Expected market pullback has likely begun.

Tuesday, December 9, 8:00 a.m.

We have been noting for several weeks that the market was short-term overbought and quite likely to experience at least a short-term pullback of 3 to 5%.

Last week our short-term technical indicators triggered a short-term sell signal, and this week it looks like that pullback is underway.

Wall Street and the big program-trading firms have managed to hold the Dow up more than the rest of the market, helping keep the majority of investors (who only look at the Dow as an indication of market strength), happy.

However, the Dow was down 150 points intraday yesterday and closed down 106 points, while the NYSE Composite, which topped out two weeks ago, rallied back to a lower short-term high last week and declined yesterday to a lower low.

120814b

There were more than enough catalysts blamed for the decline yesterday, not the least of which was the further plunge in the price of oil.

120814d

There was also the report that China’s exports in November missed expectations , rising 4.7% versus the consensus forecast of 8%. And that Japan’s economy may be mired in a deeper recession than thought. Its previously reported 3rd quarter contraction of negative 1.6%, was revised down to 1.9%.

But we believe the short-term overbought condition of the market and short-term sell signals was the main catalyst and will result in a pullback regardless of surrounding conditions.

Also involved may be:

Short-term market patterns.

The ‘monthly strength period’, the last two trading days of a month and the first four trading days of the next month, was due to end last Thursday.

The next pattern is for the week after the monthly strength period to be negative. Also, the week before the monthly expirations week, which this week is, also tends to be negative.

The big question is whether it will be just a brief pullback to the 50-day moving averages, or the beginning of something worse.


To read my weekend newspaper column click here:  Are We in Another 1990s Style Super Bull Market-

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, the new issue of the newsletter will be out tomorrow in your secure area of the Street Smart Report website.


Yesterday in the U.S. Market. 

A negative day. They did hold the Dow up better than the rest of the market. Volume picked up to 0.8 billion shares traded on the NYSE.

The Dow closed down 106 points, or 0.6%. The S&P 500 closed down 0.7%. The NYSE Composite closed down 1.0%. The Nasdaq closed down 0.8%. The Nasdaq 100 closed down 0.8%. The Russell 2000 closed down 1.3%. The DJ Transportation Avg. closed down 1.3%. The DJ Utilities Avg closed up 0.9%.

Gold closed up $14 an ounce to $1,204 an ounce.

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

Bonds (TLT) closed up 1.2%.

European Markets closed down yesterday.

The Europe Dow closed down 0.8%. Among individual countries:

London FTSE closed down 1.1%. The German DAX closed down 0.7%. France’s CAC closed down 1.0%. Belgium closed down 0.3%. Denmark closed down 0.5%. Finland closed down 0.3%. Greece closed up 0.2%.  Ireland closed down 1.3%. Italy closed down 0.7%. Netherlands closed down 0.9%. Norway closed down 1.2%. Portugal closed down 1.1%. Spain closed down 0.9%. Switzerland closed down 0.3%.

Asian Markets closed down sharply last night.

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

Australia closed down 1.7%. China plunged 5.4%. Hong Kong closed down 2.3%. India closed down 1.2%. Indonesia closed down 0.4%. Japan closed down 0.7%. Malaysia closed down 0.3%. New Zealand closed up 0.2%. South Korea closed down 0.4%. Singapore closed up 0.7%. Taiwan closed down 0.6%. Thailand closed down 1.0%.


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Markets This Morning:

European markets are plunging this morning.

The Europe Dow is down 1.0%. Among individual countries:

The London FTSE is down 1.5%. The German DAX is down 1.3. France’s CAC is down 1.7%. Belgium is down 1.3%. Denmark is down 0.5%. Finland is down 1.0%. Greece is plunging 10.1%. Ireland is down 1.5%. Italy is down 1.9%. Netherlands is down 1.4%. Norway is down 1.2%. Portugal is down 2.3%. Spain is down 2.0%. Switzerland is down 0.7%.

This Morning in the U.S. Market:

Oil is up $.74 a barrel, at $63.79.

Gold is up $7 an ounce at $1,211 an ounce.


This week’s Economic Reports:

This week will be a very light week for U.S. economic reports, but they will include Mortgage Applications, Retail Sales, the Producer Price Index, and Consumer Sentiment. 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 the Federal Reserve’s Labor-Market Conditions Index, based on 18 job market variables. In spite of the impressive job related reports lately, the index shows the momentum of jobs growth slowing as the Index fell from 3.9 in October to 2.9 in November.

