rally - What We're Reading - StockBuz2024-03-28T22:06:10Zhttp://stockbuz.ning.com/articles/feed/tag/rallyBull Case Thwarted By Bumpy Landinghttp://stockbuz.ning.com/articles/bull-case-thwarted-by-bumpy-landing2023-02-25T15:51:15.000Z2023-02-25T15:51:15.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p><a href="http://storage.ning.com/topology/rest/1.0/file/get/10972951660?profile=RESIZE_180x180" target="_blank"><img class="align-full" src="http://storage.ning.com/topology/rest/1.0/file/get/10972951660?profile=RESIZE_180x180" alt="10972951660?profile=RESIZE_180x180" /></a>Wall Street’s reaction to hotter-than-estimated inflation data suggested growing bets the Federal Reserve has a long ways to go in its aggressive tightening crusade, making the odds of a soft landing look slimmer.</p>
<p>After a lengthy period of subdued equity swings, volatility has been gaining traction. That doesn’t bode well for a market that’s gotten more expensive after an exuberant rally from its October lows. Stock gains have been dwindling by the day amid fears that a recession in the world’s largest economy could further hamper the prospects for Corporate America.</p>
<p>A slide in the S&P 500 Friday added to its worst weekly selloff since early December. The tech-heavy Nasdaq 100 tumbled about 2% as the Treasury two-year yield topped 4.8%, the highest since 2007. The dollar climbed. Swaps are now pricing in 25 basis-point hikes at the Fed’s next three meetings, and bets on the peak rate rose to about 5.4% by July. The benchmark sits in a 4.5%-4.75% range.</p>
<p>“There’s little room for upside in stocks right now given the inflation news, current market valuations after the January rally, and a weak Q4 earnings season,” Brian Overby, senior markets strategist at Ally. “The ‘no landing’ view is quickly becoming more of a ‘bumpy landing’ view with the concept of higher interest rates for longer settling in.”</p>
<p>The unexpected acceleration in the personal consumption expenditures gauge underscored the risks of persistently high inflation. Furthermore, resilient spending paired with the exceptional strength of the labor market will make it tougher for the Fed to get inflation to its 2% goal. Separate data showed US consumer sentiment rose to the highest in a year while new home sales topped forecasts.</p>
<p>Officials may need to raise rates as high as 6.5% to defeat inflation, according to new research that was critical of the central bank’s initially slow response to rising prices. In a paper presented Friday in New York, a quintet of Wall Street economists and academics argue that policymakers have an overly-optimistic outlook and will need to inflict some economic pain to get prices under control.</p>
<p>Read: Fed Officials Flag Risk of Sticky Inflation as PCE Comes in Hot</p>
<p>Mohamed El-Erian says financial markets are starting to doubt whether the Fed can bring inflation down to its target.</p>
<p>“We’re seeing actual and survey indicators heading the wrong way,” El-Erian, the chairman of Gramercy Funds and a Bloomberg Opinion columnist told Bloomberg Television.</p>
<p>Cleveland Fed President Loretta Mester said a bigger-than-expected rise in the central bank’s preferred inflation gauge shows the need to keep raising rates, but stopped short of suggesting this warranted a step-up to a half-point hike. The report is “just consistent with the fact that the Fed needs to do a little more on our policy rate to make sure that inflation is moving back down,” she added.</p>
<p>As investors position for the risk that the Fed persists with hawkish policy moves, they have been dumping equities and cash alike in favor of bonds, Bank of America Corp. strategists said.</p>
<p>Global equity funds lost $7 billion in outflows in the week through Feb. 22, while $3.8 billion left cash funds, according to a note from the bank, which cited EPFR Global data. At $4.9 billion, bonds drew additions for an eighth straight week in the longest such streak since November 2021, the team led by Michael Hartnett said.</p>
<p>David Donabedian, chief investment officer of CIBC Private Wealth US:</p>
<p>“So the bullish narrative that the market had coming into the year of slowing economy headed toward a soft landing and slowing inflation allowing the Fed to stop raising rates ASAP, that’s been blown up here by the data. My view is that the market rally that we’ve seen since October was a bear-market rally.”</p>
<p>Peter van Dooijeweert at Man Solutions:</p>
<p>“Today’s PCE data is a little bit more than the market wants to deal with. It’s fine to have rising rates off good economic data and avoiding a hard landing. It’s just not okay for the market to have to grapple with a return to rising inflation.”</p>
<p>Greg Wilensky, head of US fixed income at Janus Henderson:</p>
<p>“This was not the news the Fed or investors had been hoping for and, as such, we expect markets to adjust to the likelihood that the Fed will need to raise rates higher, and keep them higher for longer, than they had been pricing in previously. Viewing the hotter inflation data together with continued strength in the labor market and consumer spending implies that the Fed still has work to do. It appears investors will have to wait a little longer for the much-anticipated Fed pause.”</p>
<p>Krishna Guha, vice chairman at Evercore:</p>
<p>“The likelihood of achieving a soft landing dips, with the risk of no-landing potentially forcing the Fed to push rates higher and hold longer, with greater risk that this ultimately pushes the economy into a mild recession. So risk-off pure and simple. We still think the Fed is not likely to return to 50bp hikes, though that risk has nudged up with the latest data.”</p>
<p>Chris Zaccarelli, chief investment officer at Independent Advisor Alliance:</p>
<p>“It is much too soon for the Fed to say ‘mission accomplished.’ It is far too early to extend duration and buy the dips in bond prices, let alone trying to continue to buy the dips in the stock market. We have been exercising much more caution and have advised our clients to be careful and not aggressive at this point in the economic cycle.”</p>
<p>Peter Boockvar, author of the Boock Report:</p>
<p>“Bottom line, Treasury yields are moving higher in response to the higher than expected inflation stats and reminder that while the trend will still be down, it will still take time to get to some Fed comfort level. Either way, at least looking at the core PCE, we FINALLY have ZERO real interest rates. I know some are still trying to figure out how many hikes the Fed has left, but it’s not many and AGAIN, higher rates for a longer time frame should be the focus.”</p>
<p>Jeffrey Roach, chief economist at LPL Financial:</p>
<p>“The Fed may still decide to hike by 0.25% at the next meeting but this report means that the Fed will likely continue hiking into the summer. Markets will likely stay choppy during these months where higher rates have yet to materially cool consumer spending.”</p>
<p>Money managers are fortifying portfolios and hedging the risk of a prolonged inflation fight by sticking to credit maturing in just a few years.</p>
<p>Some funds are actively cutting so-called duration, a measure of sensitivity to interest rates, to limit the fallout if central banks keep hiking to tackle inflation. Others are simply focusing on short-dated notes as the additional yield they get from longer securities is too small to justify the risk of a slump when rates rise.</p>
<p>In corporate news, Boeing Co. sank after pausing deliveries of its 787 Dreamliner over a documentation issue with a fuselage component. Carvana Co. slumped on a much wider loss than Wall Street had expected for the used-car retailer. Beyond Meat Inc. surged on sales that exceeded expectations and the plant-based meat maker showed progress toward its goal of becoming profitable.</p>
<p>On the geopolitical front, the US will impose a 200% tariff on all imports of Russian-made aluminum, as well as aluminum products made with metal smelted or cast in the country, in a move that could ripple through global manufacturing supply chains.</p>
<p>Treasury Secretary Janet Yellen warned China and other nations against providing material support to Russia, saying any such actions would amount to an evasion of sanctions and would “provoke very serious consequences.”</p>
<p>Elsewhere, the yen retreated as Bank of Japan Governor nominee Kazuo Ueda warned against any magical solution to produce stable inflation and normalize policy as he largely stuck to the existing central bank script in the first parliamentary hearing to approve his appointment.</p>
<p>Courtesy of <a href="https://ca.finance.yahoo.com/news/asia-stocks-open-mixed-bumpy-224011362.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAC2KqAQpcrytYQPOJ4yCRcMbYMvwdiaPZX34n1bji-ZZ55RH7z70lgthb9ZvWMb8MZl4gOvrxQKxBRHCRMVqta-oComTXzSU2jZU0GhGpTGNySDOoed1G2MK71-5Rb7wGmKX5a1Z3-so7lHR2OD_VqeNN4C0wDmlapkxf7ys_4do" target="_blank">Bloomberg and Yahoo</a></p></div>Carl Icahn Says It's Still A Bear Markethttp://stockbuz.ning.com/articles/carl-icahn-says-it-s-still-a-bear-market2022-11-12T17:20:54.000Z2022-11-12T17:20:54.000ZKoshttp://stockbuz.ning.com/members/Kos<div><iframe width="560" height="315" src="https://www.youtube.com/embed/Le-hcgt26nU" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture" allowfullscreen=""></iframe></div>The Equity Recovey Continues But Will There Be New Highs?http://stockbuz.ning.com/articles/the-equity-recovey-continues-but-will-there-be-new-highs2019-01-20T01:14:31.000Z2019-01-20T01:14:31.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p style="outline: currentcolor none medium;" data-tag="p">U.S. stocks experienced their third straight week of gains, with the S&P 500 Index rising 2.6% and gaining more than 10% since Christmas Day.<sup>1</sup> Investors were encouraged by comments from the Federal Reserve indicating a less aggressive policy stance and a sense that trade issues may be improving. Strong outflows from stock funds have also been an important contrarian indicator that investor capitulation had reached a limit. Several market areas were standout performers last week, including industrials, retail sectors, technology and energy, which was helped by a 7.5% climb in oil prices.<sup>1</sup> A near -term consolidation is possible, given the strong climb over the last few weeks, but a return to December’s lows seems unlikely.</p>
