Analysis Topic: Stock & Financial Markets
The analysis published under this topic are as follows.
Thursday, August 19, 2021
Fed Between a Rock and a Hard Place / Stock-Markets / Financial Markets 2021
By: Monica_Kingsley
No, it‘s not about stocks, however well they hang on to recent gains. ATHs hit again amid recovering corporate credit markets, with both tech and value contributing. Value though was looking more vulnerable going into yesterday‘s session, and just one look at financials or energy confirms that – in the world of question marks over high pace of economic growth, it‘s the Fed that‘s between a rock and hard place.
On one hand, they have stubborn and quickening inflation to deal with (or pretend to deal with through the FOMC, the federal open mouth committee) – getting ahead of the curve means serious tightening (okay, first getting less loose monetarily, which is what taper is about). Given China‘s slowdown and corresponding U.S. figures projected, it would be a tall order to turn off the spigot into a weakening (but still growing) economy – that has potential to trigger quite a correction in stocks and risk-on assets. Note copper and oil paring recent gains, and going largely sideways for weeks – not rolling over, but the light is amber, irrespective of the infrastructure bill.
On the other hand, if the central bank does nothing, inflation would grow even more entrenched, sinking the stock market and economy over time, anyway. Don‘t forget about the massive spending – the Fed turning restrictive isn‘t the math favored outcome here.
Thursday, August 19, 2021
Surprising Consumer Activity May Suggest A Deeper Shift In The Markets / Stock-Markets / Financial Markets 2021
By: Chris_Vermeulen
Recent economic data suggests that US consumers are starting to pull away from the types of buying/spending activities we saw after the COVID virus event that shifted the US economy away from travel/office and towards work-from-home solutions. The deep decline in the US and global economic indicators, as a result of the COVID-19 shutdown, prompted an incredible recovery rally phase in the markets that had everyone chasing the uptrend in stocks, housing prices, and other assets. Now that we are beyond 15+ months after the March 2020 COVID lows, a new dynamic may be setting up in the markets.
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Wednesday, August 18, 2021
The Long Shadow Over Reflation Market Trades / Stock-Markets / Financial Markets 2021
By: Monica_Kingsley
Consumer confidence undershoot didn‘t bring down stocks as the retreat in yields (away from the reflation trades) didn‘t spook value stocks, and only lifted tech. It‘s true that XLK isn‘t firing on all cylinders, and the semiconductors‘ lag is just as concerning as Russell 2000 underperformance – so much for explaining the risks in stocks.
But as I wrote on Friday:
(…) Inflationary pressures building up aren‘t spooking the markets, there is no forcing the Fed‘s hand through rising yields. The bond vigilantes seem a distant memory as yields are trading well below their historical band, stunningly low given the hot inflation data. I‘m not saying red hot because the monthly CPI figure came in line with expectations, providing relief to the transitory camp. But last week‘s ISM services PMI and yesterday‘s PPI paint a very different story (to come).
My call about summer lull in bonds before these slowly but surely make their way higher (the 10-year to 1.80%), is turning out just as well as the inflation expectations‘ continued rebound. The cheap magic of Fed‘s June jawboning is losing its luster. Stocks steady and making marginally higher ATHs practically daily, uneven credit markets, gold holding up well following Monday‘s hit job, oil and copper trading in narrow ranges while the crypto uptrend goes on – fresh profits harvested across the markets yesterday, and growing today.
Regarding the taper noises many Fed speakers made during the week (it isn‘t just about Dallas), some form of taper looks indeed coming, even though they would have a hard time pulling it off against decelerating economy and massive fresh spending. Mission impossible if you will. Still, they make the appearance of wanting to try – wouldn‘t tanking markets and fresh calls to do something be a perfect excuse to expanding balance sheet solidly again? But they must at least internally in the Eccles building understand that a move against inflation is long overdue, and perhaps a repetition of June FOMC wouldn‘t do the trick this time.
Wednesday, August 18, 2021
Stock Market Is About To Crash - Part XXIII (This Time We Mean It) / Stock-Markets / Stock Market 2021
By: Avi_Gilburt
As the market began its historic rally off the March 2020 low, many were convinced that we had begun a bear market. In fact, I witnessed many people posting about short trades in which one cannot lose during that rally. The common perspective was that due to the highest Covid death rates being reported during the spring of 2020, economic shutdowns being seen all over the country, and record unemployment being reported, there was no way the market could continue to rally. It was simply impossible in most people’s minds.
