Investors and advisors are so very confident and bullish.

Tuesday, September 9, 9:25 a.m.

As I noted in Saturday’s blog, Barron’s reported that not even one of the market strategists it surveys each September expects the market to go down. 100% are bullish.

The Investors Intelligence Sentiment survey of investment letters, shows the smallest number of bears in 27 years. That’s lower than in 1999, 2007, lower than just before the S&P 500’s 19% plunge in 2011. Why, at just 13.3%, it’s the lowest since 1987, before the 1987 crash.

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There’s nothing to be concerned about though.

You can know that from the emotional reactions in ‘Comment’ sections of websites, to anyone silly enough to suggest the high level of investor bullishness is a warning sign. “Idiots that are worried about anything as arcane as investor sentiment must be blind as well as dumb. Investors, newsletter writers, and advisors have been at extreme low levels of bearishness and concern since early last year, and the market just keeps going higher.”

They are so right.

That shows up not just in the Investors Intelligence chart, but in this chart of the VIX Index (aka the Fear Index). It measures the sentiment of options players.

It has been at its lowest level of fear (highest level of bullishness and confidence) since the 2007 market top for the last 19 months. And the market just keeps going higher. 

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The sales pitch for Alibaba shares has begun. 

After amending its initial prospectus, China’s giant Alibaba Group is proceeding toward the launch of what will be the biggest stock market IPO in U.S. history in a couple of weeks.

At present the company expects to price the IPO at $60 to $66 a share. That would set the company’s initial value at $163 billion.

However, as with any IPO, the starting price is not based on value, but on how much its investment banks believe they can get investors to pay. That will be decided by how much excitement the company can create in its next step, a global roadshow to promote the stock to investors.

Analysts expect that if it can drum up enough investor enthusiasm with its multi-city marketing effort, it will price the shares above the initial range, and try for a valuation of more than $200 billion. That would rank it immediately in the 20 largest capitalization companies traded in the U.S.

The road show seems to be off to a great start. Reuters reported yesterday that hundreds of hedge funds, mutual funds, and other institutional investors lined up for the initial presentation at the Waldorf Astoria hotel in NY, and the line “snaked all the way down to the basement.”

The other excitement of the day is the launch of yet another iPhone update, the iPhone 6.

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To read my weekend newspaper column click here:  Why a Market Correction Now Would be the Best Scenario

Subscribers to Street Smart Report:

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

Yesterday in the U.S. Market. 

A mixed and mostly flat day on light volume of less than 0.6  billion shares traded on the NYSE.

The Dow closed down 25 points, or 0.2%. The S&P 500 closed down 0.3%, but at 2001, remained above 2,000. The NYSE Composite closed down 0.1%. The Nasdaq closed up 0.2%. The Nasdaq 100 closed up 0.1%. The Russell 2000 closed up 0.2%. The DJ Transportation Avg. closed down 0.3%. The DJ Utilities Avg closed down 0.8%.

Gold closed down $11 an ounce at $1,255 an ounce.

The U.S. dollar etf UUP closed up 0.6%.

European Markets closed down yesterday.

The Europe Dow closed down 0.3%.

The London FTSE closed down 0.3%. The German DAX closed up 0.1%. France’s CAC closed down 0.3%. Belgium closed down 0.4%. Denmark closed up 0.7%. Finland closed up 0.2%. Greece closed down 0.1%.  Ireland closed down 1.1%. Italy closed down 0.5%. Netherlands closed down 0.1%. Norway closed down 0.2%. Portugal closed down 0.4%. Spain closed down 0.4%. Switzerland closed up 0.3%.

Asian Markets closed mixed last night.

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

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Markets This Morning:

European markets are down again this morning.

The Europe Dow is down 0.6%. Among individual countries:

The London FTSE is down 0.1%. The German DAX is down 0.4%. France’s CAC is down 0.3%. Belgium is down 0.4%. Denmark is up 0.7%. Finland is down 0.6%. Greece is down 1.5%. Ireland is down 0.2%. Italy is down 0.2%. Netherlands is down 0.3%. Norway is down 0.5%. Portugal is down 0.9%. Spain is down 0.8%. Switzerland is up 0.2%.

This Morning in the U.S. Market:

Oil is up $.58 a barrel, at $93.24

Gold is unchanged at $1,254 an ounce.

This week’s Economic Reports:

This week is a very quiet week for U.S. economic reports, mostly just weekly unemployment claims, Retail Sales, 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.

