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Status Quo Redux…

by - May 20th, 2013 8:49 am

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

Again, not much to add to this market in terms of analysis – nothing matters other than central banks.  Last Wednesday/Thursday there were some 9 economic reports, 7 of which were disappointing or could be considered as such and all it got was one rare day down, and then new highs Friday.  Markets are up 10 of the past 12 sessions and 17 of 21.   Friday’s move to 1666 was an exact 1000 point rally from March 2009′s 666 bottom.  Since this most recent leg of the move has been medium fast rather than a huge spike ala 1999, things are not necessarily overbought on the daily chart but we are seeing extremely rare action on the monthly and weekly chart, due to a lack of any correction this year.   Aside from being above the monthly upper bollinger band the S&P 500 is some 12.5%+ over its 200 day moving average; over 10% is rare.  The DJIA has been up 18 Tuesdays in a row.  Etc etc.

It is a quiet week economically – a few housing reports and such but again last week the market ignored all the bad economic news and two mildly positive reports Friday were celebrated.  It’s that sort of market.  All that matters are central banks and on that end Bernanke visits Congress Wednesday at 10 AM – with the FOMC minutes of the last meeting that afternoon.  The normal clucking about tapering begins and that is about the only thing the market sees as a reason to selloff for nowadays.  Of course the FOMC just added language at the last meeting about “reducing OR increasing” bond purchases so the taper talk is ironic.  Expect hours of analysis about nothing ahead of Bernanke.

In terms of sector rotation last week was all about financials…

… but over the past month all the ‘right’ groups have taken charge, along with small caps regaining strength.  (to remind “cyclicals on he far left = consumer discretionary/retail).  Not much to poke holes at in this market about other than any lack of pullback and weekly/monthly overbought conditions and seemingly no reaction to any news for more than an hour before a resumption of the melt up.

Not much more else can be said about this market.

Disclosure Notice

…
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SPX Reaching Historical Extremes on Weekly/Monthly Chart

by - May 15th, 2013 1:09 pm

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

We are starting to see some very extreme readings on our monthly and weekly index charts since there has been no correction this year.  I posted below first the monthly chart of the S&P 500 going back 15 years showing bollinger bands – rarely do we get above the upper one, and never have we been this far above.  Then below that I posted (with 4 charts of 4 years each) the weekly data and you can see we are at a rare time we are above the weekly bollinger band as well.  This non stop rally is getting very historical.

Monthly – we’ve never been this far above the upper bollinger band in the S&P 500 and that includes the 1999 stock market bubble (which more more NASDAQ focused of course!)  Only thing similar is 2006-2007 where there were a few months we skimmed just over the upper bollinger but nothing to the current degree in May 2013.

Weekly – this level of extreme does happen every few years but rare.

Mid 2009 – Mid 2013

Mid 2005 – Mid 2009

Mid 2001 – Mid 2005

Mid 1997 – Mid 2001

 

For reference I did a 15 year monthly chart for Japan’s Nikkei which is in its own universe right now – so yes it can get more crazy I suppose.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog



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Status Quo…Again

by - May 13th, 2013 8:39 am

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

Very little change from last week.  Whatever the news it is good news for the market – the economy is not strong enough to stop QE, but not weak enough to worry anyone.  We are in this perpetual 1-2% type of GDP, with job growth just above population growth each month and little inflationary pressure in figures the Fed cares about.  It remains all about central banks – the twin powers of Japan and U.S. continue to plow ahead unabated (with the yen decimated even further last week).  Last week a bevy of central banks joined in easing – Australia, South Korea, Poland, among a few others; again just last week alone.  This morning Israel joined the party; it has essentially been a bank a day this past week.   There really is no other discussion than the global action by central banks; it dominates everything in these markets.   Late Friday, the Fed talking head at the WSJ, Hilsenrath, wrote a story about a “plan for a plan” (Fed Talks Exit blah blah) to slow down easing in the future but it has nothing to do with anything in the near future.  An exit of any proportion is so far in the future considering the QE lever will now be used rather than interest rates – i.e. rather than $85B a month it might be $65B or $50B but then in the next recession heck it could jump to $110B)