Yet, continue to rally we did. Imagine if there was someone who warned you that we were going to 4000+ from the 2200SPX region, and who actually turned strongly bullish as we were hitting the lows. You would think that more and more people would be interested in what caused this person to maintain such a strong bullish bias in the face of utter despair.
It is uncanny. Avi and his team are working their ass off - and they make incredible calls. The constantly tell you to unlearn everything you learned before, and most people struggle with this. I still do. But the more I embrace their trading style the greener my account gets. I mean, when a guy tells you that we will see SPX 3200+ in a few weeks/months in the middle of a crisis like corona, it is very hard to let go of your shorts. I wish I did,.. Well, today, when Avi tells me what he thinks is most probably going to happen and how,... I listen. And it is a pleasure to watch my balance grow.
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Tuesday, August 17, 2021
August Stock Market Flash Crashes Historical Analysis / Stock-Markets / Stock Market Crash
By: Chris_Vermeulen
Weakening volume after an extended rally phase is fairly common. It represents a complacency in the markets where traders/investors are unwilling to chase an extended rally phase at higher prices. Often traders are waiting for some type of market correction or rotation to happen – which will allow them to deploy capital back into the markets at decreased price levels. Sometimes, this diminishing volume presents a unique scenario where traders shift their expectations away from traditional “buy the dip” thinking and that can sometimes create what is called a Flash Crash event.
Revisiting the August 2015 Flash Crash Event
In August 2015, a unique Flash Crash took place that prompted a -12.5% collapse in the S&P 500 in just four trading days – after a bout of selling pressure on a Wednesday/Thursday/Friday. The following Monday, the markets opened with a small lower opening gap, yet traders were unwilling to buy into the ASK and this created a very unique scenario where price exploration created a widening price void. As algos and computers continued to try to find active buyers in the marketplace, the ASK/BID spreads continued to widen as the liquidity trap had sprung.
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Tuesday, August 17, 2021
Fresh Stock Market Highs to Meet Fresh Volatility / Stock-Markets / Stock Market 2021
By: Monica_Kingsley
Inflationary pressures building up aren‘t spooking the markets, there is no forcing the Fed‘s hand through rising yields. The bond vigilantes seem a distant memory as yields are trading well below their historical band, stunningly low given the hot inflation data. I‘m not saying red hot because the monthly CPI figure came in line with expectations, providing relief to the transitory camp. But last week‘s ISM services PMI and yesterday‘s PPI paint a very different story (to come).
My call about summer lull in bonds before these slowly but surely make their way higher (the 10-year to 1.80%), is turning out just as well as the inflation expectations‘ continued rebound. The cheap magic of Fed‘s June jawboning is losing its luster. Stocks steady and making marginally higher ATHs practically daily, uneven credit markets, gold holding up well following Monday‘s hit job, oil and copper trading in narrow ranges while the crypto uptrend goes on – fresh profits harvested across the markets yesterday, and new ones growing today.
The countdown to the Jackson Hole is on though, with the Fed practically having to do something – something in all likelihood face saving only as the record deficit spending gives it little to no maneuvering room.
Monday, August 16, 2021
Stock Market Strong Intermediate Reversal Warning / Stock-Markets / Stock Market 2021
By: Andre_Gratian
Current Position of the Market
SPX Long-term trend: There is some evidence that we are still in the bull market which started in 2009 and which could continue into 2021 until major cycles take over, and it ends. A move up to ~4500 is possible before the current bull market makes a final top and SPX corrects into its next major cycle low due in 2023.
SPX Intermediate trend: SPX should now have reached its next intermediate top.
Analysis of the short-term trend is done daily with the help of hourly charts. They are important adjuncts to the analysis of daily and weekly charts which determine longer market trends.
Monday, August 16, 2021
How Options Are Fueling The Markets / Stock-Markets / Options & Warrants
By: Chris_Vermeulen
In the past week, we have seen the Nasdaq and the S&P reach all-time highs. Since the covid crash, we have seen some massive movement to the upside. I believe there are several factors driving these markets up.