<h3 data-tag="h3"> </h3>
<p data-tag="p"><strong>1. <em>The Fed should remain data dependent, which should be good for stocks.</em></strong> Fed comments in October seemed to indicate it would continue to raise rates and sell off its balance sheet for the foreseeable future. But Fed Chair Jerome Powell walked back those comments in early January, causing investors to breathe a sigh of relief. If concerns about the global economy ease, we could see a couple of additional rate hikes this year. Conversely, weakening economic sentiment could cause the Fed to stand pat. In any case, the central bank appears focused on continuing to promote economic growth.</p>
<p data-tag="p"><strong>2. <em>Trade concerns have eased a bit, at least for now.</em></strong> At the minimum, the United States and China appear committed to additional trade negotiations. Given that both President Trump and President Xi are eager for a political win makes it likely that some sort of deal could be reached.</p>
<p data-tag="p"><strong>3. <em>The jobs market remains an important source of economic strength.</em></strong> December’s employment report was, in a word, stellar. We are keeping a close watch on wages, which have been accelerating in recent months as the jobs market tightens. This increase could represent an eventual source of inflation.</p>
<p data-tag="p"><strong>4. <em>Manufacturing is slowing, but remains healthy.</em></strong> January’s ISM manufacturing data dropped sharply, but remained in expansion territory.<sup>2</sup></p>
<p data-tag="p"><strong>5. <em>The ongoing government shutdown could become a negative for economic growth.</em></strong> The current shutdown now has the dubious distinction of being the longest in history. Last week, JP Morgan lowered its forecast of first quarter GDP growth from 2.25% to 2%.<sup>3</sup> The longer this shutdown continues, the more economic damage it is likely to cause.</p>
<p> </p>
<h3 data-tag="h3">Despite the late-2018 correction, fundamentals remain solid</h3>
<p data-tag="p">Stocks have rebounded strongly over the last three weeks, regaining almost half of what they lost in the sharp meltdown in the fourth quarter of 2018. Greater stability in bond yields has certainly helped equity market sentiment. We think bond markets will likely remain relatively stable given that the Fed looks to be backing off from its rate-tightening campaign and a spike in economic activity seems unlikely. At the same time, news on the trade front appears to be improving, even if specifics about a deal remain scarce. Other geopolitical risks could persist, but outside of trade we doubt any of them will significantly affect global economic growth. A combination of greater bond market stability, a pause in the Fed’s rate hiking and some improvement around economic sentiment may help equity markets continue to recover.</p>
<p data-tag="p">Although the financial headlines have been pessimistic since October, overall economic and market fundamentals remain solid. Monetary and fiscal policy remain equity-friendly, the economy is still growing, companies are enjoying solid profit margins and corporate earnings are expanding. In other words, we see no real signs of a recession on the horizon.</p>
<p data-tag="p">That said, though, we think the highs for the current bull market may have already been realized last year. We believe volatility is likely to remain relatively elevated, which means we could see another near-term selloff at any point. Overall, we think equity markets are topping out, but that process can take quite a while and there is still room for upside. To us, this suggests that 2019 will be a year where investment selectivity is critical. In particular, we suggest focusing on companies with higher earnings quality and lower leverage.</p>
<p data-tag="p">Courtsy of <a href="https://www.nuveen.com/bob-doll-weekly-commentary" target="_blank" rel="noopener">Bob Doll @ Nuveen</a></p>
</div>Is The Stock Market Rally Over?http://stockbuz.ning.com/articles/is-the-stock-market-rally-over2016-11-05T22:00:58.000Z2016-11-05T22:00:58.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p style="font-family: 'Source Sans Pro', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 20px; color: #414141; text-align: left; padding: 20px 50px 0px 50px; margin: 0;"><span style="color: #ffff99;">As technicians battle over whether our "<em>hated"</em> seven year rally still has legs, I continue to return and ask myself "<em>has anything truly blown up?".  I do personally believe the US Dollar will continue it strength and that will continue to put pressure on commodities, dividend payers and discretionary.  Financials and insurers will push higher.  Can the rest of the boat survive?  Are earnings guidance showing a 'rosey' picture of the future?  Will Trump win?  Too many unknowns for me. </em> This post, using monthly charts, brings me back to earth.  While I have no need to catch the absolute top, it gives me specific areas which need to be defined.  I remain cautious and yes, have numerous short positions as well as longs.  That doesn't mean, however, that I'm willing to give up just yet.  I hope you enjoy-</span></p>
<p style="font-family: 'Source Sans Pro', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 20px; color: #414141; text-align: left; padding: 20px 50px 0px 50px; margin: 0;"><span style="color: #ffffff;">While the technicians usually write about the short tem, I want to zoom out a little and use a monthly chart of the New York Composite ($NYA). For those who follow my webinars, we are following the charts very closely as the market conditions are frail in my opinion. We could rally from here, but the long term charts continue to disappoint in my work. This <strong>New York Composite chart ($NYA)</strong> shows the close Friday, November 4th, 2016.</span></p>
<p style="font-family: 'Source Sans Pro', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 20px; color: #414141; text-align: left; padding: 20px 50px 0px 50px; margin: 0;"><span style="color: #ffffff;">While the October 31st close did not close below the 10-month Moving average or give a MACD sell signal, it only took a pullback of one more day (November 1) to generate a sell signal on both the MACD and the 10 month moving average. That is a fine detail on a monthly chart. These can be seen looking at the Zoombox on the far right. By the Friday close shown below, the picture was getting a little more difficult. Martin Pring's Monthly KST is below zero as well.</span></p>
<p style="font-family: 'Source Sans Pro', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 20px; color: #414141; text-align: left; padding: 20px 50px 0px 50px; margin: 0;"><span style="color: #ffffff;"><a target="_blank" href="http://stockchartscom.cmail19.com/t/r-l-yhthkjuk-bjyittruk-o/"><span style="color: #ffffff;"><img style="padding: 10px 0px 20px 0px; display: block; border: 0; margin: 0 auto; width: 100%; height: auto;" src="http://i8.cmail19.com/ei/r/2C/518/1A3/074942/csimport/1478291778294799949101_7.png" /></span></a></span></p>
<p style="font-family: 'Source Sans Pro', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 20px; color: #414141; text-align: left; padding: 20px 50px 0px 50px; margin: 0;"><span style="color: #ffffff;">The note I wrote on this chart above back in August 2016 as the $SPX made it's high is extremely important now. We actually did cross above the signal line but so far this month we are below. We will need to wait for the November close and the level of 10414, but it is very important to realize how frail the market setup is. There were only 3 times on this chart that a monthly sell signal reversed higher. One was the coordinated central bank move in September 2012. The other was the brief rally in 1999 before the tech top. The current one is in play. If we close below 10414, we have an important signal.</span></p>
<p style="font-family: 'Source Sans Pro', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 20px; color: #414141; text-align: left; padding: 20px 50px 0px 50px; margin: 0;"><span style="color: #ffffff;">Why is this so important? The real problem is understanding what has happened through the passage of time from the high on the MACD in 2014. As oil plummeted from June 2014 and the energy sector was decimated, it slowly affected other industries and sectors. By the spring of 2015, the $NYA chart above made marginal new highs over the 2014 level. As the industry dominoes started to fall, the market pulled back most of 2015 with a final low in January/February 2016 coinciding with Crude Oil's final low. As oil rallied, GDP numbers started to improve and recently we just had a GDP print of 2.9%.</span></p>
<p style="font-family: 'Source Sans Pro', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 20px; color: #414141; text-align: left; padding: 20px 50px 0px 50px; margin: 0;"><span style="color: #ffffff;">My position is if energy (Oil, Natural Gas, Wind, Solar, Coal, Nuclear, Ethanol) fails to hold up, we could see more pressure on the economy. Since the market top of May 22,2015, three groups have gained meaningfully from that day, three are close to flat and three declined heavily.</span></p>
<p style="font-family: 'Source Sans Pro', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 20px; color: #414141; text-align: left; padding: 20px 50px 0px 50px; margin: 0;"><span style="color: #ffffff;"><img style="padding: 10px 0px 20px 0px; display: block; border: 0; margin: 0 auto; width: 100%; height: auto;" src="http://i9.cmail19.com/ei/r/2C/518/1A3/074942/csimport/14782932931621646324954_8.png" />However, zooming in on the markets for the last 3 months after the initial rally off the floor in February 2016, we have a different picture. While energy and financials are marginally positive, big sectors like consumer discretionary, industrials and materials are down. As well, Biotech within Healthcare has been crushed. Technology has been relatively flat, even with Apple, Google, Amazon, Facebook and Netflix.</span></p>