From outside the U.S. was the report that China’s exports in November missed expectations , rising 4.7% versus the consensus forecast of 8%. And from Japan it was that Japan’s economy may be mired in a deeper recession than thought. Japan’s previously reported 3rd quarter GDP contraction of negative 1.6%, was revised down to 1.9%. The consensus expectation was that it would be revised to a smaller contraction. (It was Japan’s 2nd straight quarterly contraction, the common definition of a recession).

This morning’s only report so far is that the Small Business Optimism Index rose from 96.1 in October to 98.1 in November, its highest level in 7 years. Still to come is the JOLTS report (Job Openings and Labor Turnover Survey).


Our Pre-open Indicators:

We are putting this post on early due to travel time to an early meeting. But at the moment the pre-open indicators are pointing to the Dow being down 140 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:  Are We in Another 1990s Style Super Bull Market-

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, the new issue of the newsletter will be out tomorrow in your secure area of the Street Smart Report website.


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

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 **** End of Today’s post*****

Is the Secular Bear Market Behind Us?

Saturday, December 5, 12 noon.

We are still in a bull market, as indicated by our Bull Market/Bear Market Indicator.

120614a

Our intermediate-term indicators remain on a buy signal, and the market is in its favorable season of Oct – May, and the blue chips of the Dow and S&P 500 are making new highs.

Short-term, the market is very overbought above 50-day moving averages and probably due for a short-term pullback to alleviate the overbought condition.

120614d

But how about the very long-term?

Did the ‘secular’ bear market end with the beginning of the current cyclical bull market in 2009? Are we already in the next ‘secular’ bull market where buy and hold is a credible approach?

Secular bear markets last an average of 17 years. In warning of a secular bear market being imminent in 1999, Warren Buffett spoke of “the next 17 years”.

Dr. Med Jones, economist at the International Institute of Management (IIM), was not talking about secular bear markets, but had this to say in his 2006 academic study ‘U.S. Economic Risks 2007-2017’:

“The economy behaves in cycles; for every up cycle there is a down cycle. It is only a question of how long and how steep the curve is. The next decade is probably the most critical for U.S. socioeconomic prosperity.”

The title of his study, ‘U.S. Economic Risks 2007-2017’, was yet another reference to 2017 before risk would be diminished.

The secular bear market of 1965-1981 was typical of the average 17-year secular bear.  Every time a cyclical bull market carried the market up to the previous high or above it, encouraging investors to believe all was well again, another cyclical bear would hit and take the gains back.

It took 17 years of periodic cyclical bear markets to correct all the problems of the late 1960’s and 1970’s and see the economic and debt conditions back to normal to support the next secular bull market of 1982-2000.

120614g

The secular bear market that began in 2000 has had two cyclical bull markets so far, after two cyclical bear markets took care of some of the excesses and problems.

120614h 

In its current bull market it has broken out to higher highs. Does that indicate that this secular bear market ended in 2009, only 9 years after it began in 2000?

To believe that, we would probably have to think that the two recessions and cyclical bear markets so far took care of all the excesses, that there are no serious economic problems left.

Yet we know, to name just a few, that in its rescue efforts the Fed created an unprecedented debt bubble, that interest rates at a record low near zero are not close to normal, that thanks to its massive QE programs, the Fed itself has more than 5 times the normal amount of assets and liabilities on its balance sheet, now at $4.4 trillion, than it had prior to the 2008 crisis.

Then we should look at the market’s long-term overbought/oversold level in comparison to its long-term trend.

In my 1999 book, Riding the Bear – How to Prosper in the Coming Bear Market,  I included a chart showing the market’s long-term regression trendline, and how far the market was above it, as one of the indications of how overbought it was (more so than in 1929), and one of the reasons I expected the bear market that was right around the corner “will be the worst since the 1929 crash”. And so it was.

Below is an update of that long-term trendline, as is periodically compiled now by J Lyons Fund Management. 

It also shows how far above and below its trendline going back to 1870 the market becomes at secular bear market tops and bottoms, and how the extremes in both directions have been followed by equal and opposite reactions to the opposite extreme.

As is typical in ongoing secular bear markets, the two ‘cyclical’ bear markets since 2000 did not complete an opposite extreme before the two ‘cyclical’ bull markets cycled in. Combined with the serious excesses or bubbles that remain in place, this chart also implies that there will be another downturn, that Warren Buffett’s reference to 17 years is likely to be correct.

Embedded image permalink

Here is another interesting tidbit.

The Four-Year Presidential Cycle has a remarkably consistent long-term pattern. Almost all serious corrections and bear markets take place in the first two years of a president’s first term.

