Morning Comment: Ripe for a Short-Term Bounce Soon?


Wall Street has finally come around to the understanding that when the Fed told us they were going to shift from a policy of massive accommodation…to one of tightening…that also told us that their safety net had been moved lower than it had previously been. In other words, as we said for most of the past few months, the “Fed put” is now further “out-of-the-money” than it used to be.

The question now is just how far below current levels that new level now stands. The Fed meets this week…and they’ll have their usual post-meeting announcement on Wednesday afternoon…which will be followed by the Chairman’s press conference. At that point, we could get some more clarity on this issue, but it’s a good bet that the “further clarity” still won’t be very definitive. So, although we could get a bounce in the stock market at any time, the line of least resistance is likely to be lower in the months ahead.

Firday’s sell-off came on much higher volume…and the number of stocks hitting 52-week lows came in at 525. Of course, the higher volume could have been due to the expiration on Friday, but that would have been out of the ordinary…given that it was not a “quadruple witch” expiration. In other words, there were SOME signs that we had a bit of capitulation on Friday…..No, this was nowhere near the kind of capitulation/washout that we see at a major bottom, but it might have enough to indicate that a short-term bottom could take place quite soon. It is very, very rare that a correction (or a bear market) takes place in a straight line…so we would expect several relief rallies along the way. If history is any guide, those bounces will be quite sharp.

That said, it sure doesn’t ...

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Morning Comment: Crucial Day For The Stock Market....Oil Ripe For A Breather

The stock market had another rough day yesterday…and all of the major averages got hit especially hard late in the day. This caused them all to close on their lows of the day. That said, the “internals” were not as ...

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THE WEEKLY TOP 10


THE WEEKLY TOP 10


Table of Contents:

1) Fed tightening might not hurt the economy much, but it WILL hurt the stock market (further).

2) The Fed cares MUCH more about the credit markets than the stock market.

3) Trying ...

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Morning Comment: Just How Strong Is The Consumer?


It was another rough day for the stock market yesterday…as the S&P 500 fell 1.4% and the Nasdaq declined 2.5%. The futures are looking lower again this morning, so it looks like our concerns from earlier this week…that the bounce ...

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Morning Comment: Emerging Markets Testing Key Resistance



The stock market saw some more upside follow-through yesterday from the big bounce off the lows it saw on Monday, but unlike Monday and Tuesday, the market did not close on its highs for the day. Don’t get us wrong, ...

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The FAANG Stocks Are Close to a Key Support Level



Sometimes people say that a move in the marketplace is a “delayed reaction” to some other development. This reasoning can frequently be used when people have no idea why some asset or another experienced a big move on a given ...

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Morning Comment: Will the action in January really tell us anything?


There are many short-term “seasonal” plays that usually workout quite well for the stock market. For instance, the stock market usually does well around long weekends (especially Memorial Day weekend). It also usually rallies in the days surrounding Thanksgiving and ...

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THE WEEKLY TOP 10



THE WEEKLY TOP 10


Table of Contents:

1) Lower asset prices do not mean the Fed has made a “policy mistake.”

1a) The last time the Fed tightened; they didn’t worry about the stock market.

2) Massive stimulus = more ...

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Morning Comment: Will Cryptos Bounce Once The Year-end Selling Ends?


There are two days left in 2021 and this is going to be a year where no Boston professional sports team won a championship. In fact, none of them even made the finals. There is no question that this is ...

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Morning Comment: Don't Blame The Fed



Well, we finally did get a relatively uneventful day in the stock market yesterday. The DJIA closed in positive territory…while the S&P 500 closed with a very mild loss (and the Nasdaq & Russell 2000 finishing the day with a ...

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Morning Comment: Omicron, Manchin ?, Turkey, and Micron (yes, Micron).

We have been saying recently that we believe the biggest headwind facing the markets right now is the significant change in policy by the Fed. However, there is little question that the larger drop in the futures this morning is ...

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Morning Comment: Is Tesla the canary in the coal mine?

A lot of focus this morning will be on the inflation data…when the CPI number (Consumer Price Index) comes out at 8:30. There are some people who believe we’ll get some relief this month…for reasons like the fact that oil ...

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