<p style="font-family: 'Source Sans Pro', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 20px; color: #414141; text-align: left; padding: 20px 50px 0px 50px; margin: 0;"><span style="color: #ffffff;"><img style="padding: 10px 0px 20px 0px; display: block; border: 0; margin: 0 auto; width: 100%; height: auto;" src="http://i10.cmail19.com/ei/r/2C/518/1A3/074942/csimport/1478293586406439420757_9.png" />In a nutshell, for my way of thinking, we need Energy to continue to rebound. If that doesn't happen, it is a global sector that slowed the MACD from the highs of 2014 to the very low levels we saw in the first chart. If Energy rolls over again, which it appears to be doing now, this could be the major derailment that gives our global markets negative momentum. The other sectors don't look strong enough to carry the economy forward in my mind. The monthly charts are warning us. It could break out to the upside, but I think it is important to understand what a sell signal in November and confirmation in December could mean for the longer term. We don't usually get two whipsaws on monthly charts.</span></p>
<p style="font-family: 'Source Sans Pro', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 20px; color: #414141; text-align: left; padding: 20px 50px 0px 50px; margin: 0;"><span style="color: #ffffff;">Lastly, some of the webinars over the last two weeks have set the stage for how close this market is to a major reversal. If you are not aware of how fine that picture is, I would encourage you to watch <a target="_blank" href="http://stockchartscom.cmail19.com/t/r-l-yhthkjuk-bjyittruk-b/"><span style="color: #ffffff;">Commodities Countdown 2016-10-27</span></a> and then the <a target="_blank" href="http://stockchartscom.cmail19.com/t/r-l-yhthkjuk-bjyittruk-n/"><span style="color: #ffffff;">Commodities Countdown 2016-11-03</span></a>. I have been bullish until late September so I am not quick to jump on the bear bandwagon. But when the time comes, keeping your capital becomes more important than making money.</span></p>
<p style="font-family: 'Source Sans Pro', Helvetica, Arial, sans-serif; font-size: 15px; line-height: 20px; color: #414141; text-align: left; padding: 20px 50px 0px 50px; margin: 0;"><span style="color: #ffffff;">Courtesy of <a href="http://stockcharts.com/articles/chartwatchers/2016/11/the-monthly-close-for-october-couldnt-have-been-closer-to-a-sell-signal.html" target="_blank"><span style="color: #ffffff;">StockCharts.com</span></a></span></p>
</div>Don't Be Fooled The Bond Rally Continueshttp://stockbuz.ning.com/articles/don-t-be-fooled-the-bond-rally-continues2016-08-11T01:08:59.000Z2016-08-11T01:08:59.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;"><a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1291344?profile=original"><img class="align-left" src="http://storage.ning.com/topology/rest/1.0/file/get/1291344?profile=RESIZE_480x480" width="450"></a>We’ve been bulls on 30-year Treasury bonds since 1981 when we stated, “We’re entering the bond rally of a lifetime.” It’s still under way, in our opinion. Their yields back then were 15.2%, but our forecast called for huge declines in inflation and, with it, a gigantic fall in bond yields to our then-target of 3%.</span></span></p>
<h3><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">The Cause of Inflation</span></span></h3>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">We’ve argued that the root of inflation is excess demand, and historically it’s caused by huge government spending on top of a fully-employed economy. That happens during wars, and so inflation and wars always go together, going back to the French and Indian War, the Revolutionary War, the War of 1812, the Mexican War of 1846, the Civil War, the Spanish American War of 1898, World Wars I and II and the Korean War. In the late 1960s and 1970s, huge government spending, and the associated double-digit inflation (<em>Chart 1</em>), resulted from the Vietnam War on top's LBJ’s War on Poverty.</span></span></p>
<p align="center"><img alt="" style="width: 550px; height: 360px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_1_20160810_OTB.jpg"></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">By the late 1970s, however, the frustrations over military stalemate and loss of American lives in Vietnam as well as the failures of the War on Poverty and Great Society programs to propel lower-income folks led to a rejection of voters’ belief that government could aid Americans and solve major problems. The first clear manifestation of this switch in conviction was Proposition 13 in California, which limited residential real estate taxes. That was followed by the 1980 election of Ronald Reagan, who declared that government <em>was</em> the basic problem, not the solution to the nation’s woes.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">This belief convinced us that Washington’s involvement in the economy would atrophy and so would inflation. Given the close correlation between inflation and Treasury bond yields (Chart 1), we then forecast the unwinding of inflation—disinflation—and a related breathtaking decline in Treasury bond yields to 3%, as noted earlier. At that time, virtually no one believed our forecast since most thought that double-digit inflation would last indefinitely. </span></span></p>
<h3><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Lock Up For Infinity?</span></span></h3>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Despite the high initial yields on “the long bond,” as the most-recently issued 30-year Treasury is called, our focus has always been on price appreciation as yields drop, not on yields, per se. A vivid example of this strategy occurred in March 2006—before the 2007–2009 Great Recession promoted the nosedive in stocks and leap in Treasury bond prices. I was invited by Professor Jeremy Siegel of Wharton for a public debate on stocks versus bonds. He, of course, favored stocks and I advocated Treasury bonds.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">At one point, he addressed the audience of about 500 and said, “I don’t know why anyone in their right mind would tie up their money for 30 years for a 4.75% yield [the then-yield on the 30-year Treasury].” When it came my turn to reply, I asked the audience, “What’s the maturity on stocks?” I got no answer, but pointed out that unless a company merges or goes bankrupt, the maturity on its stock is infinity—it has no maturity. My follow-up question was, “What is the yield on stocks?” to which someone correctly replied, “It’s 2% on the S&P 500 Index.” </span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">So I continued, “I don’t know why anyone would tie up money for infinity for a 2% yield.” I was putting the query, apples to apples, in the same framework as Professor Siegel’s rhetorical question. “I've never, never, never bought Treasury bonds for yield, but for appreciation, the same reason that most people buy stocks. I couldn't care less what the yield is, as long as it's going down since, then, Treasury prices are rising.”</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Of course, Siegel isn’t the only one who hates bonds in general and Treasuries in particular. And because of that, Treasurys, unlike stocks, are seldom the subject of irrational exuberance. Their leap in price in the dark days in late 2008 (<em>Chart 2</em>) is a rare exception to a market that seldom gets giddy, despite the declining trend in yields and related decline in prices for almost three decades.</span></span></p>
<p align="center"><img alt="" style="width: 550px; height: 360px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_2_20160810_OTB.jpg"></p>
<h3><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Treasury Haters</span></span></h3>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Stockholders inherently hate Treasurys. They say they don’t understand them. But their quality is unquestioned, and Treasurys and the forces that move yields are well-defined—Fed policy and inflation or deflation (Chart 1) are among the few important factors. Stock prices, by contrast, depend on the business cycle, conditions in that particular industry, Congressional legislation, the quality of company management, merger and acquisition possibilities, corporate accounting, company pricing power, new and old product potentials, and myriad other variables.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Also, many others may see bonds—except for junk, which really are equities in disguise—as uniform and gray. It's a lot more interesting at a cocktail party to talk about the unlimited potential of a new online retailer that sells dog food to Alaskan dogsledders than to discuss the different trading characteristics of a Treasury of 20- compared to 30-year maturity. In addition, many brokers have traditionally refrained from recommending or even discussing bonds with clients. Commissions are much lower and turnover tends to be much slower than with stocks. </span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Stockholders also understand that Treasurys normally rally in weak economic conditions, which are negative for stock prices, so declining Treasury yields are a bad omen. It was only individual investors’ extreme distaste for stocks in 2009 after their bloodbath collapse that precipitated the rush into bond mutual funds that year. They plowed $69 billion into long-term municipal bond funds alone in 2009, up from only $8 billion in 2008 and $11 billion in 2007.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Another reason is that most of those promoting stocks prefer them to bonds is because they compare equities with short duration fixed-income securities that did not have long enough maturities to appreciate much as interest rates declined since the early 1980s.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Investment strategists cite numbers like a 6.7% annual return for Treasury bond mutual funds for the decade of the 1990s while the S&P 500 total annual return, including dividends, was 18.1%. But those government bond funds have average maturities and durations far shorter than on 30-year coupon and zero-coupon Treasurys that we favor and which have way, way outperformed equities since the early 1980s</span></span>.</p>