However, that pattern is not consistent in a president’s second term. As I have noted before, a president in his second-term cannot be re-elected. So there does not seem to be the same pattern of getting recessions and bear markets over with in the first two years, and then providing whatever it takes in the 3rd and 4th year to make sure the economy and market are strong when re-election time rolls around again. The tendency seems to be to try to keep the economy and market growing all the way through the second term. It could be seen in the second terms of Reagan, Clinton, Bush Jr., and Obama. No recessions or bear markets in the first two years of their second-terms.

But guess what, the next president will be in his or her first term. And that term begins in 2017. There’s that 17-year thing popping up again.

Here’s another little tidbit. The 3rd and 4th years of a re-elected president’s second term do not have the same consistent pattern of being positive as do the last two years of a president’s first term. For instance, the 1987 crash took place in the 3rd year of Reagan’s second term. The 2000-2002 bear market began in the 4th year of Clinton’s 2nd term, and the 2007-2009 bear market began in the 3rd year of Bush Jr’s 2nd term.

So in answer to the many questions I get about whether we are now in the next long-term secular bull market since the market has reached higher highs than in 2000 and 2007, it is my opinion that we are not, that the secular bear remains in place. I believe we are still in a period when buy and hold investing will be a losing proposition, and paying attention to intermediate-term moves and signals will be important.


To read my weekend newspaper column click here:    Are We in Another 1990s Style Super Bull Market-

Subscribers to Street Smart Report:

In addition to the charts and analysis in the subscribers area of this blog, the next issue of the newsletter will be out on in your secure area of the Street Smart Report website.


U.S. market yesterday.

Another positive day on volume of just over 0.7 billion shares traded on the NYSE.

The Dow closed up 58 points, or 0.3%. The S&P 500 closed up 0.2%. The NYSE Composite closed up 0.2%. The Nasdaq closed up 0.2%. The Nasdaq 100 closed unchanged. The Russell 2000 closed up 0.8%. The DJ Transportation Avg. closed up 0.4%. The DJ Utilities Avg closed down 0.9%.

Gold closed down $14 an ounce to $1,190 an ounce.

The U.S. dollar etf UUP closed up 0.8%.

Bonds (TLT) closed down 0.6%.

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

The Asia Dow closed down 0.2%.

Australia closed down 0.6%. China closed up 1.3%. Hong Kong closed up 0.7%. India closed down 0.4%. Indonesia closed up 0.2%. Japan closed up 0.2%. Malaysia closed up 0.3%. New Zealand closed unchanged. Singapore closed up 0.6%. South Korea closed unchanged. Taiwan closed down 0.2%. Thailand closed up 0.2%.

European markets closed up yesterday.

The Europe Dow closed up 0.8%

The London FTSE closed up 1.0%. The German DAX closed up 2.4%. France’s CAC closed up 2.2%. Belgium closed up 2.1%. Denmark closed up 1.4%. Finland closed up 1.4%. Greece closed up 4.2%. Ireland closed up 2.0%. Italy closed up 3.4%. Netherlands closed up 1.7%. Norway closed down 0.3%. Portugal closed up 1.9%. Spain closed up 2.6%. Switzerland closed up 1.0%.


Global markets for the week. 

A mixed week in the U.S. But another big spike up in China. Another hit to resource-rich Canada. Latin America hit again by big declines like those of Brazil and Mexico. 