There were no reports on Monday.

This morning’s only report is that the NFIB Small Business Optimism Index climbed again in August, ticking up to 96.1, its second-highest level in 9 years, that is since the stock market top in October, 2007.

The pre-open indicators, previously fractionally positive, have turned negative.

Our Pre-open Indicators:

Our pre-open indicators are pointing to the Dow being down 30 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:  Why a Market Correction Now Would be the Best Scenario

Subscribers to Street Smart Report:

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

Non-Subscribers:

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

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**** End of Today’s post*****

U.S. Market is still at important juncture.

Saturday, September 6, 12 noon.

The U.S. market pretty much marked time this week, going nowhere, fractionally negative for the week until yesterday’s bounce turned it fractionally positive going into the weekend.

A number of major indexes remained paused at potential overhead resistance.

Among them:

090614e

090614f

090614g

Other Voices.

Financial Times: ‘US Jobs Growth Disappoints’. “The pace of US jobs growth slowed to a disappointing 142,000 in August. The report broke the six-month run of jobs growth above 200,000 and came in well below expectations of 230,000.

The weaker number may be just statistical noise [subject to revision]. But it is a reminder that the US labour market has never accelerated beyond mediocre during this recovery.”

Yahoo Finance: “The Alibaba Group disclosed on Friday that it hopes to raise as much as $21.1 billion in its long-awaited initial public offering, setting up expectations for the biggest stock market debut in United States history. In an amended prospectus, the Chinese Internet giant said it plans to price its shares between $60 and $66 in American depository shares. At the midpoint of that range, the company would be valued at nearly $156 billion. The disclosure of the price range and other important elements is the last step that Alibaba will take before it sets off on a whirlwind global roadshow to promote the stock to investors.”

James Cramer, CNBC: “Nobody is talking about it but the new supply [of stocks] has got me nervous. There’s a glut of new offerings [IPO’s] coming into the market, like Alibaba, the biggest. There isn’t enough new money coming into the market to absorb it all. That’s one of the oddities of this bull market. It doesn’t draw in new dollars. It just kind of putters along without any real fuel other than corporate buybacks and mergers and acquisitions.”

Cramer expects mutual fund managers who need exposure to those IPO’s, particularly Alibaba, will have to sell other stocks to raise cash for the purchases.

He said, “So I expect they will sell Apple, and Google, and Facebook and other previous winners to fund their Alibaba purchases.”

Barron’s: “It’s full steam ahead for U.S. stocks, say 10 Wall Street strategists surveyed by Barron’s.” 

To read my weekend newspaper column click here: Why a Market Correction Now Would be the Best Scenario

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, there is an in-depth ‘Gold, Bonds, Dollar, Inflation’ Report from Thursday in your secure area of the Street Smart Report website.

Non-Subscribers:

Check out our new bull market/bear market indicator (BBMI) by clicking here: Market Timing Strategy !

U.S. market yesterday.

A positive day to prevent a negative week. The Dow was down as much as 40 points, and up as much as 67 points, and closed on its high. Volume was less than 0.6  billion shares traded on the NYSE.

The Dow closed up 67 points, or 0.4%. The S&P 500 closed up 0.5%, and at 2007, a new high above 2000. The NYSE Composite closed up 0.4%. The Nasdaq closed up 0.5%. The Nasdaq 100 closed up 0.6%. The Russell 2000 closed up 0.3%. The DJ Transportation Avg. closed up 0.6%. The DJ Utilities Avg closed up 1.2%.

Gold closed up $3 an ounce at $1,268 an ounce.

The U.S. dollar etf UUP closed unchanged.

The 20-yr bond etf TLT closed down 0.2%.

The China etf closed up 1.0%.

Asian markets mixed in their last session of the week.

The Asia Dow closed down 0.2%.

Among individual markets:

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

European markets gave up early gains to close down yesterday.

The Europe Dow closed down 0.4%.

The London FTSE closed down 0.3%. The German DAX closed up 0.2%. France’s CAC closed down 0.2%. Belgium closed down 0.1%. Denmark closed down 0.6%. Finland closed down 0.3%. Greece closed up 1.3%. Ireland closed up 0.1%. Italy closed down 0.1%. Netherlands closed down 0.1%. Norway closed down 0.7%. Portugal closed unchanged. Spain closed up 0.4%. Switzerland closed down 0.5%.