Not much “analysis” really means anything anymore – we have all sorts of records being bested or matched;  the longest streak to begin a year without a 5% correction in many years; the longest streak without 3 consecutive down days in the DJIA since 1958, margin debt back at records, etc etc.   Hedge fund manager Doug Kass gave his mea culpa last week, noted economist Nouriel Roubini threw in the towel saying go long for another 2 years before it all bursts and so on and so forth.  No one wants to fight the central bankers.  There has been very little in terms of earnings growth, it is all about PE multiple expansion – just in the first 5 months alone the forward looking P/E has risen by 1.5.  Markets that go up on P/E rather than earnings are impossible…
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Status Quo

by - May 6th, 2013 8:36 am

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

Friday was pretty typical of the year – when a key technical level was needed to be broken it happened in premarket.  There were 3 economic data points, 2 (including ISM Non Manufacturing) missed, but all that mattered was the employment report.  More broadly speaking with 5-6 weeks of weakening economic data all the market really did was go sideways in a wide range.  And that ended Friday with the break out of the S&P 500; even the lagging Russell 2000 joined in.

At this point there just appears no reason to do analysis anymore – the central banker liquidity seems to have bid up nearly every market and whatever the news it only matters for hours or at most days until the next wave of buying comes in.   We saw a bunch of high volume distribution days over the past month; that used to matter – but no more.  Breaks of technical support – doesn’t matter.  At this point it has to be put on the table that a 1999 scenario awaits, although not so concentrated in one index (NASDAQ) as 1999 was.  Everything high end is soaring  - art, collectibles, farmland, equities, bonds.  So this worldwide QE seems to be inflating anything ex gold and some commodities which are still Chinese dependent; considering what is being done globally makes Greenspan’s 1998 (LTCM bailout) and 1999 (Y2K prevention) actions seem like a pittance it appears Tepper has had it right all along.   Already 2013 is the first year in 17 without a 5% correction in the first four months, and the DJIA has not had a 3 day losing streak this year – the longest streak to begin a year since 1958… so we now just sit and watch to see what other records break.  Economic data quiets down this week after a heavy dose last week, but again – it appears moot anyways.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog



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New Highs on Good Employment Report

by - May 3rd, 2013 8:47 am

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

One of the genuinely decent economic reports of the past 6 weeks this morning as April’s data beat expectations AND prior months had significant revisions up.  The participation rate was flat (at very low rates) but the unemployment rate did tick down.  Average workweek ticking down 0.2 is the major wart today but most only read the headlines and don’t worry about details so just a wart for economists not the market.  Anyhow we have breached to new highs and a resistance top that has been here for two weeks on the S&P 500 in the premarket, and will be back to overbought in the near term assuming the premorning pop holds.  It is good to see this data point is diverging from a lot of the others which has weakened considerably – hopefully not something that gets revised down in future months.  ISM Services at 10.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog



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180 Degree Reversal from Yesterday

by - May 2nd, 2013 11:54 am

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

The S&P 500 is bouncing well off that new/old support which had held since November (see previous post), with the exception of the one break middle of last month.  This is positive in the fact it reinforces it as a useful line to follow.   Markets were in decent form this morning but then a news report that some ECB members were wanting “bolder” measures created a new leg up – essentially it’s all about central bankers right now and until that changes it is status quo.  Yesterday’s bad economic data is already an afterthought.  Tomorrow we have employment and ISM Non manufacturing – the weekly claims figures have actually improved quite nicely so it is a bit of a surprise that the monthly data has not done better.

But corporate profits are based on lean corporations with productive work bases – not hiring a slew of workers…especially as revenue growth is a major struggle.  So what is good for Wall Street isn’t necessarily going to be seen in an employment report.

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog



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In a Quaint Move, the ECB Cuts Rates

by - May 2nd, 2013 8:02 am

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

You remember rate cuts right?  Aww, the good ole days of central banking.

This was as the market demanded expected.

The S&P fell to a key area yesterday, one that has been the main support (with one break) the entire rally.  Bulls will want to see this level re-established as useful.

 

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog



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Very Rough Day for Small Caps

by - May 1st, 2013 3:28 pm

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

The Russell 2000 is really taking it on the chin today with a bearish engulfing bar that has erased the last 5 sessions completely.  While we came in to the day overbought short term it is not an easy market when you can erase a week worth’s of gains in 1 session.  This has been the pattern of April – quick moves down followed by the V shapes up.    Unlike the DJIA, S&P and now NASDAQ we did not see a yearly high on the small cap index.