<h3><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Media Bias</span></span></h3>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">The media also hates Treasury bonds, as their extremely biased statements reveal. The June 10 edition of <em>The Wall Street Journal</em> stated: “The frenzy of buying has sparked warnings about the potential of large losses if interest rates rise. The longer the maturity, the more sharply a bond’s price falls in response to a rise in rates. And with yields so low, buyers aren’t getting much income to compensate for that risk.” Since then, the 30-year Treasury yield has dropped from 2.48% to 2.21% as the price has risen by 8.3%.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Then, the July 1 <em>Journal</em> wrote: “Analysts have warned that piling into government debt, especially long-term securities at these slim yields, leaves bondholders vulnerable to the potential of large capital losses if yields march higher.” Since then, the price of the 30-year Treasury has climbed 1.7%. </span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">While soft-pedaling the tremendous appreciation in long-term sovereigns this year, <em>Wall Street Journal</em> columnist James MacKintosh worries about the reverse. On July 28, he wrote, “Investors are taking a very big risk with these long-dated assets....Japan's 40-year bond would fall 15% in price if the yield rose by just half a percentage point, taking it back to where it stood in March. If yields merely rise back to where they started the year, it would be catastrophic for those who have chased longer duration. The 30-year Treasury would lose 14% of its value, while Japan's 40-year would lose a quarter of its value.” </span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">The July 11 edition of the <em>Journal</em> said, “Changes in monetary policy could also trigger potential losses across the sovereign bond world. Even a small increase in interest rates could inflict hefty losses on investors.” </span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">But in response to Brexit, the Bank of England has already eased, not tightened, credit, with more likely to follow. The European Central Bank is also likely to pump out more money as is the Bank of Japan as part of a new $268 billion stimulus package. Meanwhile, even though Fed Chairwoman Yellen has talked about raising interest rates later this year, we continue to believe that the next Fed move will be to reduce them.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Major central banks have already driven their reference rates to essentially zero and now negative in Japan and Europe (<em>Chart 3</em>) while quantitative easing exploded their assets (<em>Chart 4</em>). The Bank of England immediately after Brexit moved to increase the funds available for lending by U.K. banks by $200 billion. Earlier, on June 30, BOE chief Mark Carney said that the central bank would need to cut rates “over the summer” and hinted at a revival of QE that the BOE ended in July 2012.</span></span></p>
<p align="center"><img alt="" style="width: 550px; height: 359px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_3_20160810_OTB.jpg"></p>
<p align="center"><img alt="" style="width: 550px; height: 359px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_4_20160810_OTB.jpg"></p>
<h3><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Lonely Bulls</span></span></h3>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">We’ve been pretty lonely as Treasury bond bulls for 35 years, but we’re comfortable being in the minority and tend to make more money in that position than by running with the herd. Incidentally, we continue to favor the 30-year bond over the 10-year note, which became the benchmark after the Treasury in 2001 stopped issuing the “long bond.” At that time, the Treasury was retiring debt because of the short-lived federal government surpluses caused by the post–Cold War decline in defense spending and big capital gains and other tax collections associated with the Internet stock bubble.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">But after the federal budget returned to deficits as usual, the Treasury resumed long bond issues in 2006. In addition, after stock losses in the 2000–2002 bear market, many pension funds wanted longer-maturity Treasurys to match against the pension benefit liability that stretched further into the future as people live longer, and they still do.</span></span></p>
<h3><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Maturity Matters</span></span></h3>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">We also prefer the long bond because maturity matters to appreciation when rates decline. Because of compound interest, a 30-year bond increases in value much more for each percentage point decline in interest rates than does a shorter maturity bond (<em>Chart 5</em>).</span></span></p>
<p align="center"><img alt="" style="width: 550px; height: 360px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_5a_20160810_OTB.jpg"></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Note (<em>Chart 6</em>) that at recent interest rates, a one percentage point fall in rates increases the price of a 5-year Treasury note by about 4.8%, a 10-year note by around 9.5%, but a 30-year bond by around 24.2%. Unfortunately, this works both ways, so if interest rates go up, you’ll lose much more on the bond than the notes if rates rise the same for both.</span></span></p>
<p align="center"><img alt="" style="width: 403px; height: 278px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_6_20160810_OTB.jpg"></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">If you really believe, as we have for 35 years, that interest rates are going down, you want to own the longest-maturity bond possible. This is true even if short-term rates were to fall twice as much as 30-year bond yields. Many investors don’t understand this and want only to buy a longer-maturity bond if its yield is higher.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Others only buy fixed-income securities that mature when they need the money back. Or they'll buy a ladder of bonds that mature in a series of future dates. This strikes us as odd, especially for Treasurys that trade hundreds of billions of dollars’ worth each day and can be easily bought and sold without disturbing the market price. Of course, when you need the cash, interest rates may have risen and you’ll sell at a loss, whereas if you hold a bond until it matures, you’ll get the full par value unless it defaults in the meanwhile. But what about stocks? They have no maturity so you’re never sure you’ll get back what you pay for them.</span></span></p>
<h3><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Three Sterling Qualities</span></span></h3>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">We’ve also always liked Treasury coupon and zero-coupon bonds because of their three sterling qualities. First, they have gigantic liquidity with hundreds of billions of dollars’ worth trading each day, as noted earlier. So all but the few largest investors can buy or sell without disturbing the market.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Second, in most cases, they can’t be called before maturity. This is an annoying feature of corporate and municipal bonds. When interest rates are declining and you’d like longer maturities to get more appreciation per given fall in yields, issuers can call the bonds at fixed prices, limiting your appreciation. Even if they aren’t called, callable bonds don’t often rise over the call price because of that threat. But when rates rise and you prefer shorter maturities, you’re stuck with the bonds until maturity because issuers have no interest in calling them. It’s a game of heads the issuer wins, tails the investor loses.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Third, Treasurys are generally considered the best-quality issues in the world. This was clear in 2008 when 30-year Treasurys returned 42%, but global corporate bonds fell 8%, emerging market bonds lost 10%, junk bonds dropped 27%, and even investment-grade municipal bonds fell 4% in price.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Slowing global economic growth and the growing prospects of deflation are favorable for lower Treasury yields. So is the likelihood of further ease by central banks, including even a rate cut by the Fed, as noted earlier. </span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Along with the dollar (<em>Chart 7</em>), Treasurys are at the top of the list of investment safe havens as domestic and foreign investors, who own about half of outstanding Treasurys, clamor for them.</span></span></p>
<p align="center"><img alt="" style="width: 550px; height: 358px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_7_20160810_OTB.jpg"></p>
<h3><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Sovereign Shortages</span></span></h3>
<p><span style="font-family: times new roman,times,serif;">Furthermore, the recent drop in the federal deficit has reduced government funding needs so the Treasury has reduced the issuance of bonds in recent years. In addition, tighter regulators force U.S. financial institutions to hold more Treasurys. </span></p>
<p><span style="font-family: times new roman,times,serif;">Also, central bank QE has vacuumed up highly-rated sovereigns, creating shortages among private institutional and individual buyers. The Fed stopped buying securities in late 2014, but the European Central Bank and the Bank of Japan, which already owns 34% of outstanding Japanese government securities, are plunging ahead. The resulting shortages of sovereigns abroad and the declining interest rates drive foreign investors to U.S. Treasurys.</span></p>
