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Post by marpro on Feb 11, 2023 23:07:14 GMT
Add in a weekly uptick in the VIX and it looks like a landing so soft that only a Butterfly would know it. I don't know if it is hard or soft, or even recession. Sure, I see resistance in everything I see, equity, CEFs, and BDCs. Downward trend from last week. It looks like profit taking last week. If there is conviction, the market would have built on the previous week's top. I do not see any conviction, only baby steps, one step forward, two steps backward.
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Post by uncleharley on Feb 12, 2023 17:54:23 GMT
Add in a weekly uptick in the VIX and it looks like a landing so soft that only a Butterfly would know it. I don't know if it is hard or soft, or even recession. Sure, I see resistance in everything I see, equity, CEFs, and BDCs. Downward trend from last week. It looks like profit taking last week. If there is conviction, the market would have built on the previous week's top. I do not see any conviction, only baby steps, one step forward, two steps backward. By soft landing I mean the stock market has had a soft landing. Now it seems to be consolidating with a bullish bias. The daily chart for the S&P indicates it could find support in the next 50 points down & turn back up. However I am not so sure about the economy. The yield curve, LEI, and the ISM index indicate a recession is on the way. My thought [which is subject to change] is that yes, we will have an economic recession, but it will be mild and of short duration.
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Post by Karen on Feb 15, 2023 12:17:10 GMT
FWIW, on the glass-half-empty side of the discussion, a case for a new bull market having been started was also made as recently as 08/12/22, with market breadth being part of the basis. www.outcomeprivatewealth.com/is-this-the-start-of-a-new-bull-marketAnd then the market made new lows in 10/22. What is, shall I say, different this time?
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Post by uncleharley on Feb 15, 2023 13:16:23 GMT
FWIW, on the glass-half-empty side of the discussion, a case for a new bull market having been started was also made as recently as 08/12/22, with market breadth being part of the basis. www.outcomeprivatewealth.com/is-this-the-start-of-a-new-bull-marketAnd then the market made new lows in 10/22. What is, shall I say, different this time? A difference this time is that the 50/200 dma was decidedly bearish in 8/12/22. Those moving averages made the proverbial Golden Cross in 2/23 signaling the beginning of a bull market. Another technical signal is the ongoing trend of an ever-widening spread between the OBV and the Accum/Dist tools that are at the bottom of the linked daily SPX chart. stockcharts.com/h-sc/ui?s=$SPX&p=D&b=3&g=0&id=p88027274387&a=412512122&listNum=86
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Post by archer on Feb 15, 2023 17:26:53 GMT
FWIW, on the glass-half-empty side of the discussion, a case for a new bull market having been started was also made as recently as 08/12/22, with market breadth being part of the basis. www.outcomeprivatewealth.com/is-this-the-start-of-a-new-bull-marketAnd then the market made new lows in 10/22. What is, shall I say, different this time? I think it is more a question of what was different LAST time, and could repeat in the future. The downturn in August 22 was the market's response to Powells Jackson Hole more pain ahead speech. If Powell sees inflation increasing we could have a repeat. If inflation doesn't increase or decrease, he will likely increase rates more aggressively than the market is pricing in, and the market will respond accordingly. If the above comes to pass, the technicals will change direction.
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Post by marpro on Feb 17, 2023 15:41:00 GMT
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Post by mnfish on Feb 17, 2023 20:30:46 GMT
Recent note from Wells Advisors -
The market has chosen to pick a fight with the Fed and downplay the deterioration in the economy and earnings. Investors have bid up the prices of stocks in the sectors that are sensitive to an economic upswing, such as Consumer Discretionary, Real Estate and Financials. 6 - 9 months for rate hikes to affect the economy so conceivably there are still a number of rate hikes that have yet to be felt Inflation is still far above the 2% target so the Fed still has work to do, which they have constantly and consistently reminded us We have chosen not to participate and look to the second half for brighter skies and better opportunities.
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Post by uncleharley on Feb 18, 2023 18:55:30 GMT
Fridays close gave us another confirmation that we are in a bull market. The S&P marked 20 consecutive days with closes above the 200 DMA. Since the S&P is a leading indicator of the economy, Economic numbers should be improved in the months to come.
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Post by archer on Feb 18, 2023 20:55:20 GMT
uncleharley, Glad to see you are still bullish. The past couple weeks have been concerning to me with rotation back into more defensive sectors. XLY did OK but the leaders of the past couple months declined in relation to SPY.
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Post by Deleted on Feb 18, 2023 21:56:02 GMT
"...expects the S&P 500 to slump to 3,800 points by March 8 — a decline of more than 7% from Thursday’s close — after the benchmark failed to break through a ceiling of 4,200 points." That is a very specific technical analysis based prediction. It will be interesting to monitor.