 

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog



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Fed Adds Word “Increase” to Statement

by - May 1st, 2013 2:06 pm

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

I mentioned two weeks ago a black swan for the fall is the Fed INCREASING QE – rather than the popular thought it will be tapering.  Today’s FOMC statement for the first time included the word “increase (or reduce)” asset purchases.  And so the groundwork begins…

“prepared to increase or reduce” level of asset purchase program,

Disclosure Notice

Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog



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ISM Manufacturing Slight Miss but Barely Expansionary at 50.7

by - May 1st, 2013 10:08 am

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

While this is a slight miss the bigger picture here is 50 is the dividing line between expansion and contraction.  Yesterday we had Chicago PMI that was contractionary – the worst reading since late 2009 in fact.  Today we have an expansionary U.S. ISM but just.    New orders are the only decent bright spot in a relative sense – employment stunk and prices are ‘deflating’ (good for the Fed I guess)  The market is up 7 out of 8 sessions so this could be a good excuse for some consolidation but the economic data has really slowed the past 6 weeks.

Full report here.

“The PMI™ registered 50.7 percent, a decrease of 0.6 percentage point from March’s reading of 51.3 percent, indicating expansion in manufacturing for the fifth consecutive month, but at the lowest rate of the year. The New Orders Index increased in April by 0.9 percentage point to 52.3 percent, and the Production Index increased by 1.3 percentage points to 53.5 percent. The Employment Index registered 50.2 percent, a decrease of 4 percentage points compared to March’s reading of 54.2 percent. The Prices Index registered 50 percent, decreasing 4.5 percentage points from March, indicating that overall raw materials prices remained unchanged from last month. Comments from the panel indicate a range of strong/steady growth, to flat/declining volumes, depending upon the particular industry.”

WHAT RESPONDENTS ARE SAYING …
  • “Business can be described as flat at best.” (Food, Beverage & Tobacco Products)
  • “Production is still strong; several new projects to support alternative energy.” (Primary Metals)
  • “Slight uptick in business, but overall continuing slowdown in defense due to budget/sequester.” (Computer & Electronic Products)
  • “We have concerns about safety of doing business in South Korea. Our largest customer and part owner is in South Korea.” (Electrical Equipment, Appliances & Components)
  • “Automotive demand remains firm.” (Fabricated Metal Products)
  • “Business continues at a steady pace.” (Machinery)
  • “General business conditions and industrial markets remain strong.” (Transportation Equipment)
  • “Seasonal pick-up underway in the office furniture industry.” (Furniture & Related Products)
  • “Market has slowed this month — weather in some parts of the country, also customers built inventory in anticipation of building increase, but the economy is still slow to pick up this spring.” (Wood Products)
  • “Overall, volume is steady or slightly declining. Q1 sales volume is lower

…
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Insider Scoop

Long Setup in Herbalife Still Attractive; Stock Breaks Out as New Auditor Hired

May 22nd, 2013 12:00 am

Courtesy of Benzinga.

Few stocks have attracted more news over the last six months than nutritional supplement maker Herbalife (NYSE: HLF).

Even casual market observers are aware of the circumstances surrounding the the initial bout of extreme volatility in the name back in December 2012. The shares went into free-fall at the end of the year after hedge fund manager Bill Ackman revealed in typical sanctimonious fashion that his firm Pershing Square Capital Management was short around $1 billion worth of the stock.

Amid much pomp and circumstance, Ackman laid out his short thesis at a New York investment conference and...



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Zero Hedge

Diablo 3: A Case Of Virtual Hyperinflation

May 21st, 2013 10:34 pm

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

Submitted by Peter C. Earle via the Ludwig von Mises Institute,

As virtual fantasy worlds go, Blizzard Entertainment’s Diablo 3 is particularly foreboding. In this multiplayer online game played by millions, witch doctors, demon hunters, and other character types duke it out in a war between angels and demons in a dark world called Sanctuary. The world is reminiscent of Judeo-Christian notions of hell: fire and brimstone, with the added fantasy elements of supernatural combat waged with magic and divine weaponry. And within a fairly straightforward gaming framework, virtual “gold” is used as c...



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Pre-Earnings Bullish Bets On Saks Pay Off As Retailer Rallies

May 21st, 2013 9:46 pm

 

Today’s tickers: SKS, HLF & ABFS

SKS - Saks, Inc. – High-end retailer, Saks, Inc., popped up on our ‘hot by options volume’ market scanner this morning on heavier than usual trading traffic in upside calls. Shares in Saks are up 10% on Tuesday morning at a new 52-week high of $13.54 after the company posted first-quarter earnings in line with analyst expectations on higher-than-expected quarterly revenue. Shares in Saks are up more than 30% since this time last year. Bullish positions initiated in SKS options ahead of the earnings release yester...



