The Trend Is Your Friend... Until The Trend Ends
May 13, 2026
As Thomas Lee has so eloquently stated throughout this year, “This is one of the most hated V-shaped recoveries the equity markets have ever seen.” Turmoil (according to the media) virtually everywhere you turn. Pick your poison, the Iran conflict, the Ukraine / Russia conflict, Maduro in Venezuela, Greenland, Tariffs, should I stop now! In the end, this is classic media doing everything in their power to keep everyone on edge continuously. This week it is the drum roll up to the meeting between President Trump and China’s Xi.
Why the “Sell in May” Rule May Fail Again This Year
May 5, 2026
April came and went, and the war raged on. The month was sort of a blur with tax-day right in the middle of the month and very negative sentiment concerning the conflict and the world stock markets teetering on media induced shocks. All of this seems to loom large and make things incredibly difficult to decipher as one needs to separate the goings on in the world from what the equity markets are saying.
One Of The Most Hated V-Shaped Recoveries Underway
April 28, 2026
On April 1rst, Ned Davis Research (NDR) research printed a report on the extreme pessimism on several US Equity market sentiment fronts. Subsequent to this the markets took off. Now, it should be no shock at all that markets tend to bottom when sentiment is the worst, just like markets tend to top when the froth or sentiment is the highest at market high points.
A Record 13-Day Surge in Stocks: Should Investors Stay In or Step Back?
April 21, 2026
We went from the end of a civilization to a two-week ceasefire, to a huge risk rally, an inflation jump, to failed peace talks, to a blockade and oil back over $100 and an Orban defeat. Lots to choose from. What should matter to you from last week or this week? The stock market as measured by the S&P 500 Index began the month of April right back where it was in late July of last year.
Markets Rally on Ceasefire News—Now Facing a Make-or-Break Moment
April 15, 2026
Last week I made mention that after the first 12 weeks of 2026 had passed that only 3 of these weeks were positive for the US stock market. No sooner did I make this observation that the markets then did an about face and began to retrace the decline. Not only did the markets retrace the decline, but they bounced, almost exactly as they did last year after the Tariff Tussle.
Is it Really All About the War?
April 7, 2026
In the first 12 weeks of 2026, the equity markets as measured by the S&P 500 were only up 3 of those weeks. Is this a function of the war? Is it a function of the polarization in the political aisles? Is it a function of President Trump’s style? Or is it the fact that the media is completely controlled by the liberal platform and no matter what the real reason is for the conflict, nothing is going to be said positive given that it is under the current president?
News-Driven Stock Market Selloff: Why This Pullback Mirrors Past Corrections
April 1, 2026
The past is the best roadmap we have for navigating what is in front of us. No situation is ever truly identical to the ones that preceded it, but the recent pullback in the stock market brings to mind some parallels to both the COVID Crash and "Tariff Tussle" sell-offs.
War, Oil, and Recession: Not The Smorgasbord I Was Looking For
March 25, 2026
It was another poor week for stocks, as the Iran conflict rages on and oil prices refuse to fall. The market has reached a "make or break" moment where it's either going to stage a bounce this week or else we could be in for a larger setback.
Putting This Market Pullback Into Perspective and What To Do Next
March 18, 2026
Weekly I try and put together a set of salient facts that I feel are important to be considering so as to be as confident as possible that a portfolio is properly allocated for the purposes of the investor. The facts that I feel are relevant this week are broken down into a number of different areas. At different times each will be more important than another, but all of them I believe are somewhat instrumental in the current investment climate.
What Everyone’s Getting Wrong About Oil, Inflation, and AI’s Future
March 11, 2026
In today’s note, I want to give a bit more color to the war effort and what effect it seems to be having and then go into more detail on AI. At the end I will finish with some final thoughts as they pertain to what we are experiencing and what could be expected moving forward.
How Could an Investor Approach the Markets In The Midst of Operation Epic Fury?
March 6, 2026
In the wake of the U.S. and Israeli bombing of Iran, investors understandably wanted to know the immediate ramifications. So, I decided to take a step back to look at potential broader implications for the U.S. stock market. The bottom line is that barring a prolonged disruption of global oil supplies, the conflict is unlikely to end the 3.5-year cyclical bull market (I am referring to the one that really began after the end of rate hikes by the Fed in October of 2022) by itself. Instead, we added to the list of risks the market is facing heading into the middle of midterm years.