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Post by Deleted on Feb 18, 2023 22:11:56 GMT
I wonder of there is a correlation between people's long-term bullish or bearish perspective and their current thinking.
Certain people appear to post choices that favor bearish forecasts, and others bullish forecasts. Some may have "put their money where their thinking is" to appropriate a phrase. Which could impact their viewpoint too.
In this thread, it seems that Karen, marpro and mnfish are more bearish. And UH, myself and eddy seem more bullish. A few seem on the fence: Archer, Chahta, Bobfi, Fearchar.
Part of it may be the timing that people are anticipating, a month vs. EOY. Apologies, If I read anyone wrong.
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Post by Deleted on Feb 18, 2023 22:16:20 GMT
uncleharley , Glad to see you are still bullish. The past couple weeks have been concerning to me with rotation back into more defensive sectors. XLY did OK but the leaders of the past couple months declined in relation to SPY. I have noted that too, but it seems minimal. Growth is still handily outperforming value on the 1-month. About equal YTD. And value seems to have a big edge on the 3-month return. A bit confusing.
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Post by archer on Feb 18, 2023 22:24:36 GMT
I wonder of there is a correlation between people's long-term bullish or bearish perspective and their current thinking. Certain people appear to post choices that favor bearish forecasts, and others bullish forecasts. Some may have "put their money where their thinking is" to appropriate a phrase. Which could impact their viewpoint too. In this thread It seems that Karen, marpro and mnfish are more bearish. And UH, myself eddy and seem more bullish. A few seem on the fence: Archer, Chahta, Bobfi, Fearchar. Part of it may be the timing that people are anticipating, a month vs. EOY. Apologies, If I read anyone wrong. I don't really have a bull or bear long term forecast. I think 2023 will be a bit of both. I am invested bullishly though, thus my short term concern. I try to jump on trends and hope they last long enough to make some money before I lose it again. Sometimes it works sometimes not.
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Post by uncleharley on Feb 18, 2023 22:30:34 GMT
I wonder of there is a correlation between people's long-term bullish or bearish perspective and their current thinking. Certain people appear to post choices that favor bearish forecasts, and others bullish forecasts. Some may have "put their money where their thinking is" to appropriate a phrase. Which could impact their viewpoint too. In this thread It seems that Karen, marpro and mnfish are more bearish. And UH, myself eddy and seem more bullish. A few seem on the fence: Archer, Chahta, Bobfi, Fearchar. Part of it may be the timing that people are anticipating, a month vs. EOY. Apologies, If I read anyone wrong. I agree that we are all predisposed to some sort of bias on nearly everything. That is why I like to use charts and technical indicators relating to the stock market to direct my thoughts about the stock market. I find the report by BoA and their prognostications to be especially confusing. With all due respect for their expertise and resources I really believe that someone should point out to them that the stock market normally leads the economy making the use of economic indicators to forecast the stock market useless. This is especially true for a short term projection.
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Post by Deleted on Feb 18, 2023 22:32:43 GMT
I don't really have a bull or bear long term forecast. I think 2023 will be a bit of both. I am invested bullishly though, thus my short term concern. I try to jump on trends and hope they last long enough to make some money before I lose it again. Sometimes it works sometimes not. Sounds like our approaches, and current situations, are very alike.
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Post by anitya on Feb 19, 2023 7:58:14 GMT
As of Thursday, with 84% of companies reported, S&P 500 Q4 GAAP earnings are down 29% year-over-year, the 3rd straight quarter of negative YoY growth and the largest decline since Q2 2020. But the Operating Profit Margin of 10.9% is still above the 8.5% experienced over the past 22 years.
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Post by steadyeddy on Feb 19, 2023 13:32:18 GMT
BOA as we know is not one individual, and there are sell-side analysts and buy-side analysts with differing recommendations. We are closer to the rate hike cycle ending. So we are closer to the bottom in the stocks.
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Post by yogibearbull on Feb 19, 2023 13:44:30 GMT
Current Barron's is full of analogies from airplanes and sports and I don't even get some. But the one I likes was about soft- , hard- or no- landing. And there can be "turbulence" ahead (as in "fasten your seatbelts"). Then, there is this spin - no-landing just avoids landing for a while, and after the airplane skips landing for any reason, it goes around the airport a few time, and then eventually lands, soft or hard. Meaning is that no-landing is just a temporary condition and delays the inevitable x-landing down the road. Another point is that nothing much is going on in the market now and that makes time for all sorts of musings.
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Post by uncleharley on Feb 19, 2023 14:11:51 GMT
Another point is that nothing much is going on in the market now and that makes time for all sorts of musings. Your observation has saved me from crying on this beautiful sunday morning. I am remodeling my bathroom while I wait for the S&P 500 to work it's way thru some resistance and continue on with the Bull market that so many won't recognize. stockcharts.com/h-sc/ui?s=$SPX&p=W&b=3&g=0&id=p93931188158&a=524485138&listNum=86
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Post by retiredat48 on Feb 19, 2023 15:37:16 GMT
Someone posted..."we posters are all becoming economists."!