First, let’s look at the covid crisis and how it played a role. As a result of the shutdowns, the FED took a really aggressive stance with its quantitative easing measures. Lots of money printing to pay for massive stimulus payouts. The worse news we hear historically is that the markets will react sharply to the downside.
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Sunday, August 15, 2021
Stock Market Margin Debt Bubble / Stock-Markets / Stock Market 2021
By: Nadeem_Walayat
A handful of stocks are driving the indices higher, Apple worth $2.3 trillion, Microsoft $2 trillion, Amazon $1.8 trillion, Google 1.8 trillion, Facebook $1 trillion even that over priced pile of poop Tesla came close to being valued at $1 trillion, we are definitely in a bubble, you only need to go onto youtube and watch the to the moon videos of Cathy Wood, literally everything's going to go to the moon because her barely out of puberty Quants decree it to be so. This is clearly a major warning sign of a unsustainable trend when indices are ruled by such a small clique of tech stocks where the greatest similarity is with the dot come bubble in terms of the valuation of stocks that actually produce revenues unlike the largely worthless dot com's of that time.
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Sunday, August 15, 2021
Increasing Risks for Stock Market CRASH 2021 - AI Stocks Portfolio Buying and Selling Levels / Stock-Markets / Stock Market 2021
By: Nadeem_Walayat
The US stock market has been content to rally to new highs with many stocks going to the Moon including most of our AI tech giants, a rally that I have been distributing into to the extent that I have now sold 80% of my holdings in the Top 6 AI stocks in my portfolio.
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Sunday, August 15, 2021
Financial System Liquidity Alarm / Stock-Markets / Financial Crisis 2021
By: Gary_Tanashian
Market liquidity is draining from different vantage points
On Wednesday I made a post that showed the “metallic credit spread” (as coined by Bob Hoye) known as the Gold/Silver ratio (GSR) flipped on its head (to Silver/Gold) to indicate a dangerous situation for the S&P 500, if past is prologue. Here is that post and here is the Tweet that followed…
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Thursday, August 12, 2021
Could a Collapse of Cryptocurrencies Force a Reform of the Global Monetary System? / Stock-Markets / Financial Markets 2021
By: Steve_H_Hanke
For thousands of years, there has been a dominant international currency. Until August 15, 1971, when President Nixon closed the gold window and revoked the right of foreign governments to redeem their dollar assets for gold, all the dominant currencies had either been gold or silver coins, or paper notes or accounts that were redeemable for gold or silver.
Historically, these dominant currencies would come and go, with their demise typically being the result of wars and war finance. The United States dollar supplanted the British pound, which had been the world’s dominant currency in the 19th century, at the onset of the First World War.
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Wednesday, August 11, 2021
Nasdaq Rallied To New All-Time Highs – Are We Starting Another Bullish Rally Phase? / Stock-Markets / Tech Stocks
By: Chris_Vermeulen
After the Fed’s comments in support of the US economy and the transitory nature of the recent inflation, the NASDAQ rallied to new all-time highs and closed at $15,167.75 on August 5, 2021. If the markets fall back into the “melt-higher” mode as we move away from Q2:2021 earnings, we may be setting up for a moderately big rally phase targeting $15,400 or higher in the NQ.
Global Traders Continue To Bank On A Rally In US Equities
Global traders have poured billions into the US markets over the past 4+ years as the US Federal Reserve has continued to act as the global banker of last resort. Because of this, global traders continue to invest in US equities as the strength of the US Dollar and the incredible post-Covid rally in the markets has blown past everyone’s expectations.
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Tuesday, August 10, 2021
Here’s What You Should Do About Inflation / Stock-Markets / Inflation
By: Submissions
By Justin Spittler - “What should I do about inflation?”My Uber driver recently asked me this after I told her what I do for a living.
And she’s not the only one asking me this question.
My mom… brother… friends who’ve never bought a stock in their lives… and many of you who read my essays every week want to know the same thing:
Why are pricing soaring? Should I do anything to prepare?
And most importantly…
What should I do with my current investments?
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Tuesday, August 10, 2021
Stock Market Dichotomy / Stock-Markets / Stock Market 2021
By: Andre_Gratian
Current Position of the Market
SPX Long-term trend: There is some evidence that we are still in the bull market which started in 2009 and which could continue into 2021 until major cycles take over, and it ends. A move up to ~4500 is possible before the current bull market makes a final top and SPX corrects into its next major cycle low due in 2023.
