Archives for November 2012

CNBC’s Squawk Box Wednesday @ 6:20am

I am going to be on CNBC’s Squawk Box on Wednesday (11/21) at 6:20am discussing the Fiscal Cliff, our forecast to year-end and the potential for recession. After that, I hope to have a Street$marts to you by the end of the day.

Just in case I don’t, I wish you and your family a very happy Thanksgiving!

Paul

Bulls Turn Tide

After Friday’s reversal from early losses on the “news” regarding the Fiscal Cliff, the bulls put on an ole fashioned stampede today with more than 90% of the volume on the upside and almost 90% of all stocks closing higher. The market opened up and ran that way straight to the close, turning the short-term trend in favor of the bulls.

For the time being, the bulls have the ball and given the Thanksgiving holiday, they are supposed to keep control until next week. When markets first snap back off of a potential low, the sectors and stocks which were hit the hardest usually bounce back the hardest initially. On the index front, that’s the tech laden Nasdaq 100 and small cap Russell 2000. Sector wise, it’s software, telecom, banks, energy, industrials and biotech.

What would worry me is if this rally failed right away and fell to new lows. That would be a bad sign. Longer-term, I do not believe the lows we saw on Friday will end up being THE bottom, but this rally should be decent enough to enjoy.

Bulls Draw Line in the Sand

It certainly took a while, but the bulls finally drew a line in the sand and defended their turf after a 9% pullback from the September peak. The day started out like many others during the decline with weakness to new lows. But after the “geniuses” in congress held a press conference and all agreed to compromise (Gee, what a word!), stocks lifted and ran higher into the close as monthly options expiration and short covering ahead of the weekend most likely helped the cause.

Keep an eye on everyone’s favorite or former favorite, Apple, as this stock has been hit with the ugly stick and will likely bounce hard when and if the overall market does.
Next week is a holiday shortened week that has a positive seasonal bias. I would look for the bulls to make some noise early.

Obama Victory, Market Sell Off

Congratulations to President Barack Obama and all of the politicians who were elected by the American people last night. In the end, although my candidate did not win, Democracy was and is always the big winner. As you know, I hardly ever use the word “hope” when discussing investing, but in this case, I do hope we somehow see congress and the president at least genuinely attempt to work together on a bipartisan basis. I don’t know a single person who wants four more years like the last two in DC.

I am going to be on FOX Business’ Markets Now at 1:30pm est today discussing the election results and its impact on the stock market and economy.

In yesterday’s Street$marts, (http://www.investfortomorrow.com/newsletter/CurrentStreet$marts20121106.pdf) I made the case that an Obama victory would see market upside and a Romney victory would see weakness. And that whatever the move was, it should continue into next week. So what’s going on today and why the sea of red in the stock market and the Dow now under 13,000?

Stocks traded higher on Monday and Tuesday. Some say it was Romney, while others say it was Obama. To me, it’s irrelevant. You can see that last night from 5pm to 10pm, the S&P 500 futures (an indicator of the overall stock market) traded lower as the results were announced. After Obama achieved 270 electoral votes for reelection, the S&P 500 futures turned around and headed higher until almost 6am. So when I woke up and saw the green, I thought the market would open to the upside.

That was until the European Central Bank’s Mario Draghi made negative comments about Germany’s economy weakening. From there, the futures fell sharply straight to the U.S. open at 9:30am and have continued lower ever since. Was Obama’s reelection the cause of today’s carnage or was it the ECB? In the grand scheme, it doesn’t really matter, but given the weakness in the financials and materials and relative strength in consumer discretionary stocks, it certainly looks like Europe is the bigger driver than the election.

stock market reaction to election

I would look for the weakness in stocks, on balance, to continue into next week before another attempt at a meaningful bottom begins for a year-end rally.

FOX Business at 1pm on Wednesday

I am scheduled to be on Fox Business’ Markets Now at 1pm on Wednesday discussing the election results and its affect on the markets.

***Special Election Update***

http://www.investfortomorrow.com/newsletter/CurrentStreet$marts20121106.pdf

 

Market Says Obama But…

Here is the latest Street$marts.

http://www.investfortomorrow.com/newsletter/CurrentStreet$marts20121102.pdf