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Chart School

S&P 500 Snapshot: Fractional Gain to a New High

May 21st, 2013 6:35 pm

Courtesy of Doug Short.

Another day of no economic data left the markets looking for cues. The Nikkei closed with a fractional gain of 0.13%, and the EURO STOXX 50 slipped a fractional 0.10%. So today's focus was on couple of the more dovish Fed presidents, Bullard and Dudley. For an interesting visual of the Fed Presidents on the Dove-Hawk scale, see this graphic from Thomson Reuters. Bullard's presentation is available here. Dudley's speech is available here. But of course it's Bernanke's testimony to Congress tomorrow that will be the main event for Fed watchers. The S&P 500 traded in ...



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All About Trends

Mid-Day Update

May 21st, 2013 1:40 pm

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Sabrient

What the Market Wants: No Easy Answer

May 20th, 2013 7:39 pm

Courtesy of David Brown, Sabrient Systems and Gradient Analytics

So, what did the market want today?  Nothing it appears.  It traded on weak volume and had very little movement.  This morning the market hated commodities especially silver, but by days end, the market liked silver, gold and even oil but not the dollar.  Why?

Last week the economic reports were tough, with bad misses on more than one occasion.  But the market tended to ignore the bad news, probably because money continues to pour into equities from money market funds, long term fixed income, and many struggling foreign economies.  On Thursday, investors finally caved to even more bad news from Initial Jobless Claims and weak Housing Starts.  Then on Friday, when Michigan Sentiment and Leading Indicators posted large positive surprises, the money came pouring back to generate qui...



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Market Montage

Status Quo Redux…

May 20th, 2013 8:49 am

Submitted by Mark Hanna

Courtesy of MarketMontage. View original post here.

Again, not much to add to this market in terms of analysis – nothing matters other than central banks.  Last Wednesday/Thursday there were some 9 economic reports, 7 of which were disappointing or could be considered as such and all it got was one rare day down, and then new highs Friday.  Markets are up 10 of the past 12 sessions and 17 of 21.   Friday's move to 1666 was an exact 1000 point rally from March 2009's 666 bottom.  Since this most recent leg of the move has been medium fast rather than a huge spike ala 1999, things are not necessarily overbought on the daily chart but we are seeing extremely rare action on the ...



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OpTrader

Swing trading portfolio - week of May 20th, 2013

May 19th, 2013 11:38 pm

Reminder: OpTrader is available to chat with Members, comments are found below each post.

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here

Optrader 

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Stock World Weekly

May 19th, 2013 1:09 am

NEW: Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

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The IRA portfolio

May 15th, 2013 7:35 pm

Reminder: Craigzooka is available to chat with Members regarding his virtual portfolio performance, comments are found below each post.

By Craigzooka

I am going to share with you how I manage my IRA and the power of reducing your cost basis.  My goal each year is a 20% return in my IRA.  Sometimes I make it and sometimes I don't, but I believe that all of my success is due to reducing my cost basis.  To illustrate the power of reducing your cost basis here are some trades we did last year.  These trades are taken from an educational portfolio we ran in a paper-trading account for a little more than a year.

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ETF Selector

Stock Market Gets Big News After Friday’s Close

May 12th, 2013 7:23 am

Courtesy of John Nyaradi.

Stock market posts another record setting week, but the big news came after Friday’s close.

Courtesy of NASA

The stock market put on another record setting show with the Dow Jones Industrial Average (NYSEARCA:DIA) closing at a record high 15,118 and the S&P 500 (NYSEARCA:SPY) closing at 1633.70, another all time closing high.

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Give Them an Inch, They Will Take a Mile

January 21st, 2013 8:09 pm

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Well, well, well....it is good to know that there are others in the scientific arena who believed that YMI Bioscience's data (cough - Gilead) is a better drug than Incyte's Jakafi.  Now, the definitive data are still unknown, but there was enough evidence from a Phase 2 trial to take a small risk for a huge reward.  So, let's forget about Apple (AAPL), and do nothing but biotechs from now until Congress passes universal health care coverage for prescriptions....and drive the prices down so that research and development is no longer feasible to conduct in the US. Even Seattle Genetics (SGEN) has been on a tear as of late...



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