Blue Skies

Another day, more blue skies for the major stock market indices. The pain for the bears has to be strong and growing, but I have yet to see evidence that they are throwing in the towel en mass. And price action has done absolutely wrong to suggest anything more than a trading pullback.

As I mentioned the other day, I think it pays to be a little more vigilant here, not that I think we are going to see a full fledged correction or the need to make outright sales to raise cash. Sentiment has grown a little complacent and stocks are at all-time highs, sometimes an ingredient for a quick pullback. However, the plan remains the same. Until proven otherwise, pullbacks are buying opportunities.

The longer the market can go without giving up significant gains, the more likely the resolution will be sharply higher. As a bull, it would be great to see some sideways action for a week or so and then another blast higher to really squeeze the bears. Ultimately, I still believe that stocks will experience a major blow off to the upside before the bull market ends, however, it doesn’t look like that’s right here.

Sector leadership continues to rotate in an intermediate-term positive fashion with REITs, utilities and staples all ceding to consumer discretionary, semis, biotech.

Gearing up to visit Jeff Macke and the good folks at Yahoo Finance tomorrow and then see my old friend Melissa Francis at Fox Business on her show MONEY.

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BOOM! Now High Yield is Key

What a great day in the city on Wednesday! I knew I was okay when Metro North actually ran on time to start the day. I did two segments with the good folks at Yahoo Finance, one discussing the most overused word in investing, “bubble”, and the other on the current state of the bull market. As they are posted I will share the links.

I headed to the floor of the NYSE in the afternoon for a quick stint with Bill Griffeth on Closing Bell. Since the 1980s in the FNN days, I have always been a big fan of Bill’s and I really enjoy chatting with him. The floor was crazy busy and I could hardly move around. It wasn’t, however, from floor traders and professionals doing business. There all kinds of groups visiting and moving around.

Finally, Fox Business’ Making Money with Charles Payne was my final stop and I got to spend a full hour on the show with the other guests. That was special and I will post the various links shortly.

Stocks had a huge day on Wednesday, in both directions. After Tuesday’s drubbing, the decline continued yesterday morning before firming into lunch to get back to unchanged. Then the Fed released their minutes and the market took off like a rocket ship. Frankly, stocks were so stretched to the downside to begin with and were already firming into the news. Yellen & Co. just threw gallons of gas on a tiny little fire and the inferno ensued.

At the end of the day the major indices gained back what they lost on Tuesday plus a little bit. I would have liked the internals to be a little stronger, but you can’t have everything.

The big question now is, “Was that THE bottom or A bottom?”

The jury is out at this time, but for sure, the bulls have the ball now. Let’s see where they are at 4pm today. Let’s watch leadership emerge.

High yield bonds funds, one of my most important canaries, all closed down yesterday which is the norm on a day when stocks  take off during the afternoon from a decline. I would be shocked if funds like PHYDX, NNHIX, MWHYX and JAHYX do not show gains when their prices are posted tonight. If these funds are not up at least .20% or more, that will be very worrisome for the intermediate-term.

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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!

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FOX Business TODAY at 1pm

I am going to be on FOX Business’ Markets Now today at 1pm est discussing the markets’ reaction to the weak employment data along with our forecast for the Dow to year-end. 

Stocks lost roughly 1% on Friday, but you would think the market collapsed from the media’s portrayal of the day.  Listening to Mitt Romney, it sounds like we lost jobs and are heading into the abyss.  President Obama on the other hand gave a campaign speech in Ohio where it took him 11 minutes to even mention jobs and then he only spoke about how well the administration has done in creating jobs.  I think most of know that the truth is somewhere in the middle.

There are four more employment reports until the election and I think they will all fall in the modest category, somewhere between 10,000 and 200,000 jobs created each month.  While that is jobs growth, it is tepid at best and doesn’t keep pace with population growth.  Looking over the history of post financial crisis recoveries, all of this falls within the realm of normalcy.  As I have mentioned before, it is usually after the next recession where we make significant progress on the employment front. 

The next Street$marts should be out by Wednesday.

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