THIS WEEK (Dec. 5)
DJIA 17958 +0.7%
S&P 500 2075 +0.4%
NYSE 10970 +0.1%
NASDAQ 4780 -0.2%
NASD 100 4311 -0.6%
Russ 2000 1182 + 0.8%
DJTransprts 9152 -0.5%
DJ Utilities 597 -0.5%
XOI Oils 1,363 +2.1%
Gold bull. 1,190 +2.0%
GoldStcks 70.15 +2.6%
Canada 14473 -1.8%
London 6742 +0.3%
Germany 10087 +1.1%
France 4419 +0.7%
Hong Kong 24002 +0.1%
Japan 17920 +2.6%
Australia 5313 +0.3%
S. Korea 1986 +0.3%
India 28458 -0.8%
Indonesia 5187 +0.7%
Brazil 51992 -4.9%
Mexico 43230 -2.2%
China 2937 +9.5%
LAST WEEK (Nov. 28)
DJIA 17828 +0.1%
S&P 500 2067 +0.2%
NYSE 10955 -0.6%
NASDAQ 4791 +1.7%
NASD 100 4337 +2.0%
Russ 2000 1173 + 0.1%
DJTransprts 9198 +1.1%
DJ Utilities 599 +0.6%
XOI Oils 1,335 -10.1%
Gold bull. 1,167 -2.8%
GoldStcks 68.40 -7.3%
Canada 14744 -2.4%
London 6722 -0.4%
Germany 9980 +2.5%
France 4390 +1.0%
Hong Kong 23987 +2.3%
Japan 17459 +0.6%
Australia 5298 +0.1%
S. Korea 1980 +0.8%
India 28693 +1.3%
Indonesia 5149 +0.7%
Brazil 54664 -2.5%
Mexico 44190 -1.0%
China 2682 +7.9%
PREVIOUS WEEK (Nov. 21)
DJIA 17810 +1.0%
S&P 500 2063 +1.2%
NYSE 11025 +1.3%
NASDAQ 4712 +0.5%
NASD 100 4251 +0.6%
Russ 2000 1172 - 0.1%
DJTransprts 9094 +0.4%
DJ Utilities 596 +1.7%
XOI Oils 1,485 +3.3%
Gold bull. 1,200 +0.9%
GoldStcks 73.77 +4.2%
Canada 15111 +1.8%
London 6750 +1.4%
Germany 9732 +5.2%
France 4347 +3.4%
Hong Kong 23437 -2.7%
Japan 17357 -0.8%
Australia 5292 -2.6%
S. Korea 1964 +1.0%
India 28334 +1.0%
Indonesia 5112 +1.2%
Brazil 56084 +8.3%
Mexico 44633 +2.9%
China 2486 +0.3%


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Next week’s Economic Reports:

Next week will be a very light week for U.S. economic reports, but they will include Mortgage Applications, Retail Sales, the Producer Price Index, and Consumer Sentiment. 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:    Are We in Another 1990s Style Super Bull Market-

Subscribers to Street Smart Report:

In addition to the charts and analysis in the subscribers area of this blog, the next issue of the newsletter will be out on in your secure area of the Street Smart Report website.


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


Non-Subscribers:

SUBSCRIBE NOW! To get all of this:

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**** End of Today’s post*****

Would short-term pullback panic investors?

Thursday, December 4, 9:35 a.m.

As I have been showing you for a couple of weeks, the market is very over-extended short-term above 50-day moving averages, significantly more so than the degree that usually results in a pullback at least to the m.a. We have been expecting a 3 to 5% pullback to alleviate that overbought condition before the bull market resumes.

Our concern began when short-term technical indicators were not confirming the Dow’s latest new highs (they were making lower highs). As indicated by the red lines on the Money Flow Index, that is often an earning warning. And now the indicators have rolled over into short-term sell signals.  

120414a

Another 3 to 5% pullback from the overbought condition would not be a bad thing. It would set the market up for further gains in the market’s favorable season.

But could another pullback create some degree of panic and become something worse? We will be watching our intermediate-term indicators carefully if a pullback does begin.

A potential problem is that investors have set themselves up with expectations that nothing can go wrong in the market’s favorable season.

Investor sentiment, after reaching high levels of bearishness and low levels of bullishness near the October low, reversed unusually fast to the current sentiment of high bullishness and low bearishness.

And the statistics seem to show that investors are ‘all in’. Cash in money-markets has fallen to levels not seen since the 2007 market top. Mutual funds have the lowest percentage of assets in cash since 2007. Where are investors getting the money for additional exposure?

Leveraged mutual funds and etf’s?

Borrowed money? Margin debt on the NYSE is at record levels, higher than at the market peaks in 2000 and 2007. In the following chart, courtesy of Doug Short, the red line is margin debt, the blue line is the S&P 500.

Click to View

There are some signs that nervousness is already setting in. It can be seen by the potential topping out of margin debt.

And in the poll of its members by the American Association of Individual Investors (AAII).

In early November the poll showed 53% bullish, 32% neutral, and only 15% bearish. That is 85% were either bullish or neutral, expecting only a sideways move, and only 15% bearish. That is an extreme reading.

As the market has lost its upside momentum of big daily triple-digit gains by the Dow, the enthusiasm had cooled, but very little. Last week it was 79% either bullish, or neutral expecting only a sideways move, and only 21% bearish, still extreme.

This week enthusiasm has cooled further. Bullishness is at 42.7%, neutral at 31.4%, and bearishness is up to 25.9%.

That is happening while the market is making new highs. Is it an indication that some degree of panic selling might set in from fully invested, perhaps leveraged, investors, if the market should begin pulling back?

We will be watching our intermediate-term indicators.


To read my weekend newspaper column click here: U.S. Treasury Bonds Are Outperforming S&P 500

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 Markets (Stocks, Gold, Bonds) from yesterday and a hotline from last night in your secure area of the Street Smart Report website.