Everyone Has a Plan ‘Till They Get Punched in the Mouth
March 3, 2026
Mike Tyson said it best here. It seems like the entire world is caught up in media and internet entertainment and trying to apply it to their personal situations. This weekend it was Iran. Trump appears to want regime change and is encouraging the Iranian people to take back their country.
Last Week’s Sell-Off Could Be The Pause That Refreshes
November 20, 2024
Last week was the first full week of the landslide victory for the 2024 election. As was the case in the 2020 election, the stock market rallied going into the election and then for the first week coming out of the election. Last week was a bit of a different story. Friday was the primary options expiration date for November. These option expiration dates can sometimes...
Sidelined Money Jumped In For Fear Of Missing Out
November 13, 2024
Last week was the election. The media had hyped it up as such an incredibly destructive event that when the results came in without the expected gridlock the hysteria abated like a morning fog. If one were to ignore the fact that there was an election last week and simply pay attention to what the markets are saying...
The People Have Spoken. Now It’s the Market’s Turn.
November 6, 2024
It is November 6th, the day after "Election Day." I say " Election Day " as there is sure to be much consternation and negative banter going on by whichever party seems to be the loser. I for one am really happy that this election is about over. I am tired of the friction between friends, family members, and professionals. Marriages have split up; and friendships have been lost and for what! In the end it isn't even...
Markets Remain Unspooked Despite Brewing 2024 Election Hype
October 29, 2024
As we round the corner on the 2024 election hype, it is clear that the American public is on edge due to media coverage. Whoever your candidate may be, and whether you like Joe Rogan, Tucker Carlson, or some CNN reporter, as the Wall Street Journal stated Monday, “Ahead of Nov. 5, America Is Stressed Out.” Voters on each side see damage to the US whoever wins; ‘a lot of marijuana’- is how the article starts out. Clearly, we are seeing...
Happy Two-Year Anniversary, 2022 Bull Market
October 23, 2024
We are rounding the corner into Halloween and closing in on the Presidential election. With so many different frictional issues both domestically and internationally, it seems almost uncanny that the US equity markets have been on a tear to the upside. Through the end of last week, they...
One Should Never Short a Dull Market
October 16, 2024
With only 30, or 6%, of the S&P 500 firms having reported earnings through Friday, they are off to a pretty good start. Some information technology firms had a strong start while some of the big banks had mixed results. The table below...
The Olympics, Small-Caps, and the Broad Market—Something for Everyone
July 31, 2024
The S&P 500 and QQQ look to be trying to stabilize and rally after a very sharp two-week decline into this week. Trends in the DJIA look far better in the short run than SPX and QQQ which remain within two-week downtrends. Thus, while Friday’s rally was encouraging, it can’t be said with confidence that a move back to new highs should happen right away. However, it’s expected that...
Last Week the Market Caught Its Breadth
July 17, 2024
For the last couple of weeks, I've been addressing the primary concerns that the market prognosticators have been focusing on; Inflation, lack of growth / Recession, and the most often discussed - narrowing breadth. To refresh your memory, breadth is the measure of how many companies in a given index are driving the return of the index. It is often quoted that the S&P 500 would hardly be up at all for the year 2024 if it hadn't been for...
Is Good News Good News Again?
June 12, 2024
As of last Thursday, the S&P 500 and the NASDAQ 100 (QQQ) were back to new all-time highs. They got there quickly as the US Treasury interest rates began an aggressive decline. This new move up in the markets sort of had a wrench thrown in as the employment numbers came out far stronger than expected last Friday. This did nothing more than continue the frustration and confusion surrounding an economy that is less than ebullient, and...
Summer-time Tailwinds
June 5, 2024
As summer begins in earnest, the slowdown in the markets begins as well. Summer tends to be a little sleepier for the markets, unless of course, there are as many events going on as there are this year. The tug-o-war that I keep referring to between the Fed’s need to cut interest rates to stimulate the economy and, in the process, make real estate more affordable to the purchaser is being negatively counterbalanced by inflation numbers, employment numbers and wage numbers that are showing a still too resilient consumer. Based on...
Continue reading...
Does the Fed Really Need to Ease?