Global markets for the week. 

Last day rally saved U.S. market from negative week but just barely. Biggest loser was gold stocks. Biggest winner was China. Europe continued to bounce back.

THIS WEEK (Sept. 5)
DJIA 17,137 +0.2%
S&P 500 2007 + 0.2%
NYSE 11073 +0.2%
NASDAQ 4582 +0.1%
NASD 100 4089 +0.2%
Russ 2000 1170 -0.3%
DJTransprts 8601 +2.3%
DJ Utilities 568 +0.7%
XOI Oils 1,669 -1.2%
Gold bull. 1,268 -1.5%
GoldStcks 95.30 -6.8%
Canada 15569 -0.4%
London 6855 +0.5%
Germany 9747 +2.9%
France 4486 +2.4%
Hong Kong 25240 +2.0%
Japan 15668 +1.6%
Australia 5598 -0.5%
S. Korea 2049 -0.9%
India 27026 +1.5%
Indonesia 5217 +1.6%
Brazil 60760 -0.8%
Mexico 46231 +1.3%
China 2435 +5.0%
LAST WEEK (August  29)
DJIA 17,098 +0.6%
S&P 500 2003 + 0.8%
NYSE 11046 +0.9%
NASDAQ 4580 +0.9%
NASD 100 4082 +0.7%
Russ 2000 1174 +1.2%
DJTransprts 8408 -0.3%
DJ Utilities 564 +1.6%
XOI Oils 1,689 +2.0%
Gold bull. 1,287 +0.6%
GoldStcks 102.27 +2.8%
Canada 15625 +0.6%
London 6819 +0.7%
Germany 9470 +1.4%
France 4381 +3.0%
Hong Kong 24742 -1.5%
Japan 15424 -0.7%
Australia 5624 -0.3%
S. Korea 2068 +0.6%
India 26638 +0.8%
Indonesia 5136 -1.2%
Brazil 61244 +4.9%
Mexico 45628 +0.6%
China 2320 -1.1%
PREVIOUS WEEK (August 22)
DJIA 17,001 +2.0%
S&P 500 1988 + 1.7%
NYSE 10947 +1.4%
NASDAQ 4538 +1.7%
NASD 100 4052 +1.6%
Russ 2000 1160 +1.7%
DJTransprts 8429 +2.0%
DJ Utilities 555 +1.2%
XOI Oils 1,656 +0.9%
Gold bull. 1,280 -1.8%
GoldStcks 99.45 -2.5%
Canada 15535 +1.6%
London 6775 +1.3%
Germany 9339 +2.7%
France 4252 +1.9%
Hong Kong 25112 +0.6%
Japan 15539 +1.4%
Australia 5640 +1.5%
S. Korea 2056 -0.3%
India 26419 +1.2%
Indonesia 5198 +1.0%
Brazil 58407 +2.9%
Mexico 45374 +1.7%
China 2345 +0.6%

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Next week’s Economic Reports:

Next week will be a very quiet week for U.S. economic reports, mostly just weekly unemployment claims, Retail Sales, 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:  Why a Market Correction Now Would be the Best Scenario

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, there is an in-depth ‘Gold, Bonds, Dollar, Inflation’ Report from Thursday in your secure area of the Street Smart Report website.

I’ll be back with the next blog post Tuesday morning 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.
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  • A 4 to 6 page Gold, Bonds, U.S. Dollar Report every three weeks.
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**** End of Today’s post*****

China’s market rally continues to impress.

Thursday, September 5, 9:25 a.m.

China’s breakout from a symmetrical triangle formation has been yet another example of how the direction of the breakout from such a pattern usually determines the next direction.

China’s Shanghai Index broke out of the pattern to the upside in late July, and has gained 10.2% in the two months since, breaking through the first two areas of potential resistance so far.

090414a

At our July 23 buy signal we noted the interesting comparison between China’s economy and market and those of the U.S.

The U.S. market has been in a long bull market in which the S&P 500 has gained 165% since 2009. China’s stock market had been in a long bear market in which it had declined 65% since its peak in 2007, and 39% from its peak in 2009.

Sentiment for the U.S. economy and market is at high levels of bullishness and complacency, while sentiment for China’s economy and market has been very bearish and pessimistic, looking for a hard landing for its economy.

As a result, the Shanghai Composite was selling at just 7.9 times 12-month projected earnings, down from its 5-year average P/E ratio of 11.3. Meanwhile, in the U.S. the S&P 500 has been in a powerful bull market since 2009, which has it selling at 18 times projected earnings.

