The Federal Reserve has signaled to the markets that economic data would have to veer significantly off their anticipated path to terminate the Fed’s tapering process. Some additional taper-friendly remarks were made this week.
Thursday’s new all-time closing high on the S&P 500 is relevant from a support and resistance perspective. The previous all-time closing high of 1,848 was printed January 15.
We were recently asked in a handful of emails about the importance of emerging market bonds (PCY) relative to the S&P 500. The basic question was “should we be tracking the emerging market bond ETF (EMB) to monitor the health of the S&P 500 (SPY)?”
Last week, we noted that buying dips in 2014 was riskier than doing so in 2013. Markets often anticipate bad news. The news that came Monday made it hard on last week’s dip buyers.
When the U.S. markets are healthy, overseas concerns often get overlooked. You have seen headlines about China recently, but may not have taken the time to click-through.
Supply and demand is a simple and powerful concept. When investors are confident about future economic outcomes, they gravitate toward growth-oriented and higher beta ETFs.
Earnings season always causes some hesitation in the bull’s camp. As more and more releases hit the wire, the question is will the concerns be justified?
The U.S. economy is highly dependent on consumers buying and consuming. It is much easier to buy and consume when you are employed. Consequently, investors monitor the labor market very closely.
As we noted on January 2, the market’s current profile does not point to an imminent bear market in stocks. However, anyone who studies markets knows strong bull markets are inevitably followed by principal-destroying bear markets.
As we prepare to close the books on 2013, investors are being hit with a variety of financial forecasts for 2014. Are we better off basing investment decisions on forecasts or a method based on observing, tracking, and adjusting?
Why was the stock market able to break out from the 13-year consolidation pattern we covered last Friday? The bigger picture answer may lie in the answers to these five sub-questions.
The weekly chart of the Dow below tells us the battle between bullish economic conviction and bearish economic fear continues to be won by the economic optimists.
Before we examine how long bull markets can last, it should be noted the bulls have the fundamental and technical stars aligned for a year-end rally in stocks. From a probability perspective, the best time to invest is when charts and economic reports agree.
If the market’s pricing mechanism (aggregate opinion of all investors) perceives the economy is strong enough to take the baton from the Fed, it is bullish for equities. Perception sets asset prices. Friday’s GDP report helped strengthen bullish perception.
We made the case on July 30 the Fed’s desire to taper is about bubble management rather than confidence in the economy. Hard evidence aligning with a “the Fed is still concerned about the economy” stance was...
If you follow the markets closely, you have probably asked yourself at some point why does the Fed keep sending mixed messages? If we think in extremes, we can understand the Fed’s rationale.
The Fed has said for some time it wants to see substantial improvement in the labor market before ending this round of quantitative easing, meaning an aggressive tapering schedule is not likely to be announced in the coming weeks...
With some better than expected economic news to digest, the S&P 500 was up 5 points early in the pre-holiday session, which added to the bullish list of things to be thankful for.
Before we examine the bear market red flags that were waving in 2000 and 2007 and how they relate to 2013, it is important to acknowledge the role of central banks in the stock market’s advance.