May 29, 2024
Last week was an interesting week. Major market indexes continued to grind and chop higher last week before running into a pothole on Thursday as the NASDAQ Composite reversed badly on heavy volume but was still able to hold 10-dma support. It seemed that the culprit was Nvidia, whose earnings last Wednesday evening sparked an early rally. This rally reversed in bearish fashion Thursday, but...
Well-Positioned for an Everything Rally
May 22, 2024
The S&P 500 closed out another strong week last week, with gains of +1.4% in the week alone, taking the total gains for May to close to 6%. As I stated last week, the markets are appearing to be more of a "Buy in May" rather than a "Sell in May and go away!" Looking into this week the economic and earnings reports are pretty light. This week has been more of an AI week with Microsoft's Windows and Surface AI event, followed up by their Build AI event and this afternoon's report of earnings from the market juggernaut Nvidia.
Inflation Remains The Hot Button of Both Stock and Bond Markets
May 15, 2024
When I read the weekend press, I pay attention to several things. Is there turmoil to talk about? Are there earnings to talk about? Are there conflicting economic reports coming out that require us to be prepared for different possible outcomes? This weekend the press was about retirement. What does it mean to you? Should you work longer? Did your spouse pass? Basically, there was so little to discuss that there was the need to find subject matter that had some meat on the bones. What I found particularly interesting was...
April's Shower Might Bring May Flowers
May 8, 2024
Most of the indexes are trading right around their respective 50 DMA’s (Day Moving Averages), showing that quite possibly the April hiatus that the market took after its torrid five-month run might have been an approximately 4% pullback from the March highs and this could have been enough to recharge the markets for their next continuation move higher.
The Fed Continues To Hold The Key
May 1, 2024
Since the days just preceding Tax-Day, April 15th, the US equity market has been on a tear upward that started back in October. The US Treasury bond markets seem to have been the reason for this. After the Fed raised interest rates seven times back-to-back, to stave off inflation, the interest rates rolled over. But since the beginning of the year, the bond market has not been having such a good time of it, giving back the drop in interest rates. The bond market has been...
US Equity Market is Becoming Technically Attractive, Now it Needs to Base
April 24, 2024
On Friday I penned a Special Report. I felt that there is enough negative news swirling around that it would be helpful to quantify and compartmentalize the biggest issues that are being bantered about by the media. Stubborn & persistent inflation, ensuing lack of interest rate cuts, equity valuations after a straight run since late October last year, and a widening number of international wars / snafus that are coming to our shores in terms of protests and racial discrimination. The cover of Wall Street Journal from yesterday was all about...
After a Historic Run, a Pause. What Happens When It Is Done?
April 19, 2024
US stock market investors had been enjoying a period of historically low downside volatility (unabated advance) and consistent upside of late. The S&P 500 Index had not endured a 3% correction since 10/27/2023, the longest stretch since the 308-day streak ending on 1/26/2018. Almost on cue, the S&P 500 dipped more than 3%, ending the streak at 105 trading days...
Happy Unnecessary Government Donation Day
April 17, 2024
To say that it is infuriating reading about all the government spending, and the United States financing of external causes, is an understatement. This is only exemplified by the amount of taxes that we must pay and particularly what we deal with in the lovely state of California! How ‘bout those gas prices! OK, enough about that. I start almost every note with some reminder of...
The Last Leg of the Inflation Fight Is Not Won Yet
April 10, 2024
The market does not “need” a catalyst to fall (or to rise), and narratives explaining why the market does what it does are often only clear in hindsight. There could be any number of factors that lead to the pullback that I keep on warning of. It could even be a combination of reasons: liquidity drain, higher than expected inflation, higher interest rates, geopolitics, politics, banking crisis, recession odds going up, etc. Interim high points usually form when it feels like prices can only keep going up, which is one of the many reasons I think extra caution is warranted here.
Powell Preaches Patience as Inflation Concerns Raise Their Ugly Head Again
April 3, 2024
I hope everyone had a terrific Easter. Except for the rain, it was pretty nice on the Southern California coast. Last week proved to be another week of record highs in the major US stock indexes. Over the last few weeks, I have kept on talking about how it is about time for the equity markets to take rest. Clearly the markets haven't been ready as they have continued to...