China’s economy is projected to slow to ‘only’ 7.4% in 2014, and has a stock market plunged to a five-year low and selling at only 7.9 times earnings, while the U.S. economy, projected to run at 2.0% growth, has its stock market at a five-year high, and selling at 18 times projected earnings. Interesting.

Speaking of symmetrical triangles, there is gold.

Which way will gold break out of its similar pattern?

It has been confined in a symmetrical triangle since mid-2013. It broke out fractionally to the downside in a big decline on Tuesday, but rallied back some yesterday to fractionally back inside the triangle.

090414b

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More good economic news this morning. 

This morning’s reports are the ADP Jobs Report showing 204,000 new jobs were created in the private sector in August, missing the consensus forecast of 215,000, but another month of 200,000 + gains. The U.S. Trade Deficit narrowed to $40.5 billion in July, better than the forecast of $42 billion, and the June deficit was revised lower.

Then there was the news from Europe that the ECB will cut interest rates further in October, and embark on a U.S. style QE-type stimulus program of bond and asset-backed securities purchases, in an effort to get the euro-zone’s stumbling economy back on track.

To read my weekend newspaper column click here:  The Eurozone is a Growing Problem for the U.S. Economy

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 Update (Stock market, gold, bonds) from yesterday in your secure area of the Street Smart Report website.

Yesterday in the U.S. Market. 

A mostly negative day, although they managed in the final minutes to close the Dow fractionally positive. Volume picked up some from last week, to more than 0.6 billion shares traded on the NYSE.

The Dow closed up 10 points, or 0.1%. The S&P 500 closed down 0.1%, (closing at 2000.7). The NYSE Composite closed up 0.2%. The Nasdaq closed down 0.6%. The Nasdaq 100 closed down 0.6%. The Russell 2000 closed down 0.6%. The DJ Transportation Avg. closed down 0.2%. The DJ Utilities Avg closed up 0.5%.

Gold closed up $5 an ounce at $1,270 an ounce.

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

The 20-yr bond etf TLT closed up 0.6%.

The China etf closed up 2.6%.

European Markets closed up quite sharply yesterday.

The Europe Dow closed up 1.0%.

The London FTSE closed up 0.7%. The German DAX closed up 1.3%. France’s CAC closed up 1.0%. Belgium closed up 0.3%. Denmark closed up 0.7%. Finland closed up 0.8%. Greece closed up 1.1%.  Ireland closed up 1.1%. Italy closed up 1.9%. Netherlands closed up 0.5%. Norway closed up 0.3%. Portugal closed up 1.0%. Spain closed up 1.2%. Switzerland closed up 0.5%.

Asian Markets mostly closed down last night.

The Asia Dow closed down 0.2%. Among individual countries:

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

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Markets This Morning:

European markets are up this morning.

The Europe Dow is unchanged. But among individual countries:

The London FTSE is up 0.2%. The German DAX is up 0.3%. France’s CAC is up 1.1%. Belgium is up 0.9%. Denmark is up 0.2%. Finland is up 0.4%. Greece is up 1.3%. Ireland is up 0.5%. Italy is up 1.3%. Netherlands is up 0.7%. Norway is up 0.2%. Portugal is up 0.9%. Spain is up 1.2%. Switzerland is up 0.3%.

This Morning in the U.S. Market:

Oil is down $.81 a barrel, at $94.73

Gold is up $6 an ounce at $1,276.

This week’s Economic Reports:

This week is a busy holiday-shortened week for potential market-moving reports, including the ISM Mfg Index, auto sales, Factory Orders, the ADP Jobs report, and on Friday, the ‘Big-One’, the Labor Department’s monthly jobs report. To see the full list and times click here, and look at the left side of the page it takes you to.

Tuesday’s reports were the PMI Mfg Index jumped to 57.9 in August from 55.8 in July. The ISM Mfg Index jumped to 59.0 in August from 57.1 in July. And Construction Spending was up 1.8% in July, better than the consensus forecast of 1.0%.

Yesterday’s reports were that Factory Orders jumped 10.5% in July. But like last week’s Durable Goods Orders jump, it was all due to the huge jump in long-term aircraft orders, mostly by Boeing. Excluding aircraft orders, factory orders for the general economy fell by 0.8%. Auto sales rose 6.4% in August, better than the consensus forecast for a 0.7% increase. And the Fed’s Beige Book, which was upbeat on the economy’s progress, terming it modest or moderate, with the housing sector still lagging.

