For Gold From Here-

Subscribers to Street Smart Report: In addition to the charts and recommendations in the subscribers’  ‘Premium Content’ area of this blog, there are in-depth updates on the U.S. market, Global Markets, gold, and bonds from this week in the subscriber’s area of the Street Smart Report website.

Yesterday in the U.S. Market.

A strong rally in reaction to the jobs report. Volume remained relatively light with 0.7 billion shares traded on the NYSE.

The Dow closed up 207 points, or 1.4%. The S&P 500 closed up 1.3%. The NYSE Composite closed up 1.0%. The Nasdaq closed up 1.3%. The Nasdaq 100 closed up 1.4%. The Russell 2000 closed up 0.8%. The DJ Transportation Avg. closed up 2.3%. The DJ Utilities Avg closed up 0.8%.

Gold plunged $35 an ounce to $1,381.

Oil closed up $1.37 to $96.13 a barrel.

The U.S. dollar etf UUP closed up 0.1%.

The U.S. Treasury bond etf TLT closed down 1.8%.

Asian markets closed down quite sharply again in their last session of the week.

The DJ Asia-Pacific Index closed down 1.0% Thursday night (Friday in Asia).

Among individual Asian markets:

Australia closed down 0.9%. China closed down 1.4%. Hong Kong closed down 1.2%. India closed down 0.5%. Indonesia closed down 0.4%. Japan closed down 1.3%. Malaysia closed up 0.4%. New Zealand closed down 0.4%. South Korea closed down 1.8%. Singapore closed down 0.3%. Taiwan closed unchanged. Thailand closed up 1.7%.

Yesterday in European Markets.

European markets bounced back sharply yesterday but not near enough to salvage another negative week.

The Europe Dow closed up 1.6%. Among individual countries; The London FTSE closed up 1.2%. The German DAX closed up 1.9%. France’s CAC closed up 1.5%. Belgium closed up 1.1%. Finland closed up 0.9%. Greece closed up 0.9%. Ireland closed up 1.3%. Italy closed up 1.0%. The Netherlands closed up 0.9%. Spain closed up 0.6%. Switzerland closed up 2.1%. Russia closed up 1.6%.

Global markets for the week.

Strong rally Friday in U.S. closed U.S. market up fractionally for the week, while bottom continued to fall out of global markets elsewhere.

THIS WEEK (June 7)
DJIA 15248 + 0.9%
S&P 500 1643 + 0.8%
NYSE 9355 + 0.6%
NASDAQ 3469 + 0.4%
NASD 100 2990 + 0.3%
Russ 2000 987 + 0.4%
DJTransprts 6343 + 0.8%
DJ Utilities 487 + 1.0%
XOI Oils 1,385 + 0.1%
Gold bull. 1,381 - 0.5%
GoldStcks 105.62 - 1.6%
Canada 12373 - 2.2%
London 6411 - 2.6%
Germany 8254 - 1.1%
France 3872 - 1.9%
Hong Kong 21575 - 3.7%
Japan 12877 - 6.5%
Australia 4729 - 3.8%
S. Korea 1923 - 3.9%
India 19429 - 1.7%
Indonesia 4865 - 4.0%
Brazil 51750 - 3.3%
Mexico 40231 - 3.3%
China 2314 - 3.9%
LAST WEEK (May 31)
DJIA 15115 - 1.2%
S&P 500 1630 - 1.2%
NYSE 9302 - 1.5%
NASDAQ 3455 - 0.1%
NASD 100 2981 - 0.3%
Russ 2000 984 unchgd
DJTransprts 6290 - 1.6%
DJ Utilities 482 - 3.4%
XOI Oils 1,384 - 0.9%
Gold bull. 1,388 + 0.3%
GoldStcks 107.36 + 6.7%
Canada 12650 - 0.1%
London 6583 - 1.1%
Germany 8348 + 0.5%
France 3948 - 0.2%
Hong Kong 22392 - 1.0%
Japan 13774 - 5.7%
Australia 4914 - 1.0%
S. Korea 2001 + 1.4%
India 19760 + 0.3%
Indonesia 5068 - 1.7%
Brazil 53506 - 5.2%
Mexico 41588 + 2.6%
China 2408 + 0.5%
PREVIOUS WEEK (May 24)
DJIA 15303 - 0.3%
S&P 500 1649 - 1.0%
NYSE 9442 - 1.4%
NASDAQ 3459 - 1.1%
NASD 100 2991 - 1.2%
Russ 2000 984 - 1.2%
DJTransprts 6395 - 2.4%
DJ Utilities 499 - 3.4%
XOI Oils 1,397 - 0.7%
Gold bull. 1,384 + 2.0%
GoldStcks 100.58 + 3.2%
Canada 12667 + 0.4%
London 6654 - 1.0%
Germany 8305 - 1.1%
France 3956 - 1.1%
Hong Kong 22618 - 2.0%
Japan 14612 - 3.5%
Australia 4964 - 3.8%
S. Korea 1973 - 0.7%
India 19704 - 2.9%
Indonesia 5155 + 0.2%
Brazil 56407 + 2.5%
Mexico 40521 - 3.1%
China 2395 + 0.3%

Premium Content Area.

For Street Smart Report subscribers only, used to provide additional info to that provided in the newsletter, mid-week reports, and hotlines.

To obtain access please click on the ‘Subscribe’ link. It will take you to an information page on subscribing to Street Smart Report, a subscription to which includes access to the premium content area of this Street Smart Post blog.

In the Premium Content area this morning. The U.S. stock market, gold, and bonds, signals and analysis of each.


*Premium Content*

Please Login or Subscribe to view this content.

Next week’s Economic Reports:

Next week will be a very light week for important economic reports, but they will include the Producer Price Index, Retail Sales, Consumer Sentiment, and a few others. To see the full list and times click here, and look at the left side of the page it takes you to.

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

To read my weekend newspaper column click hereWhich Way For Gold From Here-

Subscribers to Street Smart Report: In addition to the charts and recommendations in the subscribers’  ‘Premium Content’ area of this blog, there are in-depth updates on the U.S. market, Global Markets, gold, and bonds from this week in the subscriber’s area of the Street Smart Report website.

Non-Subscribers:

We can help you not only make more profits, but just as importantly avoid losses, and at very reasonable cost!

SUBSCRIBE NOW! To get all of this:

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

  • 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)
  • 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.
  • Sy’s weekly column on markets and the economy every Friday.
  • Access to Premium Content area of this Blog, Tuesday, Thursday, and Saturday a.m.

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 and at occasional times in between! Follow it via the RSS feed or follow it in Twitter (the ‘handle’ is @streetsmartpost) so you won’t miss any posts.

**** End of Today’s post*****

Login