Why Interest Rates Are Both Too High- and Too Low
March 27, 2024
We are faced with a very clear dilemma currently. The media, the Fed, and the market prognosticators appear to be solely focused on interest rates and inflation. At the beginning of the year the expectations were for as many as seven interest rate cuts this year. This was based on the expected slowdown in the economy that was a result of...
Fed Discussions Should Bring Clarity on What’s To Come
March 20, 2024
Equity markets finally adjusted from their ascent last week, albeit by a small margin. The closing on Friday March 1st was a smidge higher than on March 8th, which was a whisker higher than last Friday. So tight in fact it almost makes the advance seem like it is moving in on week 21 vs. ending at week 19. As extended as this rally might seem, there are a couple of points that still speak to the health of the advance in the markets. The first is that there is clearly no...
Inflation Remains The Focus of The
Analyst Community
March 13, 2024
Last week I reiterated that I had an expectation that we would see some kind of a contraction or pullback in the equity markets in the near future, as it has been 19 weeks straight up in the S&P 500. As I had shown in the chart, this is longer than the previous two upward runs since the October 2022 lows. It was a run higher that has not only lasted longer but extended further. To refresh the illustration...
Is this a Bubble or Just a Bull Market?
March 6, 2024
For the last number of weeks, I have been writing to be prepared for the feared seasonal correction / digestion. As of yet, it just has not happened. The media has continued to expound on the point that the fuel that they say would be "necessary" to get the market to its new highs would be the Fed lowering interest rates. Well, no such luck here as...
Ides of March Are Just Around The Corner
February 28, 2024
For the last number of weeks, I have been talking about how it could be expected that the markets are prepared for a digestion or a minor correction. I have expressed caution and the possibility of this as a result of the length of time of the current advance, the cyclical / historical precedents at this point in the year and the fact that the Fed remains quite stingy with their desire to lower interest rates. In today's note, I wanted to take a moment and discuss where the markets are currently and then...
The Cycle Remains Positive Despite Current Inflation Measures
February 21, 2024
For the last few weeks, I have been talking about the “expected” pullback in the markets that seems timely in its occurrence. As of yet it really hasn’t appeared. It makes one wonder what the stock market knows that most investors don’t? There have been some landmines in individual names given that earnings reports can be less than stellar at any given moment, but for the most part...
It’s Never Fun, Even When It Is Expected
February 14, 2024
In last week's newsletter I gave a lot of perspective on the markets and that it appears that it might be time for a “digestion." Given that I have received many calls and emails about this term "digestion" and how to quantify it, I thought it might be good to take another look at the markets overall and really think about where things could go. Obviously, nobody knows exactly where and how high or how low the markets will go, but there are some breadcrumbs that often give some hints based on history, current performance statistics, and internal measures. I always caution against...
The First Market Correction of 2024 Could Be Upon Us
February 7, 2024
In last week's newsletter, I covered a few important points. The first point was that earnings have started off being pretty solid. The second point was that February, March, and April; in an election year, have historically proven to be a bit difficult. The third point was what tends to happen in an election year and, more specifically, an election year that follows a year that has been a good one. Now that we are in February, and have finished the first month of the year, several new statistics have popped up allowing us to see what the probabilities are for markets moving forward. But before I begin...
Analyzing the Election Year & Stock Market Conundrum
January 31, 2024
The economy is still growing. Real GDP rose at a solid 3.3% annual rate in the fourth quarter, and consumer spending was strong in December meaning the first quarter is off to a good start. New home sales came in above expectations and initial jobless claims remain low. What’s not to like!
All eyes are now on this Friday’s jobs report, the Fed meeting on Wednesday and most specifically all the big technology companies announcing their earnings beginning this week. If we...
Earnings Acceleration Is Important For the Longevity of the Bull Market
January 24, 2024
As you read this note, the S&P 500 is entering the heart of Q4 2023 earnings season. This allows us to step back and look at the earnings rebound to date and the trajectory for 2024. The earnings recovery is approaching its one-year anniversary. The year/year change in the S&P 500 hit its low point at a decline of -12.7% in the fourth quarter of 2022. As of the third quarter of 2023, the growth rate had rebounded nicely to a -1.5% decline. It is expected to end the calendar year of 2023 at +11.1%. This rebound is expected to continue into this calendar year, with a consensus growth rate of 12.8%. One of the points that I want you to really remember is...