Yesterday in the U.S. Market. 

Another gain in another calm and quiet day with no volatility. Volume was average at 0.75 billion shares traded on the NYSE.

The Dow closed up 33 points, or 0.2%. The S&P 500 closed up 0.4%. The NYSE Composite closed up 0.4%. The Nasdaq closed up 0.4%. The Nasdaq 100 closed up 0.2%. The Russell 2000 closed up 0.9%. The DJ Transportation Avg. closed up 0.8%. The DJ Utilities Avg closed down 0.3%.

Gold closed up $10 an ounce to $1,210 an ounce.

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

Bonds (TLT) closed up 0.4%.

The Europe Dow closed down 0.1% yesterday.

But while the major markets closed mixed, the smaller markets closed up.

London FTSE closed down 0.4%. The German DAX closed up 0.4%. France’s CAC closed up less than 0.1%. Belgium closed up 0.4%. Denmark closed up 0.2%. Finland closed up 0.2%. Greece closed up 1.7%.  Ireland closed up 1.1%. Italy closed up 1.0%. Netherlands closed unchanged. Norway closed up 0.7%. Portugal closed up 0.4%. Spain closed up 1.2%. Switzerland closed up 0.3%.

Asian Markets closed up last night, again mostly thanks to China.

The Asia Dow closed up 1.0%. Among individual countries:

Australia closed up 0.8%. China closed up 4.0%. Hong Kong closed up 1.7%. India closed up 0.4%. Indonesia closed up 0.2%. Japan closed up 0.9%. Malaysia closed down 0.6%. New Zealand closed up 0.4%. South Korea closed up 0.9%. Singapore closed up 0.1%. Taiwan closed up 0.5%. Thailand closed up 0.2%.


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Markets This Morning:

European markets reversed direction after the ECB’s decision to leave interest rates alone, and are now mostly down this morning.

The overall Europe Dow is down 0.7%. Among individual countries:

The London FTSE is down 0.4%. The German DAX is down 0.2%. France’s CAC is up 0.2%. Belgium is up 0.2%. Denmark is down 0.2%. Finland is down 0.1%. Greece is up 0.4%. Ireland is up 1.4%. Italy is down 1.3%. Netherlands is up 0.3%. Norway is down 1.0%. Portugal is up 0.5%. Spain is down 1.1%. Switzerland is up 0.1%.

This Morning in the U.S. Market:

Oil is down $.48 a barrel, at $66.90.

Gold is up $2 an ounce at $1,212 an ounce.


This week’s Economic Reports:

This week is a heavy week for important U.S. economic reports, including the ISM Mfg Index, the ISM Services Sector Index, auto sales, construction spending, the U.S. Trade Deficit and the Labor Department’s monthly employment report for November. To see the full list and times click here, and look at the left side of the page it takes you to.

Unlike last week, most have been positive this week.

Monday’s reports were that the Markit U.S. Mfg Index declined from 55.9 in October to 54.8 in November. And the ISM Mfg Index ticked down from 59.0 in October to 58.7 in November.

Tuesday’s reports were that Construction Spending was up 1.1% in October, And U.S. auto sales reached the second highest level in 8 years.

Yesterday’s reports were the ADP Jobs report, which showed 208,000 new jobs were created in the private sector in November, 10% fewer than the consensus forecast of 223,000. Third quarter Productivity was revised up to 2.3% from the previously reported 2.0%. The ISM Non-Mfg (services) Index rose from 57.1 in October to 59.3 in November, beating the forecast of a rise to 57.7. The Mortgage Bankers Association reported that new mortgage applications (seasonally adjusted) fell 7.3% last week. But only because re-financing applications fell 1.4% while applications for home purchases rose 2.5%. And 30-year mortgage rates fell to an average of 4.08%, their lowest level since May, 2013. The Fed’s Beige Book report was optimistic, noting that the economy improved further in October and November, while inflation remained muted.

This morning’s only report is that new weekly unemployment claims declined by 17,000 last week to 297,000, back beneath the key 300,000 level again, about in line with forecasts. The four-week m.a. ticked up by 4.750 to 299,000.

The pre-open indicators have deteriorated some after the European Central Bank again cut its forecasts for euro-zone GDP growth and inflation, and ECB president Draghi’s comments in his press conference.


Our Pre-open Indicators:

The pre-open indicators are now pointing to the Dow being down 20 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: U.S. Treasury Bonds Are Outperforming S&P 500

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 Markets (Stocks, Gold, Bonds) from yesterday and a hotline 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)

  • 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*****

Is Housing Setting Us Up Again?