This morning’s reports are the ADP Jobs Report, which reported 204,000 new jobs were created in the private sector in August, missing the consensus forecast of 215,000, but another month of 200,000 + gains. And the U.S. Trade Deficit narrowed to $40.5 billion in July, better than the forecast of $42 billion, and the June deficit was revised lower. New weekly unemployment claims were up slightly last week, rising 4,000 at 302,000. The four-week m.a. ticked up 3,000 to 302,750. And 2nd quarter Productivity was revised down from 2.5% to 2.3%.

Then there was the news from Europe that the European Central Bank will cut interest rates further, and embark on a U.S. style QE type stimulus program of bond and asset-backed securities purchases in an effort to get the euro-zone’s stumbling economy back on track.

Still to come is the PMI Services Index, which will be released at 9:45 a.m., and the ISM non-mfg Index, which will be released at 10 am..

Surprisingly, European markets, already positive, had no reaction to the ECB decisions, and the pre-open indicators for the U.S. market actually fell some after the U.S economic reports.

Our Pre-open Indicators:

Our pre-open indicators are pointing to the Dow being up 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:  The Eurozone is a Growing Problem for the U.S. Economy

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 Update (Stock market, gold, bonds) from yesterday 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*****

Gold and Bonds still diverging.

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

Bonds continue to defy the experts and pundits, continuing to make new rally highs even as talk increases that the Fed will have to begin raising interest rates sooner than previously expected.

Are bonds maybe saying the economy is not as strong as the Fed thinks, or that something is going to happen that will require a safe haven?

090214b

Gold has been going the other way so far this year, although with considerable volatility.

It has been confined in a narrowing symmetrical triangle formation. The direction of the breakout from such a pattern usually determines the next sustained direction.

With another rally attempt having failed at its short-term 30-day m.a., it has been headed down toward the lower limit of the triangle formation again.

After rallying some last week, it is plunging around $19 an ounce at the moment this morning, which has it at the lower limit of the formation again. I have included that decline in the following chart, although we can’t know if it will hold to the close.

090214a

Is it ready to make another rally attempt, or finally break out of the formation to the downside?

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Economic news from Europe remains dismal. 

The Markit PMI Indexes were released yesterday for European economies.

Overall euro-zone: Down from 51.8 in July to 50.7 in August. Output at 14-month low.

Among individual European countries (the U.K. is in EU but not euro-zone):

Germany: Down from 52.4 in July to 51.4 in August, an 11-month low.

United Kingdom: Down from 54.8 in July to 52.5 in August.

France: Down from 47.8 in July to 46.9 in August, biggest monthly decline in more than a year.

Spain: Down from 53.9 in July to 52.8 in August.

Italy: Down from 51.9 in July to 49.8 in August.

To read my weekend newspaper column click here:  The Eurozone is a Growing Problem for the U.S. Economy

Subscribers to Street Smart Report:

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

Yesterday in the U.S. Market. 

The U.S. market was closed yesterday for the Labor Day holiday.

European Markets were mixed and basically flat yesterday.

The Europe Dow closed down 0.2%.

The London FTSE closed up 0.1%. The German DAX closed up 0.1%. France’s CAC closed down 0.1%. Belgium closed down 0.4%. Denmark closed up 0.1%. Finland closed down 0.3%. Greece closed down 0.2%.  Ireland closed up 0.8%. Italy closed down 0.5%. Netherlands closed up 0.3%. Norway closed up 0.7%. Portugal closed down 0.6%. Spain closed up 0.2%. Switzerland closed up 1.0%.

Asian Markets were up last night.

Australia closed up 0.5%. China closed up 1.4%. Hong Kong closed unchanged. India closed up 0.6%. Indonesia closed up 0.5%. Japan closed up 1.2%. Malaysia closed up 0.1%. New Zealand closed up 0.1%. South Korea closed down 0.8%. Singapore closed up 0.4%. Taiwan closed down 1.2%. Thailand closed up 0.2%.

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Markets This Morning:

European markets are fractionally higher this morning.

The Europe Dow is up 0.1%. Among individual countries:

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

This Morning in the U.S. Market:

Oil is down $1.20 a barrel, at $94.74

Gold is down $19 an ounce at $1,268.