2024 Could Be Somewhat More Difficult Than 2023
January 17, 2024
We've just finished the second week of 2024. After nine weeks straight of an up-stock market to end 2023, 2024 has started with some twists and turns. In this past weekend's Barron's, there was the annual Barron's RoundTable discussion with a group of older market sages like Abbey Joseph Cohen and Mario Gabelli, to name just a couple. The discussion begins with the overall tone of the group being one of disappointment with what to expect in 2024. They come to the conclusion that...
A Cautious Start
January 10, 2024
I always get a kick out of the annual projections from all the talking heads and research departments on Wall Street. I mean think about it. They are all reading the same tea leaves, so how are they usually so separated in what they project for year-end S&P 500 targets? The reports tend to be pretty and the public eats them up, but I find them to be of absolutely no practical value. So much can and usually does happen throughout the year that expecting to be able to decide in advance what the financial markets will do and what will outperform or underperform I think should be left at the bar during the cocktail parties.
In my opinion...
Can the Bull Continue Raging Into the New Year?
January 3, 2024
Happy New Year to All! As we turn the chapter on 2023, we are faced with the constant dilemma of "what have you done for me lately?" To rest on the laurels of 2023 does little help anyone on their financial journey to create the best life for themselves possible. Last year was a great year to be sure. The "Magnificent Eight" had a continuous run and ended up being the small group of huge companies that pulled the markets higher for the year. Besides the late October of year-end advance being truly impressive and leaving many non-believers flat footed, we noticed...
Cautiously Planning For A Happy New Year
December 27, 2023
Just to fill everyone in on the temperature of investors, the only thing I have heard from everyone that is calling in is when we should sell. Not one person has said that they are prepared to invest more capital. Usually the crowd is wrong, maybe not this time, but usually the crowd is wrong. The stock market has refused to provide any sort of lower-risk entry point to add more exposure. If one wants to buy, he or she has been forced to do so while...
Fed Chair Powell Played Santa and Not Scrooge
December 20, 2023
Overall, despite my 2023 expectations for the S&P 500 and other component parts of the US equity markets have clearly been met. So much so that even though I have been positive on the markets, I am a little hesitant to throw more fresh capital at the market after a straight run from 4,100 to 4,700 in a matter of 6 weeks. I say this to...
Inflation Is Abating and Markets are Ebullient
December 13, 2023
I’m not a big baseball fan, but I had to take a pause when I saw that Otani was signing a contract for $700 million over a 10-year period. I mean, what does the team have to charge for a seat, a hotdog, and a beer if they are paying players this much! To repeat a very common phrase, “We live in unprecedented times.” Since the COVID pandemic, the economy has been deeply influenced by a massive increase in government spending, COVID-related shutdowns, and a huge increase in the money supply. In all our years of economic forecasting, the task of identifying where we are and where we are heading has never been so difficult...
We Could See Positive Q4 Advances If Textbook Market Trends Continue
December 6, 2023
If one were to look at the S&P 500 from January 1 of this year till last Friday, the returns have been quite impressive. Given that the annual return since 1900 on the S&P is a little over 10% per year, the 18% return this year (and it ain't over) is really pretty respectable. Considering the returns from international and bonds, they appear even more impressive. But, in my opinion, the difficulty this year has been down to the fact that...
Narrow Leadership Is Not Narrow Growth—Rally Should Continue
November 29, 2023
Last week, the equity markets weren't the Thanksgiving turkey, instead they were a bit of Thanksgiving champagne, as is the norm for the week of Thanksgiving. As I have been saying throughout November, the heavily oversold readings in October sort of set the stage for the November / year-end rally. In late October several technical measures of the S&P 500 broke down to highly pessimistic levels. As of now, the market has come out the other side of this critical period in pretty good shape...
We Could See Positive Q4 Advances If Textbook Market Trends Continue
November 22, 2023
2023 has been quite a ride. The S&P 500 checked off many boxes early on and held true to probability expectations afterwards. The first 5-day rule. The first month rule. The "January Effect" rule, and so on. The market rallied until late July, and then pulled back into late October, as is the norm. Throughout the year I have been providing statistical data of what "usually" happens when the market acts as it has, and to be honest, it is a little scary when things seem to work out so darned textbook! Before I go into exactly what I am looking for next...