Yes, very astute. Yet there is only a modest if any link to the economics and the stock market. Even if one predicts and gets perfect that the future landing is "hard, or soft, or none", the market may move against your outlook as to the meaning of hard, soft or none.
Further as UH noted, the market looks out six months or more. Thus, when we get approaching December, the question will not be whether the fed will pivot and lower rates in Dec; but rather what will the fed be doing in six more months out.
I can make a case for an upward trending stock market for all three cases. Hard landing (requires two more quarters at least to have a recession definition of two down quarters), then LT bond rates go down, and market likes this for 6 months out. Soft landing, perhaps only one quarter of negative GDP, and this will mean a subsequent UP Quarter must have occurred...and markets going higher. Or no landing...inflation stays higher, no decline in GDP...market goes up also. And remember, a 5% inflation means companies are raising prices by 5%. So an up GDP of lets say 4% may simply be all price increases...yet is not negative. Ditto for earnings increases...and PE ratios.
Lastly, consider this. If inflation is from zero to 2% stable, and the fed funds rate is kept at 4-5% for the next two years, the markets have done quite well with this scenario in the past. I consider the fed should keep its rate at least at 3.5 to 4% for a couple years. But that does not keep me from investing.
To me, I pay attention to all this stuff; but in practice I do not make my investing actions and policy around this economics, for the stock market performance. I do for the bond market investing.
R48
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Post by retiredat48 on Feb 19, 2023 15:48:35 GMT
I wonder of there is a correlation between people's long-term bullish or bearish perspective and their current thinking. Certain people appear to post choices that favor bearish forecasts, and others bullish forecasts. Some may have "put their money where their thinking is" to appropriate a phrase. Which could impact their viewpoint too. In this thread, it seems that Karen, marpro and mnfish are more bearish. And UH, myself and eddy seem more bullish. A few seem on the fence: Archer, Chahta, Bobfi, Fearchar. Part of it may be the timing that people are anticipating, a month vs. EOY. Apologies, If I read anyone wrong. +1...IMO good post.I place a lot of weight in the market future direction based on "BEHAVIOR" measurements...such as degree of short selling; amount of money on sidelines; opinions as to direction of market, dollar flows into asset classes like stocks, etc. To summarize currently, we have an all time high in investor negativity...by many measurements. Everyone is convinced economic trouble lies ahead, and thus bad for the market. However, all these investors have acted...already sold to the degree they will. Trillions are sitting in money market funds. This money is finally earning a decent % return, thus is strong competition for stocks. So investors have no hurry to buy. However, the best cure for malaise is a rising stock market. Another 10% rise and the animal spirits get aroused. Money starts flowing back into the market. People talking at the water cooler how much they are making in the market. Standby for better market times. R48
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Post by uncleharley on Feb 19, 2023 16:16:01 GMT
I believe BEHAVIOR measurements can also be called sentiment indicators. As such, they usually become meaningful when they run to extremes such as now. And they are generally considered contrarian measure when they reach those extremes. As you point out, currently that would be bullish for the stock market.
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Post by Karen on Feb 19, 2023 16:20:03 GMT
I wonder of there is a correlation between people's long-term bullish or bearish perspective and their current thinking. Certain people appear to post choices that favor bearish forecasts, and others bullish forecasts. Some may have "put their money where their thinking is" to appropriate a phrase. Which could impact their viewpoint too. In this thread It seems that Karen, marpro and mnfish are more bearish. And UH, myself eddy and seem more bullish. A few seem on the fence: Archer, Chahta, Bobfi, Fearchar. Part of it may be the timing that people are anticipating, a month vs. EOY. Apologies, If I read anyone wrong. I agree that we are all predisposed to some sort of bias on nearly everything. That is why I like to use charts and technical indicators relating to the stock market to direct my thoughts about the stock market. I find the report by BoA and their prognostications to be especially confusing. With all due respect for their expertise and resources I really believe that someone should point out to them that the stock market normally leads the economy making the use of economic indicators to forecast the stock market useless. This is especially true for a short term projection. "That is why I like to use charts and technical indicators relating to the stock market to direct my thoughts about the stock market." uncleharley, you provide incredible analysis and insights on this forum and I trust all here greatly appreciate what you do. I am certainly one of them. That said, having done it as long as you have, and having been as successful as you have, I trust you know that T/A is as much art as it is science. Given that, I trust you also know that many other T/A's who do their work for a living are reading the current charts vastly differently than you. To wit...Many currently discern that we are NOT yet in a new bull market. Many discern that we will still see a significant move down to the 3,500 level (or below, but many have now taken a drop to 3,200 off the table) given that the 3,900 level is considered by them to be weak support. Many still hold that the most recent rally is yet another bear market rally juiced by short covering and retail FOMO participants. So their reading of the charts vastly differs from yours, and that is of course, the art part of T/A. If reading charts was purely scientific, something that lead to unanimous, infallible outcomes, this whole investing thing would be as easy as pie. But as we all too well know, it ain't.