This week’s Economic Reports:

This week will be a busy holiday-shortened week for potential market-moving reports, including the ISM Mfg Index, auto sales, Factory Orders, the ADP Jobs report, and on Friday, the ‘Big-One’, the Labor Department’s monthly jobs report. 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 in the U.S. on the holiday yesterday. But reports from Asia and Europe included that the eurozone PMI Mfg Index plunged from 53.8 in July to 50.7 in August, its lowest level in13 months. China’s PMI ticked down from 50.3 in July to 50.2 in August.

This morning’s reports will be the PMI Mfg Index which will be released at 9:45 a.m., the ISM Mfg Index, and Construction Spending, both of which will be released at 10 a.m.

The pre-open indicators have been fractionally positive all night, and remain so.

Our Pre-open Indicators:

Our pre-open indicators are pointing to the Dow being up 20 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:  The Eurozone is a Growing Problem for the U.S. Economy

Subscribers to Street Smart Report:

In addition to the charts and signals in the ‘premium content’ area of this blog, there will be an in-depth Markets Update (Stock market, 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.
  • 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*****

Should we be concerned about September?

Saturday, August 30, 12 noon.

Not that we are predicting a bear market.

But is it true, as some are claiming, that it would be rare for a bear market to begin this late in the year after reaching a new high in August.

In fact, of the 25 bear markets since 1900, five of them began in September. And another 10 of them began in October, November, December, or January. That is, a total of 15 out of 25 began after August. In 1987, the market topped out in August, but even that was with less than a week left in the month, most of the decline taking place in September and October.

MARKET

TOP

MARKET

LOW

DECLINE

 

MARKET

TOP

MARKET

LOW

DECLINE

6-17-1901

11-9-1903

- 41%

 

9-12-1939

4-28-1942

- 40.4%

1-19-1906

11-15-1907

- 48.5%

 

5-29-1946

5-17-1947

- 23.2%

11-19-1909

9-25-1911

- 27.4%

 

4-6-1956

10-22-1957

- 20.0%

9-30-1912

7-30-1914

- 24.1%

 

12-13-1961

6-26-1962

- 27.1%

11-21-1916

12-19-1917

- 40.1%

 

2-9-1966

10-7-1966

- 25.2%

11-3-1919

8-24-1921

- 46.6%

 

12-3-1968

5-26-1970

- 35.9%

9-3-29

11-13-1929

- 47.9%

 

1-11-1973

12-6-1974

- 45.1%

4-17-30

7-8-1932

- 86.0%

 

9-21-1976

2-28-1978

- 26.9%

9-7-32

2-27-1933

- 37.2%

 

4-27-1981

8-12-1982

- 24.1%

2-5-1934

7-26-1934

- 22.8%

 

8-25-1987

10-19-1987

- 36.1%

3-10-1937

3-31-1938

- 49.1%

 

7-16-1990

10-11-1990

-21.2%

11-12-1938

4-8-1939

- 23.3%

 

1-14-2000

10-10-2002

- 38.7%

 

 

 

 

10-11-2007

3-6-2009

-54.4%

Average decline – 36.5%.  Ten largest declines averaged -49.9%.

A number of bullish analysts are also pointing out that over the last 100 years, September has been the worst month of the year, but it’s not worth thinking about, because the average decline was only 0.75%.

It would seem that more than just averaging all Septembers should be involved. What were the results for Septembers when conditions included the market being overvalued by as much as 35% to 65% based on P/E ratios, Price/Book ratios, market capitalization ratios, the Q-ratio, investor sentiment being at high levels, in the second year of the Presidential Cycle, and so on?

It’s like the old jokes:

A guy drowns wading across a pond with an average depth of three feet. He didn’t consider the numerous 20 foot holes.

An economist puts his head in the oven and his feet in the refrigerator. Asked how it felt just before he passed out, he said, “On average, not bad.”

It’s like saying the stock market has made an average annual gain of 2.4% since 2000. Whoops, but there were some 50% holes along the way that many of those wading through it drowned in, and most of the rest were left gasping for air. As another old saying goes, “You don’t drown from being in the water. You drown by not getting out before you go under.”

083014b

I noticed an article this week opining that the current economic recovery has two more years to run because the three expansions prior to the 2008 meltdown lasted an average of 95 months (7.9 years). It was backed up by another average,  that on average those three expansions didn’t end until three years after the unemployment rate had fallen to between 5% and 5.5%.