<p><span style="font-family: times new roman,times,serif;">Also, as we’ve pointed out repeatedly over the past two years, low as Treasury yields are, they’re higher than almost all other developed country sovereigns, some of which are negative (<em>Chart 8</em>). So an overseas investor can get a better return in Treasurys than his own sovereigns. And if the dollar continues to rise against his home country currency, he gets a currency translation gain to boot.</span></p>
<p align="center"><img alt="" style="width: 550px; height: 358px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_8_20160810_OTB.jpg"></p>
<h3><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">"The Bond Rally of a Lifetime"</span></span></h3>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">We believe, then, that what we dubbed “the bond rally of a lifetime” 35 years ago in 1981 when 30-year Treasurys yielded 15.2% is still intact. This rally has been tremendous, as shown in <em>Chart 9</em>, and we happily participated in it as forecasters, money managers and personal investors.</span></span></p>
<p align="center"><img alt="" style="width: 550px; height: 360px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_9_20160810_OTB.jpg"></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Chart 9 uses 25-year zero-coupon bonds because of data availability but the returns on 30-year zeros were even greater. Even still, $100 invested in that 25-year zero-coupon Treasury in October 1981 at the height in yield and low in price and rolled over each year maintains its maturity or duration to avoid the declining interest rate sensitivity of a bond as its maturity shortens with the passing years. It was worth $31,688 in June of this year, for an 18.1% annual gain. In contrast, $100 invested in the S&P 500 index at its low in July 1982 is now worth $4,620 with reinvested dividends. So the Treasurys have outperformed stocks by 7.0 <em>times</em> since the early 1980s.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">So far this year, 30-year zero-coupon Treasurys have returned 26% compared to 3.8% for the S&P 500. And we believe there’s more to go. Over a year ago, we forecast a 2.0% yield for the 30-year bond and 1.0% for the 10-year note. If yields fall to those levels by the end of the year from the current 2.21% and 1.5%, respectively, the total return on the 30-year coupon bond will be 5.7% and 5.6% on the 10-year note. The returns on zero-coupon Treasurys with the same rate declines will be 6.4% and 5.1% (<em>Chart 10</em>).</span></span></p>
<p align="center"><img alt="" style="width: 400px; height: 307px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_10_20160810_OTB.jpg"></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Besides Treasurys, sovereign bonds of other major countries have been rallying this year as yields fell (<em>Chart 11</em>) and investors have stampeded into safe corrals after Brexit.</span></span></p>
<p align="center"><img alt="" style="width: 550px; height: 360px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_11_20160810_OTB.jpg"></p>
<h3><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Finally Facing Reality</span></span></h3>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Interestingly, some in the media are finally facing the reality of this superior performance of Treasury bonds and backpedaling on their 35-year assertions that it can’t last. The July 12 <em>Wall Street Journal</em> stated: “Bonds are churning out returns many equity investors would envy. Remarkably, more than 80% of returns on U.S., German, Japanese and U.K. bonds are attributable to gains in price, Barclays index data show. Bondholders are no longer patient coupon-clippers accruing steady income.”</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">The July 14 <em>Journal</em> said, “Ultra low interest rates are here to stay,” and credited not only central bank buying of sovereigns but also slow global growth. Another <em>Journal</em> article from that same day noted that central banks can make interest rates even more negative and, if so, “even bonds bought at today’s low rates could go up in price.” And in the July 16 <em>Journal</em>, columnist Jason Zweig wrote, “The generation-long bull market in bonds is probably drawing to a close. But high quality bonds are still the safest way to counteract the risk of holding stocks, as this year’s returns for both assets has shown. Even at today’s emaciated yields, bonds still are worth owning.” What a diametric change from earlier pessimism on bonds!</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">The July 11 <em>Journal</em> said, “Recently, the extra yield investors demand to hold the 10-year relative to the two-year Treasury note hit its lowest level since November 2007 (<em>Chart 12</em>). In the past, investors have taken this narrowing spread as a warning sign that growth momentum may soon slow because the Fed is about to raise interest rates—a move that would cause shorter-dated bond yields to rise faster than longer-dated ones. Now, like much else, it is largely being blamed on investors’ quest for yield.” Note (Chart 12) that when the spread went negative, with 2-year yields exceeding those on 10-year Treasury notes, a recession always followed. But that was because the Fed's attempts to cool off what it saw as an overheating economy with higher rates was overdone, precipitating a business downturn. That's not li kely in today's continuing weak global economy.</span></span></p>
<p align="center"><img alt="" style="width: 550px; height: 360px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_12_20160810_OTB.jpg"></p>
<h3><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Persistent Stock Bulls</span></span></h3>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Nevertheless, many stock bulls haven’t given up their persistent love of equities compared to Treasurys. Their new argument is that Treasury bonds may be providing superior appreciation, but stocks should be owned for dividend yield. </span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">That, of course, is the exact opposite of the historical view, but in line with recent results. The 2.1% dividend yield on the S&P 500 exceeds the 1.50% yield on the 10-year Treasury note and is close to the 2.21% yield on the 30-year bond. Recently, the stocks that have performed the best have included those with above average dividend yields such as telecom, utilities and consumer staples (<em>Chart 13</em>).</span></span></p>
<p align="center"><img alt="" style="width: 550px; height: 358px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_13_20160810_OTB.jpg"></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Then there is the contention by stock bulls that low interest rates make stocks cheap even through the S&P 500 price-to-earnings ratio, averaged over the last 10 years to iron out cyclical fluctuations, now is 26 compared to the long-term average of 16.7(<em>Chart 14</em>). This makes stocks 36% overvalued, assuming that the long run P/E average is still valid. And note that since the P/E has run above the long-term average for over a decade, it will fall below it for a number of future years—if the statistical mean is still relevant.</span></span></p>
<p align="center"><img alt="" style="width: 550px; height: 362px;" src="http://ggc-mauldin-images.s3.amazonaws.com/uploads/newsletters/Image_14_20160810_OTB.jpg"></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Instead, stock bulls points to the high earnings yield, the inverse of the P/E, in relation to the 10-year Treasury note yield. They believe that low interest rates make stocks cheap. Maybe so, and we’re not at all sure what low and negative nominal interest rates are telling us.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">We’ll know for sure in a year or two. It may turn out to be the result of aggressive central banks and investors hungry for yield with few alternatives. Or low rates may foretell global economic weakness, chronic deflation and even more aggressive central bank largess in response. We’re guessing the latter is the more likely explanation.</span></span></p>
<p><span style="font-size: 16px;"><span style="font-family: times new roman,times,serif;">Courtesy of <a href="http://www.agaryshilling.com/insight/" target="_blank">A.GaryShilllingsInsight</a></span></span></p></div>DeMark Ponders A Bear Market Rallyhttp://stockbuz.ning.com/articles/demark-ponders-a-bear-market-rally2016-01-21T18:29:49.000Z2016-01-21T18:29:49.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p>Has anything changed fundamentally or is this just a bear market rally?  I haven't heard anything from the Fed but crude oil's short covering is definitely a driver.  Ditto for retail seeing short covering ahead of tomorrows retail sales numbers.  For 'how long' is open to speculation.  Let's see what DeMark has to say.</p>
<p><iframe src="https://www.youtube.com/embed/hQE23n_hEm4?rel=0" allowfullscreen="" frameborder="0" height="315" width="560"></iframe></p>
</div>The Big Market Squeezehttp://stockbuz.ning.com/articles/the-big-market-squeeze2014-12-20T00:12:42.000Z2014-12-20T00:12:42.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p><a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1291142?profile=original"><img class="align-right" src="http://storage.ning.com/topology/rest/1.0/file/get/1291033?profile=RESIZE_320x320" width="300"></a>Volatility definitely increased leading up to this weeks quadruple witching <em>and</em> the <a href="http://headlines.ransquawk.com/headlines/us-index-changes-and-expiries-quadruple-witching-and-the-s-p-rebalance-due-on-friday-19th-december-2014-15-12-2014" target="_blank">S&P (400, 500 and 600) index re-balancing</a> taking place tonight after the close. Selling the last two weeks resulted in oversold conditions in the near term charts and massive short covering at the market as every fund and investment bank bought new shares (as they rebalanced ahead of the indexes), resulted in two astounding days of back to back two percent gains. Bulls were partying in the streets but is it warranted? Has anything truly changed? </p>