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Post by newtecher on Feb 19, 2023 16:28:46 GMT
I believe BEHAVIOR measurements can also be called sentiment indicators. As such, they usually become meaningful when they run to extremes such as now. And they are generally considered contrarian measure when they reach those extremes. As you point out, currently that would be bullish for the stock market. Which sentiment indicators are at extreme lows right now? For example, YBB posts AAII survey results at ybbpersonalfinance.proboards.com/thread/141/aaii-sentiment-survey-weekly?page=9 CNN index is at www.cnn.com/markets/fear-and-greedBoth have moved up a lot since late October, when they were in fact at extreme lows. IMO, these sentiment surveys are just a reflection of the recent short term (~ 1 month) performance and contains no new information.
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Post by steadyeddy on Feb 19, 2023 16:46:53 GMT
Wall of worry... the good news is the Fed WILL PIVOT if fhit hits the san. The bad news is the Fed will keep nudging rates higher if consumer remains strong. Wildcards such as China, Russia and such could throw a monkey wrench.
I am neither bullish nor bearish.
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Post by richardsok on Feb 19, 2023 17:01:52 GMT
I wonder of there is a correlation between people's long-term bullish or bearish perspective and their current thinking. Certain people appear to post choices that favor bearish forecasts, and others bullish forecasts. Some may have "put their money where their thinking is" to appropriate a phrase. Which could impact their viewpoint too. In this thread, it seems that Karen, marpro and mnfish are more bearish. And UH, myself and eddy seem more bullish. A few seem on the fence: Archer, Chahta, Bobfi, Fearchar. Part of it may be the timing that people are anticipating, a month vs. EOY. Apologies, If I read anyone wrong. Respectfully, nobody, there's a third group -- some of us try not to express predictions at all. We have observations, not opinions. Even the most adroit market analysts express their outlooks at the peril of unknowable EVENTS. The farther out and more confident the prediction, the greater the risk. We are willing to be BRIEFLY on the wrong side of any big market movement and we readily accept losses -- so long as they are kept small. So to that end we try to be nimble enough to observe how the ground is shifting RIGHT NOW rather than stating what we believe we cannot reliably know. The tools we use are technical indicators consistently applied to the lowest beta trading assets we can find. I believe there's an unholy connection between personal vanity and confident market predictions. Color me suspicious. "…..the financial press isn’t in the business of supplying useful information; it’s in the business of feeding people’s lust for predictions. “You keep buying the magazine regardless of how the forecasts turn out,” Wellington says, “and they’ll keep supplying the forecasts.” --Evolution of an Investor (lfadvisors.com)
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Post by fishingrod on Feb 19, 2023 17:33:02 GMT
Speaking for myself. I am just riding the wave on top of it, going where it takes me. When I try to predict, I find I am only playing a guessing game.
Like I told another poster, " I am not using my ouija board any more. It doesn't work very well. I am using my crystal ball. No, wait, That is my bowling ball!"
Fishingrod
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Post by uncleharley on Feb 19, 2023 18:32:51 GMT
I believe BEHAVIOR measurements can also be called sentiment indicators. As such, they usually become meaningful when they run to extremes such as now. And they are generally considered contrarian measure when they reach those extremes. As you point out, currently that would be bullish for the stock market. Which sentiment indicators are at extreme lows right now? For example, YBB posts AAII survey results at ybbpersonalfinance.proboards.com/thread/141/aaii-sentiment-survey-weekly?page=9 CNN index is at www.cnn.com/markets/fear-and-greedBoth have moved up a lot since late October, when they were in fact at extreme lows. IMO, these sentiment surveys are just a reflection of the recent short term (~ 1 month) performance and contains no new information. I believe R 48 mentions a number of the indicators we were talking about.
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Post by newtecher on Feb 19, 2023 18:41:37 GMT
I believe R 48 mentions a number of the indicators we were talking about. Reread R48's posts and the only specific thing I could find is "Trillions are sitting in money market funds". Well, sure, but is it more than before and if so by how much? I doubt short-term debt market overall is significantly larger than before but retail investors probably own more in money market funds because it actually pays more than a bank account now. Could you or R48 be more specific? Otherwise, it seems to be based on you feelings about other people's feelings.
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Post by anitya on Feb 19, 2023 19:25:59 GMT
Loads of Econ data next week, incl PMI, housing, oil and gas inventories, core PCE / personal spending, etc. FOMC meeting minutes on Wed. Final Feb U Mich sentiment on Friday.
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