Tuesday, December 2, 9:25 a.m.

Just when the economy is looking so much better that the Fed has eliminated its QE stimulus, and is contemplating when to begin raising interest rates again, and home prices are getting close to fully recovered, the housing and mortgage industry is returning to its bubble creating ways.

Research firm CoreLogic reports that home prices have reached record (pre-bubble) highs in nine states: Colorado, Louisiana, Nebraska, New York, North Dakota,, South Dakota, Tennessee, Texas, and Wyoming. And more than half of U.S. states are on track to reach their previous housing bubble peaks by mid 2015.

And the Wall Street Journal is reporting “Home appraisers are again inflating the value of of some properties they assess, often at the behest of loan officers and real estate agents, in what industry experts say is a return to practices seen before the financial crisis.”

Then there is that new guidelines go into effect today aimed at making mortgages easier and quicker to obtain.

Yahoo Finance columnist Michael Santoli writes that, “Tight credit has been blamed for slowing the housing recovery.  But banks are expected now to relax some of their credit requirements and give prospective borrowers more consideration, particularly those whose credit score took a hit because of one-off events, like loss of a job or a single large medical bill. . . . . And saving up for a down payment may also no longer be a huge hurdle of homebuyers either. Last month, Mel Watt, head of the Federal Housing Finance Agency, told the Senate Banking Committee that Fannie Mae and Freddie Mac will soon give guidance to banks requiring only a 3% to 5% down payment from borrowers.

Not that it’s yet a problem for the economy. But don’t we or regulators ever learn anything? Will we always be doomed to repeat the past?


To read my weekend newspaper column click here: U.S. Treasury Bonds Are Outperforming S&P 500

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 (Stocks, Gold, Bonds) tomorrow in your secure area of the Street Smart Report website.


Yesterday in the U.S. Market. 

That was not a pretty day. They held the Dow up quite well, while the rest of the market fell apart. Volume picked up to 0.85 billion shares.

The Dow closed down 51 points, or 0.3%. The S&P 500 closed down 0.7%. The NYSE Composite closed down 0.6%. The Nasdaq closed down 1.3%. The Nasdaq 100 closed down 1.2%. The Russell 2000 closed down 1.6%. The DJ Transportation Avg. plunged 2.7%. The DJ Utilities Avg closed up 0.1%.

Gold surged up $44 an ounce to $1,211 an ounce.

The U.S. dollar etf UUP closed down 0.5%.

Bonds (TLT) closed up 0.6%.

European Markets closed down some yesterday.

The Europe Dow closed down 0.4%. Among individual countries:

London FTSE closed down 1.0%. The German DAX closed down 0.2%. France’s CAC closed down 0.3%. Belgium closed down 0.3%. Denmark closed down 0.4%. Finland closed down 0.1%. Greece closed down 0.1%.  Ireland closed down 0.1%. Italy closed down 1.6%. Netherlands closed down 0.6%. Norway closed down 0.3%. Portugal closed down 1.3%. Spain closed down 0.9%. Switzerland closed down 0.1%.

Asian Markets closed up last night, mostly thanks to China.

The Asia Dow closed up 0.4%. Among individual countries:

Australia closed up 1.3%. China closed up 3.1%. Hong Kong closed up 1.2%. India closed down 0.4%. Indonesia closed up 0.2%. Japan closed up 0.4%. Malaysia closed up 0.4%. New Zealand closed unchanged. South Korea closed unchanged. Singapore closed up 0.5%. Taiwan closed down 0.9%. Thailand closed unchanged.


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Markets This Morning:

European markets are up this morning.

The Europe Dow is up 0.3%. Among individual countries:

The London FTSE is up 1.2%. The German DAX is down 0.1%. France’s CAC is up 0.2%. Belgium is up 0.1%. Denmark is up 1.1%. Finland is unchanged. Greece is up 2.5%. Ireland is up 0.6%. Italy is up 0.1%. Netherlands is up 0.9%. Norway is up 1.0%. Portugal is up 1.1%. Spain is up 0.3%. Switzerland is up 0.2%.

This Morning in the U.S. Market:

Oil is down $.90 a barrel, at $68.10.

Gold is down $17 an ounce at $1,194 an ounce.


This week’s Economic Reports:

This week will be a heavy week for important U.S. economic reports, including the ISM Mfg Index, the ISM Services Sector Index, auto sales, construction spending, the U.S. Trade Deficit and the Labor Department’s monthly employment report for November. To see the full list and times click here, and look at the left side of the page it takes you to.

