All of the major stock market indices saw more all time highs but this time it looked like a serious bull rush with the market opening flatish and pushing higher and higher all day. Some of the “old” defensive leaders came back to life like healthcare, consumer staples and utilities. This market is beginning to feel like a melt up which usually sees even more vertical gains, but which also ends in ruins. In my 2013 forecast, I called for a front loaded year with the gains early and I am not wavering from that. 1987 has been stuck in my mind since late last year and this is how it felt back then.
A new Street$marts has been posted!
Here is a spirited debate I did on CNBC regarding dividends, not the panacea most investors think!
I am going to be on Fox Business’ Markets Now at 1pm today discussing the abysmal jobs report on Friday, the stock market’s rather muted reaction and what lies ahead this quarter.
There are a few scenarios which can play out from here and I will lay them out in detail this week in Street$marts, which I hope to work on in a few days. In short, my upside max of Dow 15,000 and downside of 13,700 remain the same. If you are or want to be bullish, the better and healthier path is sideways or down first and then an explosion to the upside later this quarter or over the summer.
I am going to be on CNBC’s Closing Bell today, March 26, at 3pm discussing the S&P 500′s continued assault on all time highs as well as the latest nonsense out of Cyprus, a country with the economic output of Vermont!
As you know, we have been very bullish on stocks since mid November, especially through the overhyped fiscal cliff and sequester embarrassments. Sadly, looking at Washington’s fiscal calendar, we have many more “urgent” deadlines in 2013. Yippee! That means the media will force feed us with congressmen from both sides who just keep talking but say nothing, not to mention what comes out of the administration!!
In any case, we have greatly tempered our enthusiasm for the stock market since last week and believe it’s now appropriate to protect and/or hedge the nice profits. That certainly does not mean that stocks must go down right here or at all, but we do see the risk/reward ratio as no longer in our favor.
Looking at the Dow, 15,100 seems like a good ceiling while 13,700 looks like a floor. I am concerned that Wall Street strategists are literally falling over themselves to be the most bullish, raising their price targets every week. The emerging markets complex (think China, Russia, Brazil, etc.) is down on the year and behaving poorly. The semiconductors, leaders in the tech sector, act heavy and want to drop more. High yield bonds have gone from leader to laggard.
On the flip side, I still see some bright spots like the Fed printing $85B a month, banks trading very well and the number of stocks going up and down on the New York Stock Exchange continuing to hit all time highs. And that’s why I am not becoming more negative over the intermediate and long-term, at least not yet.
Stocks are due for a rest between here, 14,600, and 15,100. Should it come, I will assess the pullback for any damage done and report back. This should not be the final nail in the bull market’s coffin.
Happy Passover and Easter to those celebrating!
Thank you Mother Nature for delivering another 2 feet of snow to Vermont last week! Some of us appreciate your fine work!!
Over the next two weeks, I will be visiting the Boston area as well as the east coast of Florida. Please let me know if you would like to grab coffee or an adult beverage!
I am going to be on Fox Business’ Markets Now today at 1pm discussing the rally in stocks, what the heck is going on in Cyprus, a little bonds and what to do with new money waiting to be invested.
Sunday night saw potentially huge losses for stocks on Monday, and although the market still opened much lower, it wasn’t as bad as forecasted and by the end of the day, it was essentially nothing. This institutional buying is a powerful force and tough to stand in front of, but when it gets exhausted, there should be an air pocket under stocks.
Here is my Fox Business interview and my take on how to invest right now.