However, if you read it through to the end, the article did finally drew the conclusion that “The previous cycles may be a poor guide to how long the current one lasts.”, citing the different conditions this time, that the output gap may be smaller, the employment picture is quite different, and interest rates have been stuck at a record low zero percent for five years. And it ends by quoting Olivier Blanchard of the IMF saying, “The economy fluctuates between normal periods, and abnormal periods when it meets the constraints of zero interest rates and weakens suddenly. Before the crisis we assumed we would stay away from those constraints. Now we know that once in awhile we shall get into that region and we have to be ready for it.”

Are markets still at an important juncture or all clear?

Did the S&P 500 closing at 2,003, breaking out above 2,000, signify an all clear for another leg up. Or are too many other indexes still at questionable junctures, at potential short-term overhead resistance to render a judgment?

That question is not only regarding the U.S. market but markets in Europe.

083014c

083014d

083014e

083014f

083014g

Other Voices – Lots of Choices.

Bloomberg View, Mark Gilbert: ‘Germany to Europe: Help Isn’t on the Way’. “German Finance Minister Wolfgang Schaeuble has bad news for anyone hoping the European Central Bank will ride to the rescue of the ailing euro region:

“Monetary policy has come to the end of its instruments. I don’t think ECB monetary policy has the instruments to fight deflation, to be quite frank. What we urgently need is investments, regaining confidence by investors, by markets, by consumers.”

His comments, in an interview with Bloomberg Television, coincide with figures showing annual inflation slowed to 0.3 percent in the euro zone this month. That was the weakest rate of growth since October 2009, and marks 11 consecutive months of prices growing by less than 1 percent. The deflationary danger that policy makers have been denying for months may be upon them.”

Ralph Acampora, Altaira Investment Solutions: Asked on CNBC for his take on forecasts of a mega-downturn made by analysts such as Abigail Doolittle; "I hear that and I see what they’re talking about, but . . . . honestly, if you look at the technicals as I do, there’s just no way I can make those downside targets."

[By the way, this is what Ralph, then at Prudential Securities, said at the severe market top in December, 1999, “I’m not saying the market is in a straight line up . . . I’m saying any kinds of decline, buy them.”]

James Cramer, the street.com: ‘Expect Selling and Don’t Buy It’.It has been so long without even a slight correction, and the upward move has drawn so much money into the market, that there will be no cushion to fall back on. Look for the big dollar amount stocks to be knocked over hard as that, oddly, is where all the momentum money is.”

Barron’s, Michael Kahn: ‘Stock Market Should Keep Rising—at Least for Now’. Only on Wall Street does a record-setting performance stir worry. Despite a blistering rally from early August that pushed the Standard & Poor’s 500 to the 2000 level for the first time, some measures of sentiment remain on fear alert. The CNN Money Fear & Greed index remains at a fearful 34 out of 100 (the higher the number the greater the greed).

But for anyone who tunes everything out but the trend, there is no immediate reason on the charts why the rally should end, at least not in the short term. Several weeks down the road, however, may be a different story as certain factors, including the Federal Reserve, build a bearish picture.”

Shawn Langlois, MarketWatch: “Labor Day weekend should be enjoyed, with a low level of market-top stress to detract from the beers and barbecue. That’s probably the way it felt for investors on Labor Day in 1929, too. . . . . After all, stocks were taking out new highs then, as well. And the Dow would knock out another record high the day after Labor Day. . . . However, that September 3rd peak would be the last for awhile. The 1929 October crash gets the press, but it began to unravel much earlier.

083014a

To read my weekend newspaper column click here:   The Eurozone is a Growing Problem for the U.S. Economy

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 from Wednesday is in your secure area of the Street Smart Report website.

Non-Subscribers:

Check out our new bull market/bear market indicator (BBMI) by clicking here: Market Timing Strategy !

U.S. market yesterday.

A quiet but positive day. No volume at all until final half hour when they spiked the Dow up to a positive close going into the long weekend. Volume then increased to normal 0.6 billion shares traded on the NYSE.

The Dow closed up 18 points, or 0.1%. And wow. The S&P 500 closed up 6 points, ‘breaking out’ above 2,000 to close at 2003. The NYSE Composite closed up 0.3%. The Nasdaq closed up 0.5%. The Nasdaq 100 closed up 0.4%. The Russell 2000 closed up 0.7%. The DJ Transportation Avg. closed up 0.1%. The DJ Utilities Avg closed up 0.8%.

