Archives for May 2013

Why Bernanke Can’t Be Fully Transparent

After being interviewed by Melissa Francis for so many years both at Fox Business and CNBC, it was great to finally meet her in person on set. She definitely does not lob softball questions! Here is the segment from the other day.

http://video.foxbusiness.com/v/2404884981001/why-bernanke-cant-be-fully-transparent/ 

Action in the stock market on Thursday and Friday was positive enough to indicate at least one more run to all time highs sooner than later. It was be interesting to what leads and lags if that rally materializes.

 

Bond Market Sending Warning Sign

Tuesday’s stock market rally looked better in the media than in reality. Early strength was sold and there was not much conviction from the buyers. Unless we see the bulls step up and close above Tuesday’s high, stocks look like they need a pause or pullback here. Closing below Dow 15,175 should set off even more selling while closing above 15,550 should entice more buyers back in.
 
I am concerned here that high yield bonds have taken it on the chin and even investment grade has softened. This was also seen last quarter without any consequences, but the more interest rate sensitive sectors like utilities, REITs and telecom are also under serious pressure. Might this be the first significant crack since the rally began in November?

Gold Skeptics Have Peaked but Gold Prices Haven’t

The other day I spent some time with my friends at Yahoo Finance recording several segments. Here is the one I did on why I have become more bullish on gold recently after watching the metal fall from $1900 to $1320.

http://finance.yahoo.com/blogs/breakout/gold-skeptics-peaked-gold-prices-haven-t-paul-155320270.html

Big Ben Pours Cold Water on Bulls

The stock market saw a very dramatic and emotional reversal today as fresh all time highs were seen in the morning followed by a vicious selling wave from the highs until 3:30. The hardest hit sectors all focused on dividends that would become less attractive if interest rates rose. Utilities, telecom, REITs and financials. Pundits were quick to compare today’s action to that seen at THE peak in 2007 and 2000, but I believe that is misplaced. While the price behavior may look similar for this one day, little else resembles 2007 and 2000.

At bull peaks like 2007 and 2000, we typically see the New York Stock Exchange Advance/Decline line diverge with price along with high yield bonds. Neither was seen. The same can be said of the Dow Jones Industrials and Transports. Additionally, we have almost no meaningful sector leadership warnings. I suppose there is a first for everything, but this would set a precedent for bull market peaks and I am not ready to drink that Kool-Aid yet although stocks could certainly fall 3-6% very easily here.

Fox Business and Yahoo Finance

I head to New York in the morning (Thursday) to spend some time with my friends at Yahoo Finance. As usual, you can expect another controversial segment or two from my interview with Jeff Mackey. Yahoo Finance was the first media outlet I began to warn about Apple’s stock price heading for a 50%+ decline and that long-term forecast remains the same. However, something may be changing over the short-term…

Besides visiting Yahoo and meeting with clients, I am also scheduled to be on set with the folks at Fox Business at 1:30pm. Usually, I do my interviews from a studio in CT, but this is the first time I will be live in studio and I am really looking forward to it!

Stocks Surge Higher With Authority

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.

With Trepidation, Onwards and Upwards

Here is the segment from this morning’s (May 8) Squawk Box with a really good discussion on the stock market, economy, employment numbers and the Fed. http://video.cnbc.com/gallery/?video=3000166972&play=1

Many of the small cracks I saw in the markets a month ago have repaired themselves with sideways action instead an outright correction. The canaries of liquidity, high yield bonds, small cap stocks and the New York Stock Exchange advance/decline line are all seeing all time highs. The Dow Jones Transportation Index has played catch up with the Dow Jones Industrials and both are now in gear to the upside at all time highs. We have seen some positive sector rotation since last Friday that has fueled this recent rally. And even gold is popping higher.

Squawk Box at 6:30am

I am going to be on CNBC’s Squawk Box at 6:30am on Wednesday discussing the market’s recent surge to new highs along with some areas of concern and which sectors may be poised for more gains. And no, I do not believe the bear market in Apple is over. It recently hit my second downside target at $400 and is bouncing as it should. More weakness should await the one time darling on it way to $300.