SPX Intermediate trend: SPX should now have reached its next intermediate top.
Analysis of the short-term trend is done daily with the help of hourly charts. They are important adjuncts to the analysis of daily and weekly charts which determine longer market trends.
Sunday, August 08, 2021
Are Stock Markets Ready For An August Surprise? / Stock-Markets / Stock Market 2021
By: Chris_Vermeulen
One thing that seems to be certain in the markets right now is the past hyper-bullish trending which appears to have weakened since early 2021. As a result, the longer-term Custom Indexes we use to help gauge and understand market trends are showing a very clear weakening of trends.
In this article, we are going to review three of our custom index charts on a weekly chart basis, the Custom US Stock Market Index, the Smart Cash Global Market Index, and the Custom Volatility Index. Each of these charts highlights something unique related to current market trends.
Use this information to read between the line and to help establish your own expectations for the markets going forward. We’ll provide our conclusion near the end of this research article.
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Thursday, August 05, 2021
We Will See SPX 4600 In 2021 / Stock-Markets / Stock Market 2021
By: Avi_Gilburt
As we came into 2021, I outlined to those willing to listen that I expected at least a 20% continuation rally in the SPX, and I would prefer for us to strike at least the 4600SPX region this year. And, at the time, the SPX was in the 3750SPX region.
Thus far, the market has provided us with an 18% rally in 2021, and I still expect us to rally to 4600SPX this year. The question that we are answering over the coming weeks is simply a matter of the path to 4600SPX.
Now, as usual, I take the time to read other articles on Seeking Alpha to glean some of the thinking within the market. And, amongst the articles calling the market a “bubble” or “wrong,” as well as several others attempting to call the top yet again, there are a few issues I would like to address.
First, I have been reading many analysts viewing this rally as the Covid “recovery” rally. And, it really makes me scratch my head.
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Thursday, August 05, 2021
Revisiting The Excess Phase Stock Market Peak Pattern / Stock-Markets / Stock Market 2021
By: Chris_Vermeulen
The setup of the Excess Phase peak pattern consists of an exuberant rally to a peak (Phase #1), followed by a moderate price correction that sets up into a sideways flagging pattern (Phase #2). If the INDU and TRAN continue to move in a sideways flagging formation after recently moving moderately lower, we may start to see a new Excess Phase Peak setup in these two major indexes. This could be a warning of a much bigger breakdown in trends in the near future.
Please take a minute to review our earlier research posts related to the Excess Phase Peak setup (below) and how it related to the current market trend:
- November 25, 2020: HOW TO SPOT THE END OF AN EXCESS PHASE – PART I
- November 27, 2020: HOW TO SPOT THE END OF AN EXCESS PHASE – PART II
- May 20, 2021: BITCOIN COMPLETES PHASE #3 OF EXCESS PHASE TOP PATTERN – WHAT NEXT?
Thursday, August 05, 2021
Dramatic Divergence between US and European Stock Markets / Stock-Markets / Global Stock Markets
By: EWI
This chart shows a "dramatic divergence" between U.S. and European stocks
Cryptocurrencies and so-called meme stocks have certainly received a lot of attention from investors.
Another investment category that has been in favor recently is European equities. No, they may not be quite as "hot" as, say, bitcoin -- but they've been receiving more attention than usual.
Let's start with some recent headlines:
- U.S. investors are pouring money into European stock funds (Marketwatch, May 27)
- European Stocks Are Coming In From the Cold (Bloomberg, June 17)
- It's a Good Time to Invest in Europe (Kiplinger, June 24)
Monday, August 02, 2021
Stock Market Intermediate Top Reached / Stock-Markets / Stock Market 2021
By: Andre_Gratian
Current Position of the Market
SPX Long-term trend: There is some evidence that we are still in the bull market which started in 2009 and which could continue into 2021 until major cycles take over, and it ends. A move up to ~4500 is possible before the current bull market makes a final top and SPX corrects into its next major cycle low due in 2023.
SPX Intermediate trend: SPX has now reached its next intermediate top.
Analysis of the short-term trend is done daily with the help of hourly charts. They are important adjuncts to the analysis of daily and weekly charts which determine longer market trends.