<p>Yes, the Fed has reassured investors that they have no intention of raising rates any time soon which is what everyone wanted to hear but we still have a bull market which has had an incredible six-year run so just "who" is going to buy at these elevated levels for their 2015 portfolio?</p>
<p>I also do not believe that crude oil (and oil/gas companies) are out of the woods yet either. <a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1291057?profile=original"><img class="align-left" src="http://storage.ning.com/topology/rest/1.0/file/get/1291057?profile=RESIZE_320x320" width="200"></a>There's that pesky $OVX which is the VIX for crude oil. Note how it's not coming back to earth? Hmmmmm This certainly seems to imply to me that crude oil's fall is not over......but hey, I could be wrong. Let's watch and see if worries of oil & gas name defaults doesn't resurface in the weeks to come.<a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1291114?profile=original"><img class="align-right" src="http://storage.ning.com/topology/rest/1.0/file/get/1291114?profile=RESIZE_320x320" width="300"></a></p>
<p>For what it's worth everyone is curious how often the market had two day, two percent moves and here are the numbers as well as a 20-year chart. How you interpret it is up to you. (click to enlarge)</p>
<p>With Christmas and New Years the next two weeks <em>and</em> fund managers headed out to vacation, volumes will be abysmal and algos set to low speed. It's a great time to shut down the computer and take time off yourself. Barring any unexpected news such as defaults, I would expect the market to drift sideways to up. Happy Holidays to all.</p>
<p></p></div>Take A Moment To Reviewhttp://stockbuz.ning.com/articles/take-a-moment-to-review2014-10-26T22:52:07.000Z2014-10-26T22:52:07.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p>Let’s take a moment and put the market’s current trading action into perspective. Earlier this year bullish sentiment reached levels not seen in years or even decades depending upon data source. Market volatility had also fallen to levels not seen in years as the market was steadily making new all-times highs. S&P 500 actually went 63 trading days without a 1% percent daily move higher or lower. A feat last accomplished in 1995. And it has been more than three years without a 10% or greater S&P 500 correction. This is four times the average duration of time between corrections. Not to mention the market shrugged off tensions in Ukraine, Ebola in West Africa, the rise of ISIS in the Middle East, slowing global growth concerns and the Fed slowly easing up on stimulus. Honestly the market had gotten ahead of itself and was in need of a cool-off period. More likely than not, that is what it is doing.<br />
<br />
Yes, weak economic data out of Asia and Europe is a concern as they are major U.S. trading partners, but that weakness has not yet materialized in U.S. manufacturing reports. Just yesterday Industrial Production was reported to have climbed 1% in September. This was better than twice the consensus estimate of 0.4%. This report was further supported by the Philadelphia Fed manufacturing index climbing to 20.7, again besting expectations. Furthermore, weekly initial jobless claims fell to 264,000 last week, the lowest reading since 2000. If business activity was slowing due to weakness overseas, it would stand to reason that weekly claims would be rising, not falling as employers began cutting employees.</p>
<p>Of course U.S. mid term elections are a little over a week away.  What Congressman wants to see the S&P500 failing going into that? </p>
<p>75% of companies who have reported thus far are beating estimates although guidance seems lackluster in many areas.  CNBS (sic) will intentionally parade the "beats" in an effort to <span style="text-decoration: line-through;">cheer lead</span> promote risk appetite.</p>
<p>Commodities are, for the most part, in a bear market and crude oil is looking like a bearish flag.  Another drop lower won't help support the market.  To the contrary, any reported fighting near oil fields or disruption in oil supplies could create a vicious short-covering rally.  We can only watch the news for this.  Not worth a bet.</p>
<p>EU bank stress tests have been released with 20% failing to meet requirements.  Are their lows near?<br />
<br />
Ebola is also an issue, but honestly it feels as if the media is causing more harm than good. Not so many weeks ago it was ISIS or ISIL that was going to destroy the world, now it is Ebola. The reality is the “outbreak” that they constantly speak of is three patients in the U.S. Unfortunately the medical community was not as prepared as they thought they were. Their initial mistakes and miscues have prompted action and it now appears they are getting better organized to deal with any future patients. A full-blown global pandemic just does not seem all that probable.<br />
<br />
Perhaps more than any other issue or concern out there, European markets appear disappointed that the ECB has not done more and in turn Asian and U.S. markets are suffering. Honestly, it is somewhat puzzling that the ECB has not moved from merely words to a more decisive plan of taking action. The region is on the verge of its third recession in six years and deflation is refusing to abate. Sovereign debt levels maybe high now, but deflation and a lack of growth are not going to help this situation at all. Should the ECB step up (which it was rumored they would in January 2015), the current market rout could end just as quickly as it started.</p>
<p>Hat tip <a href="http://blog.stocktradersalmanac.com/post/Lets-All-Take-a-Deep-Breath-SPY-DIA-QQQ" target="_blank">Stocktradersalmanac</a></p>
</div>Is It A Correction Or Bear Market?http://stockbuz.ning.com/articles/is-it-a-correction-or-bear-market2014-10-16T15:14:53.000Z2014-10-16T15:14:53.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p>“Is the S&P in a correction or Bear market Mom?” is the question I received from my daughter last night. She’s been learning the stock market slowly over the last five or so years and I cringe at times with the questions she poses however no question is a bad question. I’d rather she come to me than blindly follow some pundit or supposed guru to $99/month subscription. After all, if he/she is so smart – why do they even need to charge for anything? Just sit back and enjoy the wealth.</p>
<p>While the big boys and their algorithms have their calculated strategy, this is how I explained it to her in my simple, 'laywomans' terms. In my mind big money typically buys at major supports during a correction. They sit back and salivate at an opportunity to, not buy the dip, buy buy on the <em>cheap</em> and define their risk.</p>
<p>For me, I consider the monthly 20 SMA as you can see from my <a href="http://t.co/2jdRIMma1h" target="_blank">prior post on the subject here</a>.</p>
<p>If only a correction, one would want to see SPX bounce off of the 20month or (the line in the sand) the prior correction low to HOLD. If that prior correction low were to break, all bets are off as volume spikes and we’ve entered a Bear Market. Again, remember we're talking a <strong><span style="text-decoration: underline;">monthly chart</span></strong> here and not a daily or weekly.</p>
<p>The ensuing Bear market sell off is wicked fast and generally lasts only a few months. Stock market bubbles and crisis'............well that's a horse of a different color. In a Bear market however you'll still see rallies. They are not a signal that all is well. Rallies are swift and sharp back up to resistance where you re-load your shorts and define risk above the 20month as your cover point. I've provided a few charts so you get the idea of my theory.</p>
<p>Are we in a Bear market now? No one knows Dorothy (ignore what they say on "entertainment" news television but if you want to dip a toe, I wouldn’t do it until we reach the 20month OR retrace 78.6% of the prior drop. I don’t need to catch a bottom……….but I also don’t need my face ripped off by volatility.</p>
<p><a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1290966?profile=original"><img class="align-center" src="http://storage.ning.com/topology/rest/1.0/file/get/1290966?profile=RESIZE_1024x1024" width="750"></a></p>
<p>You will notice that I have two different 20month SMA's on the chart. One is based on the "close" and the other based on the "low" of the candle. Of course there are anomalies where the 20month did not hold such as the fear sell off in 2012 when Greece was rioting and there were concerns the taper. Operation Twist was magically announced and all was well. Regardless it is of note that <strong>the prior correction low was <span style="text-decoration: underline;">never</span> violated.</strong> Fed to the rescue. No bear market. <a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1290995?profile=original"><img class="align-center" src="http://storage.ning.com/topology/rest/1.0/file/get/1290995?profile=RESIZE_1024x1024" width="750"></a></p>
<p>This is important as you see an enormous volume spike as the prior correction low was taken out. Guess who had their stops there. Yep - big money. Now the 20month SMA (either based off the low or the close) has become resistance. Hang on to your hats. <a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1291021?profile=original"><img class="align-center" src="http://storage.ning.com/topology/rest/1.0/file/get/1291021?profile=RESIZE_1024x1024" width="750"></a></p></div>Jackson Hole 'Pop' Continueshttp://stockbuz.ning.com/articles/jackson-hole-pop-continues2014-08-18T13:42:41.000Z2014-08-18T13:42:41.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p><span><a target="_blank" href="http://ts1.mm.bing.net/th?&id=HN.608002275123923129&w=300&h=300&c=0&pid=1.9&rs=0&p=0"><img class="align-left" src="http://ts1.mm.bing.net/th?&id=HN.608002275123923129&w=300&h=300&c=0&pid=1.9&rs=0&p=0" height="139" width="186" /></a>Markets being forward looking, I believe we're seeing a snap back ahead of this weeks Jackson Hole meeting (Aug 21-23) where policymakers will discuss at length their thinking around the labor markets of major economies, perhaps dropping clues about the path for monetary policy in the months ahead.</span></p>