Yesterday’s U.S reports were that the Markit U.S. Mfg Index declined from 55.9 in October to 54.8 in November. And the ISM Mfg Index ticked down from 59.0 in October to 58.7 in November.

This morning’s reports will be auto sales, which will be released through the morning by the individual manufacturers, and Construction Spending, which will be released at 10 a.m. So far Chrysler has reported its November sales were up 20%.


Our Pre-open Indicators:

The pre-open indicators have been improving, and are now pointing to the Dow being up 40 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: U.S. Treasury Bonds Are Outperforming S&P 500

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 (Stocks, Gold, Bonds) 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)

  • Access to Premium Content area of this Blog, Tuesday, Thursday, and Saturday a.m.
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  • 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*****

It was an interesting week for all markets.

Saturday, November 29, 12 noon.

On gold:

We have been bearish on gold (Look Out Below For Gold!) with our next downside target $1,000 an ounce.

Nothing in this week’s gold move disabused us of that expectation of lower prices.

112914a

On oil:

We have been expecting lower oil prices, as expressed in this column (Still Lower Oil Prices Ahead) and re-iterated to subscribers in Wednesday’s Mid-Week Markets Update:

”Some analysts have been calling a bottom for oil prices, expecting the OPEC oil-producing countries will agree at their meeting tomorrow to cut their production to drive prices back up. The anticipation did create some buying among those anxious to catch the bottom. But it looks like the OPEC meeting tomorrow may be a non-event.

Saudi Arabia’s Oil Minister Ali al-Naimi, indicates Saudi Arabia, OPEC’s largest and most influential oil producer, is not interested in OPEC cutting its production. He said he expects the oil market "will stabilize itself eventually". Meanwhile, Russia says it will not cooperate in any production cut.”

With most of their economies also struggling, OPEC countries need the income from current production levels.

We will stick with our projection of Still Lower Oil Prices Ahead as noted in our November 14 article.”

Nothing in this week’s OPEC decision to take no action and the oil price plunge disabused us of that expectation.

112914b

On bonds:

We have been on a buy signal for U.S. Treasury bonds, and they continue to defy the experts.

112914c

But on the stock market:

We are on an intermediate-term buy signal and significantly invested, but have been expecting a short-term pullback for several weeks now, due to the short-term overbought condition.

And it hasn’t happened. The market has made new highs.

But does that even more overbought condition above the 50-day m.a. lessen the risk, or increase it?

112914d

And does this week’s action by the Russell 2000 indicate it is leading the way down as it did from its top in July?

112914e

Which leads to the big question.

If we are right in expecting a short-term pullback from the overbought condition above the 50-day moving averages, what will happen with our much more important intermediate-term sell signal?

Can a more important top take place in the market’s favorable winter season?

Well yeah. Anything is always possible and we have to remember that the the first leg down in the 2007-2009 meltdown began in October, 2007, when the economy was very strong and investor sentiment was very confident and bullish.

And the top not only took place in the market’s normally favorable season, but also in the usually positive 3rd year of the Four-Year Presidential Cycle.

112914f

However, there were also some big differences in the surrounding conditions, not the least of which, in 2007 the housing bubble and sub-prime mortgage market had just burst.

But still, there are similarities too, not the least of which are high market valuations and extreme bullish investor sentiment, both at higher levels than at the 2007 top.

On investor sentiment, another measurement has reached a warning level. As a number of analysts are pointing out this weekend, sentiment as measured by the ratio of money in Rydex bullish funds and ‘inverse’ bearish funds, has reached a higher bullish ratio than in 2007. In fact, the ratio is at its most bullish extreme since 2001.

These situations are why I have been saying the next few weeks, and next few months, are going to be important to all markets (and investor wealth), but particularly the stock market if our intermediate-term buy signal does not hold.


To read my weekend newspaper column click here:  U.S. Treasury Bonds Are Outperforming S&P 500

Subscribers to Street Smart Report:

In addition to the charts and analysis in the subscribers area of this blog, there is a hotline and an in-depth Markets Update (Stock market, bonds, gold) from Wednesday in your secure area of the Street Smart Report website.


U.S. market yesterday.

A mixed day on decent volume even though the U.S. market closed at 1 o’clock, with more than 0.6 billion shares traded on the NYSE.

The Dow closed unchanged. The S&P 500 closed down 0.3%. The NYSE Composite closed down 0.8%. The Nasdaq closed up 0.1%. The Nasdaq 100 closed up 0.5%. The Russell 2000 closed down 1.5%. The DJ Transportation Avg. closed unchanged. The DJ Utilities Avg closed up 1.0%.