S&P 500 Performance Masked by International Friction and Domestic Turmoil
November 15, 2023
2022 put the Wall Street cliche' "It's always a bull market somewhere" to the test for sure. For the first time on record both stocks and bonds fell. In 2023 the decline in bond market prices has continued for a third consecutive year! Again, a situation that has never been experienced. Yet, the first five days of this year the S&P 500 was up, followed by numerous other measures of time suggesting that this year could be quite a good one...
What a Strange, Strange Trip It's Been
November 8, 2023
To say that this has been an exceedingly strange year would be a gross understatement. Throughout 2023 I have highlighted unusual market developments. It started with the strongest first seven months in 26 years. To be followed by the steepest rise in interest rates in 16 years. The breadth of the market has been equally strange in that the market was seemingly...
Bearish Models Versus Bullish Seasonals
November 1, 2023
For the last couple of months, as the equity and bond markets have been taking it on the chin, I have consistently mentioned the seasonal expectations while at the same time trying to scream my message over the relentless drum beat of negativity and negative market action. This is what I intend to cover in this week's note. At the end of the first half of the year (July 19th to be exact) the US equity market, as measured by the S&P 500 and NASDAQ 100, absolutely ripped to the upside. Many negative market prognosticators said...
Investors Remain Cautious as We Wait for Markets to Bottom on Bad News
October 25, 2023
Unfortunately, equities are still caught in a buyer's strike. That is, investors are sidelined as the uncertainties abound and cumulatively are preventing investors from adding growth / risk to their portfolios. As the films of atrocities in Israel and 10-year interest rates hit 5% these uncertainties seem to be gaining strength rather than hitting a high point and rolling over. In looking at what I feel is the most important moniker of concern, I focus on...
Potential Effects of Another Conflict in a Seasonally Positive Period
October 18, 2023
As I reflect on the past week's activity, top of mind is the widening Israel-Gaza conflict. In my view, this tragedy touches every investor personally. For many, this is because of personal knowledge of someone impacted. My son has a player from his water polo team from Cal Berkeley. He and his family are in a shelter in Tel Aviv. This personal connection also means markets will reflect this human aspect, particularly as...
Will October Be a Successful Bear Killing Month?
October 11, 2023
The question I keep asking is, "What can happen next?" We go from a US Government shutdown (see special report two Fridays ago), to the ousting of the Speaker of the House, and now the outright attack on Israel by Hamas. This is getting quite frustrating...
Good Riddance September—Let’s Hope for a Rocktober
October 04, 2023
Thus far, 2023 has been characterized by skepticism of the economy and markets and yet equities have risen. The best entry points have been when market skepticism has been the highest, á la March 2023 or even Oct 2022, and if history is a guide, we are getting close to a one in this month. This is the perspective I have been harping on in my weekly comments as we look towards the final 3 months of 2023...
Good Riddance September—Let’s Hope for a Rocktober
October 04, 2023
Thus far, 2023 has been characterized by skepticism of the economy and markets and yet equities have risen. The best entry points have been when market skepticism has been the highest, á la March 2023 or even Oct 2022, and if history is a guide, we are getting close to a one in this month. This is the perspective I have been harping on in my weekly comments as we look towards the final 3 months of 2023...
Potential Government Shutdown: Going Back to 1960, What Does History Say?
September 29, 2023
In today's Special Report, I wanted to give a bit of attention to the US Government Shutdown. I went back to 1960, compiled and summarized the data and added some brief comments on how this might effect the markets and our economy.
October Could Kick Off Market Climb Despite Interest Rates' 16-Year High
September 27, 2023
Since July, the S&P 500 has dropped down to Friday's low of 4302. This is a decline of almost 7%, following a quite ferocious run for the year of up over 15%. This makes me think of basically three things:
- How much further should the decline go?
- What has been the cause of the decline?
- What should be the focus of equity portfolios when this cyclical decline is over?
Do September Showers Bring October Flowers?
September 20, 2023
True to form, September remains difficult. There have been no negative surprises, yet interest rates have remained frustratingly sticky, and every slice of our economy is dealing with gasoline prices at new highs. This last week I paid around $6.50 for premium. Still doesn’t make me want to be driving an electric car but didn’t make me happy either! Today, the Federal Reserve is set to release a new statement on...