<p>The spotlight will be on <a class="inline_asset" href="http://www.cnbc.com/id/10000336" data-nodeid="10000336" target="_self">Janet Yellen</a>, who will speak on Friday in her first appearance at Jackson Hole as Fed chair.</p>
<p>Most will recall <a class="inline_asset" href="http://www.cnbc.com/id/10000310" data-nodeid="10000310" target="_self">Ben Bernanke</a> two years ago that paved the way for an unprecedented $85 billion per month stimulus plan.</p>
<p>While most don't expect anything spectacular out of the Fed Chairwoman given the improvement in the unemployment rate and overall economy, I have to wonder what will happen <em>after</em> the air is let out of the hopium balloon.  QE is still set to end in October.  Tensions between Russian and Ukraine have sent yields lower.  Whether there is further escalation or a resolution is yet to be seen.  The economy is recovering like a limp noodle, but it <em>is</em> improving.  September and October are historically difficult months for equity returns.</p>
<p>Stocks are up, bonds have been holding.  One of them is lying.  Just sayin'.</p>
<p></p>
</div>Will The Stockmarket Breakout Sustain?http://stockbuz.ning.com/articles/will-the-market-breakout-sustain2013-06-17T02:00:00.000Z2013-06-17T02:00:00.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p><span style="font-family: times new roman,times;" class="font-size-3"><a target="_self" href="http://storage.ning.com/topology/rest/1.0/file/get/1290300?profile=original"><img class="align-left" style="padding: 10px;" src="http://storage.ning.com/topology/rest/1.0/file/get/1290300?profile=RESIZE_480x480" height="189" width="375"></a></span></p>
<p><span class="font-size-3" style="font-family: times new roman,times;">Is it possible we are in the early stages of an enormous secular stockmarket bull run? We talk about this continually in Chat on StockBuz.<br></span></p>
<p><span class="font-size-3" style="font-family: times new roman,times;">Since 1900, there have been four large stock market basing patterns which exceeded 12 years in length:</span></p>
<ul>
<li><span class="font-size-3" style="font-family: times new roman,times;">1906 to 1924—18 years</span></li>
<li><span class="font-size-3" style="font-family: times new roman,times;">1929 to 1955—26 years</span></li>
<li><span class="font-size-3" style="font-family: times new roman,times;">1966 to 1982—16 years</span></li>
<li><span class="font-size-3" style="font-family: times new roman,times;">2000 to 2013—13 years</span></li>
</ul>
<p></p>
<p><span class="font-size-3" style="font-family: times new roman,times;">What prior breakouts had in common is investor behavior reflected an underlying distrust or</span> <span class="font-size-3" style="font-family: times new roman,times;">disinterest and characterized by underinvestment</span> <span class="font-size-3" style="font-family: times new roman,times;">in equities. </span> <span class="font-size-3" style="font-family: times new roman,times;">This results in a rebound that is <em>relentless </em>(emphasis mine), providing</span> <span class="font-size-3" style="font-family: times new roman,times;">little opportunity to buy on pullbacks. <em>To put it bluntly, the distrust creates so many bears, that the inflow of bulls plows them over and with minimal pullback, they've forced to cover higher and higher...............fueling the market</em> (my words - not in the article)<br></span></p>
<p><span class="font-size-3" style="font-family: times new roman,times;">How and what caused those breakouts to <em>sustain</em> is a point of discussion in this <a href="http://freepdfhosting.com/9deebdf8ce.pdf" target="_blank">Raymond James presentation </a> (courtesy of <a href="http://marketfolly.com" target="_blank">MarketFolly</a>)</span></p>
<p><span class="font-size-3" style="font-family: times new roman,times;">Also reviewed is the improving US economic data (albeit weak) the recent rise in interest rates and the decisions which lie ahead for the Federal Reserve so grab a cup of coffee, put the phone on silent and enjoy.</span></p>
<p></p>
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</center></div>Risk Appetite Returns On Global Datahttp://stockbuz.ning.com/articles/risk-appetite-returns-on2010-09-05T20:30:00.000Z2010-09-05T20:30:00.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p><strong>This from <a href="http://www.futuresmag.com/News/2010/9/Pages/Market-risk-appetite-.aspx">Futures Magazine</a> briefly reiterates what we already know from last week but gives a nice overview of what's coming this week both in the U.S. and [especially] abroad.</strong></p>
<p></p>
<p><strong>Risk rebounds on improving global data</strong></p>
<p>The past week began with disappointment stemming from Japan ’s lack of direct currency intervention and risk aversion looked probable to continue into the week. This was not the case as better than expected Australian 2Q GDP started a ripple effect culminating into a global wave of positive data surprises. Upbeat manufacturing numbers midweek out of China and the US saw safe havens soften and sent US equities soaring higher by greater than 2% Wednesday. The positive data stream continued Thursday as US July Pending Home Sales printed a much better than consensus +5.2% as compared to an expected -1% decline. Friday’s much anticipated NFP capped the data session as Private Payrolls jumped by +67k and the headline number declined by a less than expected -54k versus expectations of a -105k drop, seemingly cementing a renewed emergence of risk appetite.</p>
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<p><strong>The most recent risk rally faces a number of hurdles in the week ahead</strong></p>
<p>Negative sentiment looks to have reversed with the prior week’s data releases but this most recent risk rally faces a number of hurdles in coming weeks. September has historically been an underperforming month for US equities and with the S&P facing critical resistance into its 100-day sma, currently 1105/10, along with a major horizontal pivot zone into 1130/35 may see near-term upside capped into these levels. Until these key price zones are breached, the current rally cannot be viewed as anything more than a correction towards range-bound conditions. Furthermore, much of the large moves realized this past week have occurred on extremely thin liquidity representing the opinions of a smaller percentage of market participants. Normal liquidity conditions should return next week. Price action in correlated markets also seems to confirm further circumspection into the current market euphoria. Gold, the alternative currency and a constant in the ‘safe haven’ asset class continues to trade at elevated levels into $1250/ oz. This may be a result of the softer dollar but the yellow metal’s divergence with risk suggests further downside could be in store. Elevated levels are a theme shared by European debt spreads as well. Although Friday has seen core-periphery spreads tighten, mainly as a result of a shot higher in German bond yields, they remain near May pre-crisis response levels and indicates continued concerns about the peripheral Eurozone(Ireland, Greece, Portugal) are highly probable.</p>
<p><strong>A Multitude of Interest Rate Announcements in the Week Ahead</strong></p>
<p>The week ahead sees a number of interest rate statements beginning down under with the RBA policy rate decision on Tuesday. The Reserve Bank is likely to remain on hold but accelerating growth evidenced by the stronger 2Q GDP suggests tightening for the following November meeting is an increasing possibility. The BOJ interest rate decision, also scheduled for release Tuesday, is likely to be a non-event as the target rate will remain steady at 0.10%. The focus in Japan remains to be on continued intervention speculation and the political uncertainty surrounding the September elections.</p>
<p>Wednesday sees the Bank of Canada rate decision and the market consensus for a 25 bp rate hike to 1% seems less of a likelihood considering the worse-than-expected 2Q GDP print of 2%. The risk is for a higher USDCAD as the market seems divided with a slight edge for a 25bp rate hike. The increasing uncertainty surrounding the decision may see the Canadian dollar weaken considerably if no tightening measures are taken. The heavy week of interest rate announcements winds down Thursday as the Bank of England is expected to keep the target rate steady at 0.50%. This is likely to be a non-event, the BOE’s policy is to withhold any post-decision press conferences unless there is a change in the target rate, and the focus will most likely be on the bevy of data scheduled for release next week.</p>
<p><strong>Outcome from emergency BOJ meeting & political uncertainty may impact the JPY</strong></p>
<p>Over the last few weeks BOJ Governor Shirakawa has been faced with mounting pressure from Prime Minister Kan to address the strengthening Japanese yen and deflation. In response, on Monday the BOJ held an emergency meeting and boosted their bank lending facility by 10 trillion to 30 trillion yen. While it was encouraging to see the BOJ take action, their response was viewed by many as being too little, too late and disappointed market participants. Many officials wanted the BOJ to engage in large-scale monetary easing; however Shirakawa is currently averse to increasing their purchases of government bonds outright from 1.8 trillion yen or lowering the policy rate from 0.1%.</p>