Gold plunged $22 an ounce to $1,167 an ounce.

The U.S. dollar etf UUP closed up 0.8%.

Bonds (TLT) closed up 0.8%.

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

The Asia Dow closed down 0.2%.

Australia closed down 1.6%. China closed up 2.0%. Hong Kong closed down 0.1%. India closed up 0.9%. Indonesia closed down 0.1%. Japan closed up 1.2%. Malaysia closed down 0.5%. New Zealand closed down 0.6%. Singapore closed up 0.3%. South Korea closed up 0.2%. Taiwan closed up 0.2%. Thailand closed down 0.4%.

European markets closed basically flat yesterday.

The Europe Dow closed unchanged.

The London FTSE closed unchanged. The German DAX closed up 0.1%. France’s CAC closed up 0.2%. Belgium closed up 0.1%. Denmark closed down 0.2%. Finland closed down 0.9%. Greece closed up 1.3%. Ireland closed down 0.1%. Italy closed down 0.4%. Netherlands closed up 0.1%. Norway closed down 3.2%. Portugal closed down 2.1%. Spain closed up 0.4%. Switzerland closed up 0.2%.


Global markets for the week. 

A mixed week in the U.S. and globally. Huge plunges in oil and gold hit resource-rich Canada hard. 

THIS WEEK (Nov. 28)
DJIA 17828 +0.1%
S&P 500 2067 +0.2%
NYSE 10955 -0.6%
NASDAQ 4791 +1.7%
NASD 100 4337 +2.0%
Russ 2000 1173 + 0.1%
DJTransprts 9198 +1.1%
DJ Utilities 599 +0.6%
XOI Oils 1,335 -10.1%
Gold bull. 1,167 -2.8%
GoldStcks 68.40 -7.3%
Canada 14744 -2.4%
London 6722 -0.4%
Germany 9980 +2.5%
France 4390 +1.0%
Hong Kong 23987 +2.3%
Japan 17459 +0.6%
Australia 5298 +0.1%
S. Korea 1980 +0.8%
India 28693 +1.3%
Indonesia 5149 +0.7%
Brazil 54664 -2.5%
Mexico 44190 -1.0%
China 2603 +0.3%
LAST WEEK (Nov. 21)
DJIA 17810 +1.0%
S&P 500 2063 +1.2%
NYSE 11025 +1.3%
NASDAQ 4712 +0.5%
NASD 100 4251 +0.6%
Russ 2000 1172 - 0.1%
DJTransprts 9094 +0.4%
DJ Utilities 596 +1.7%
XOI Oils 1,485 +3.3%
Gold bull. 1,200 +0.9%
GoldStcks 73.77 +4.2%
Canada 15111 +1.8%
London 6750 +1.4%
Germany 9732 +5.2%
France 4347 +3.4%
Hong Kong 23437 -2.7%
Japan 17357 -0.8%
Australia 5292 -2.6%
S. Korea 1964 +1.0%
India 28334 +1.0%
Indonesia 5112 +1.2%
Brazil 56084 +8.3%
Mexico 44633 +2.9%
China 2603 +0.3%
PREVIOUS WEEK (Nov. 14)
DJIA 17634 +0.4%
S&P 500 2039 +0.4%
NYSE 10880 +0.2%
NASDAQ 4688 +1.2%
NASD 100 4224 +1.5%
Russ 2000 1173 unchg
DJTransprts 9061 +1.3%
DJ Utilities 586 -2.8%
XOI Oils 1,438 -2.4%
Gold bull. 1,189 +1.1%
GoldStcks 70.82 +2.6%
Canada 14843 +1.0%
London 6654 +1.3%
Germany 9252 -0.4%
France 4202 +0.3%
Hong Kong 24087 +2.3%
Japan 17490 +3.6%
Australia 5433 - 1.6%
S. Korea 1945 +0.3%
India 28046 +0.6%
Indonesia 5049 +1.2%
Brazil 51772 -2.7%
Mexico 43371 -2.8%
China 2595 +2.5%


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.

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 heavy week for important U.S. economic reports, including the ISM Mfg Index, the ISM Services Sector Index, auto sales, construction spending, the U.S. Trade Deficit and the Labor Department’s monthly employment report for November. 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:  U.S. Treasury Bonds Are Outperforming S&P 500

Subscribers to Street Smart Report:

In addition to the charts and analysis in the subscribers area of this blog, there is a hotline and an in-depth Markets Update (Stock market, bonds, gold) from Wednesday in your secure area of the Street Smart Report website.


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


Non-Subscribers:

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 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*****

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