Gold closed down $2 an ounce at $1,287 an ounce.

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

The 20-yr bond etf TLT closed up 0.1%.

The China etf closed up 0.1%.

Asian markets mostly closed down in their last session of the week.

The Asia Dow closed down 0.4%.

Among individual markets:

Australia closed up 0.1%. China closed up 1.0%. Hong Kong closed unchanged. India closed up 0.3%. Indonesia closed down 0.9%. Japan closed down 0.2%. Malaysia closed down 0.5%. New Zealand closed down 0.3%. South Korea closed down 0.4%. Singapore closed down 0.1%. Taiwan closed down 0.4%. Thailand closed up 0.2%.

European markets closed mixed to flat yesterday.

The London FTSE closed up 0.2%. The German DAX closed up 0.1%. France’s CAC closed up 0.3%. Belgium closed down 0.1%. Denmark closed down 0.2%. Finland closed up 0.8%. Greece closed down 0.5%. Ireland closed down 0.4%. Italy closed up 0.5%. Netherlands closed up 0.2%. Norway closed down 0.6%. Portugal closed up 0.6%. Spain closed up 0.1%. Switzerland closed up 0.4%.

Global markets for the week. 

Asia’s turn to have negative week.

THIS WEEK (August  29)
DJIA 17,098 +0.6%
S&P 500 2003 + 0.8%
NYSE 11046 +0.9%
NASDAQ 4580 +0.9%
NASD 100 4082 +0.7%
Russ 2000 1174 +1.2%
DJTransprts 8408 -0.3%
DJ Utilities 564 +1.6%
XOI Oils 1,689 +2.0%
Gold bull. 1,287 +0.6%
GoldStcks 102.27 +2.8%
Canada 15625 +0.6%
London 6819 +0.7%
Germany 9470 +1.4%
France 4381 +3.0%
Hong Kong 24742 -1.5%
Japan 15424 -0.7%
Australia 5624 -0.3%
S. Korea 2068 +0.6%
India 26638 +0.8%
Indonesia 5136 -1.2%
Brazil 61244 +4.9%
Mexico 45628 +0.6%
China 2320 -1.1%
LAST WEEK (August 22)
DJIA 17,001 +2.0%
S&P 500 1988 + 1.7%
NYSE 10947 +1.4%
NASDAQ 4538 +1.7%
NASD 100 4052 +1.6%
Russ 2000 1160 +1.7%
DJTransprts 8429 +2.0%
DJ Utilities 555 +1.2%
XOI Oils 1,656 +0.9%
Gold bull. 1,280 -1.8%
GoldStcks 99.45 -2.5%
Canada 15535 +1.6%
London 6775 +1.3%
Germany 9339 +2.7%
France 4252 +1.9%
Hong Kong 25112 +0.6%
Japan 15539 +1.4%
Australia 5640 +1.5%
S. Korea 2056 -0.3%
India 26419 +1.2%
Indonesia 5198 +1.0%
Brazil 58407 +2.9%
Mexico 45374 +1.7%
China 2345 +0.6%
PREVIOUS WEEK (August 15)
DJIA 16662 +0.7%
S&P 500 1955 + 1.2%
NYSE 10796 +1.0%
NASDAQ 4464 +2.2%
NASD 100 3987 +2.6%
Russ 2000 1141 +0.9%
DJTransprts 8264 +2.1%
DJ Utilities 549 +1.1%
XOI Oils 1,642 -0.4%
Gold bull. 1,304 -0.5%
GoldStcks 101.97 +0.7%
Canada 15284 +0.6%
London 6689 +1.9%
Germany 9092 +0.9%
France 4174 +0.7%
Hong Kong 24954 +2.6%
Japan 15318 +3.6%
Australia 5559 +2.4%
S. Korea 2063 +1.6%
India 26103 +3.1%
Indonesia 5148 +1.9%
Brazil 55745 +2.1%
Mexico 44629 +1.2%
China 2331 +1.5%

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

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 busy holiday-shortened week for potential market-moving reports, including the ISM Mfg Index, auto sales, Factory Orders, the ADP Jobs report, and on Friday, the ‘Big-One’, the Labor Department’s monthly jobs report. 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:   The Eurozone is a Growing Problem for the U.S. Economy

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 from Wednesday is in your secure area of the Street Smart Report website.

I’ll be back with the next blog post Tuesday morning 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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