<p>Meanwhile, a more troubling topic at the moment for the JPY is the announcement of Ichiro Ozawa's candidacy for the DPJ Party Election on September 14th. The latest public opinion polls suggest the current Prime Minister, Naoto Kan, is currently leading by over 4:1; however Ozawa heads the largest faction in the DPJ and has been far more vocal in stating the need for intervention to prevent a stronger JPY. The risk here is that everyone will be so caught up in the election that they won’t be able to further address to Yen or their faltering economy. Additionally, many government officials in Japan feel that without U.S. support, unilateral intervention to halt the appreciating yen could ultimately be unsuccessful. In this scenario, it’s probable to see another test of the 15-year low in USD/JPY around 83.60 and the 8-year low in EUR/JPY near 105.45 over the coming weeks.</p>
<p><strong>Key data and events to watch next week</strong></p>
<p>The U.S. starts its week of economic data on Wednesday with the Fed’s Beige Book and July consumer credit. Thursday is set to release July Trade balance and the usual jobless claims. Friday wraps up the week with July wholesale inventories.</p>
<p>The Eurozone kicks off on Monday with September Sentix Investor confidence and the ECB’s Jurgen Stark will speak in Berlin. Tuesdays sees Swiss unemployment for August, German July factory orders, and speeches from the ECB’s Jurgen Stark and Lorenzo Bini Smaghi. Set for release on Wednesday is German and French July trade balance figures as well as Germany’s July industrial production. On Thursday, France sees its 2Q final non-farm payrolls and Germany is set to release August final CPI numbers. Friday rounds out the data with French July manufacturing and industrial production numbers.</p>
<p>The U.K. starts the action off the August Hailfax house price index, BRC August retail sales monitor, and new car registrations. Wednesday sees July industrial and manufacturing productions numbers and the August NIESR GDP estimate. The Bank of England will announce interest rates and its asset purchase target as well as release trade balance numbers for July on Thursday. Friday finishes things up with August PPI input and output readings.</p>
<p>Japan releases its August official reserve assets numbers and kicks of the BOJ monetary policy meeting on Monday. Tuesday sees the July preliminary leading and coincident index, August money stock, July machine orders, current account, trade balance and the BOJ will announce its target rate. Thursdays data include August bankruptcies and Eco Watchers survey results. Friday closes out the week with 2Q final GDP, August domestic CGPI and the BOJ will release its August 9-10 Board meeting minutes.</p>
<p>Canada kicks off on Wednesday with July building permits, August Ivey PMI and the Bank of Canada rate announcement. Set for release on Thursday is August housing starts as well as July new housing price index and international merchandise trade. Friday’s data sees the August employment report to wrap up the week.</p>
<p>The data down under begins on Monday with Australia’s AiG performance of construction index for August, ANZ job advertisements and TD Securities inflation numbers. On Tuesday, the RBA will announce its cash target, New Zealand is set to release 2Q manufacturing activity, and the July Australian home loans is set for release. On deck for Wednesday is New Zealand August card spending and the August Australian employment report. Thursday sees 2Q NZ Terms of Trade index and Australia foreign reserves numbers for August.</p>
<p>Be on the lookout for important China data as well. Monday sees 4Q China Manpower survey and trade balance numbers for August including exports and imports will be released on Friday.</p>
</div>A Correction? Another headfake? My .02http://stockbuz.ning.com/articles/a-correction-another-headfake2010-05-02T16:43:44.000Z2010-05-02T16:43:44.000ZStockBuzhttp://stockbuz.ning.com/members/1t2xbcvddkrir<div><p style="TEXT-ALIGN: right"><a class="noborder" href="http://storage.ning.com/topology/rest/1.0/file/get/1290020?profile=original" target="_blank"></a></p>
<p><a class="noborder" href="http://storage.ning.com/topology/rest/1.0/file/get/1289962?profile=original" target="_blank"><font size="2"><img style="FLOAT: right" alt="" src="http://storage.ning.com/topology/rest/1.0/file/get/1289962?profile=RESIZE_180x180" width="50" height="96"></font></a><font size="2">Should I buy the dip? Should I blame it on lunar movements or is it another headfake? Will the Bears be punished once more and we head higher as we have in the past? Well for what its worth [which is zilch] I think we're in for a larger correction. Obviously I'm not a Economist or a Hedge Fund Manager [I wish] but I believe there are number of reasons we'll see *sell in May and go away* come to fruition this year.</font></p>
<ul>
<li><font size="2">First and foremost, spiralling Eurozone debt and the <em>additional</em> debt they'll have to issue to bring themselves out of the immediate crisis. The PIIGS are not dead and I believe it will take months for this to fully play out as the ECB does its best to drum up support for the Euro in the meantime. This fear alone has and will send some investors to safer havens such as currencies and bonds.</font></li>
<li><font size="2">Then you've got to wonder where the ECB is going to get all of this money? Sure, turn on the printing press works but you know they're heavily invested in various markets and they could certainly use some of that money right now, couldn't they.</font></li>
<li><font size="2">Seasonality not only in commodities but in the S&P itself due to capital gains. The more profitable or trending season according to</font> <a href="http://spectrumcommodities.com/education/commodity/charts/sp.html"><font size="2">Spectrum Commodities</font></a> <font size="2">for equity markets being November to April and slightly less profitable May to October, The difference going back to the 1930s may be 10-17% depending on the index, but to big investors, 10% is substantial.</font></li>
<li><font size="2">Earnings. So we've reported better than expected Q1 and Q2 and prices trended higher. At some point, these higher earnings [based on economic recovery] become *baked in*. There simply isn't much further to go based on earnings potential and eight [8] months left in 2010 the so prices must adjust and big business rings the register. What better time to take profits but just before the kid are let out of school, cottages are opened, the boat comes out of storage and Summer's on the horizon?</font></li>
<li><font size="2">Recent guidance and earnings beats. Even</font> <a href="http://www.bespokeinvest.com/thinkbig/2010/4/30/earnings-beat-rate-declines.html"><font size="2">Bespoke</font></a> <font size="2">noticed that earnings beats are receding. Handwriting on the wall of what's to come? It's tough to factor in higher prices when forward guidance doesn't impress.</font></li>
<li><font size="2">Valuation. Have you noticed the recent increase in downgrades to to overvalution? The ratings agencies are telling you something but were you listening?</font></li>
<li><font size="2">Speaking of forward earnings; take a look. Are they substantially higher as they were over the last 12 months ago or slightly up to flat?</font></li>
<li><font size="2">Then you've got talk of financial reform [which will probably amount to nothing useful whatsoever] and the GS invesitgation; both giving the Bears something to harp over.</font></li>
<li>Lastly and maybe most imporantly for the markets is the extension for US unemployment benefits. Extended 60 days retroactive to April 5th, these loom to expire the beginning of June with Congress [at least up to now] not enthusiastic of granting another extension. After all, how long can they continue to prop up the numbers? Now when/if these expire, how great do you feel the impact will have on consumer spending? Yeah, you know it. Huge. Of course they may pull another rabbit out of their hat but at $10 billion cost for each 30 days, its clear the extensions are numbered to say the least.</li>
</ul>
<p></p>
<p><a class="noborder" href="http://storage.ning.com/topology/rest/1.0/file/get/1289977?profile=original" target="_blank"><font size="2"><img style="WIDTH: 117px; FLOAT: left; HEIGHT: 137px" alt="" src="http://storage.ning.com/topology/rest/1.0/file/get/1289977?profile=RESIZE_180x180" width="162" height="160"></font></a><font size="2">It all adds up to a lot of uncertainty and why I believe we're going to see further profit taking in the days or weeks to come. For the record I don't believe we're going to revisit the lows at this point [sorry Mr. Prechter] but certainly wouldn't rule out that possibility if something were to change with the stability of the Euro, USD or GBP. That would be a game changer in my mind, certainly.</font></p>
<p></p>
<p><font size="2">So are all sectors going to pullback? Well possibly not. According to Spectrum,</font> <a href="http://spectrumcommodities.com/education/commodity/charts/cl.html"><font size="2">crude oil catches a bid in May/June</font></a> <font size="2">due to anticipated Summer driving demand and Gld, while it tends to have</font> <a href="http://spectrumcommodities.com/education/commodity/charts/gc.html"><font size="2">some strength in May</font></a> <font size="2">due to the impending June wedding season, it may see even more buying interest due to global economic concerns. Then there are utilities which have undperformed and even the Healthcare sector which has undergone a correction as well.</font></p>
<p></p>
<p><font size="2">Other options might be to take a portion of your profits and invest into short term bond funds, Corporate bond funds and inflation-protected funds. Vanguard offers a number of these with as little as $3000 and all you have to do is perform a search on your brokers site.</font></p>
<p></p>
<p><font size="2">Lastly there are inverse ETFs, many of which have decay issues so be careful if you're not daytrading but I personally will be ringing the register on my profitable positions on any green [up] day this week.</font></p></div>