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This week's sentiment report highlighted company insiders and the fact that they have stepped up their selling. Some may question the wisdom of following company insiders. After all, they were buying at the October, 2007 top and have been selling for the past 8 months.
Sunday, February 28, 2010
Saturday, February 27, 2010
Investor Sentiment: What Are Your Expectations?
Company insiders are selling in record numbers, once again. Yes, insiders have been selling for the better part of 8 months as share prices have risen, but how good could a company's prospects be if those at the controls don't see any benefit of holding onto their shares? The S&P500 has moved over 60% since the March, 2009 lows. The "bull market" hype has been nothing but a trading range for 4 months now, and over this time, the "dumb money" has been increasingly bullish while the "smart money" has shown indifference. If all this isn't enough to get you to realize the market's prospects are limited without a meaningful pullback, then maybe the actions of company insiders will. If insider expectations continue to remain low, then why should yours remain high?
Friday, February 26, 2010
Deflated!
Just when I get all poofy about some market "call", here comes Mr. Market to deflate my bubble.
Morning News Notes: 2/26/2010
The "Morning News Notes" as prepared by TL...Q4 GDP, Bernanke and the deficit, California's budget and healthcare.
Thursday, February 25, 2010
In Response To Your Feedback
I appreciate all the feedback I received two weeks ago in response to my post entitled, "Your Opinion Please....". Your comments were overwhelmingly positive about the blog, and this kind of feedback always makes me happy. Thank you. With regards to monetizing certain aspects of the blog, the readers have a clear understanding as to why I would go in this direction, and I believe your suggestions have been helpful in deciding how I will proceed.
Morning News Notes: 2/25/2010
The "Morning News Notes" as prepared by TL...American Trucking Association, health care, and Bernanke.
Wednesday, February 24, 2010
Did You Sell GLD, GDX, SLV?
Ok, this one is for all you bull market geniuses out there who have been buying the SPDR Gold Trust (symbol: GLD), the Market Vectors Gold Miners ETF (symbol: GDX), and the i-Shares Silver Trust (symbol: SLV) all the way down and since they peaked in mid January.
Fed Funds Rate Hike
Last week the Federal Reserve hiked the discount rate. In this analysis, TL looks at Wall Street's and the market's expectations going forward, and what tighter monetary policy will mean for equities.
Morning News Notes: 2/24/2010
The "Morning News Notes" as prepared by TL...the S&P Case Shiller Home Price Index, loan demand for homes, Greece, short selling rules changes?, and Volcker rules.
Tuesday, February 23, 2010
Treasury Bonds: The Correct Play Is To Be Long
Over the past many months, I have spent much time on this blog writing about US Treasury bonds. Treasury bonds have become a tale of two diverse stories, and both stories have the potential to be secular or generational in nature.
Morning News Notes: 2/23/2010
The "Morning News Notes" as prepared by TL...HD and MDT earnings, housing bargains become scarce, more Greece, WMT dipping a toe into digital technologies, sovereign defaults, and China and IMF gold.
Rydex Market Timers: A One Day Bet
Figure 1 is a daily chart of the S&P500. The indicator in the lower panel measures the ratio of the amount of assets in the Rydex bullish and leveraged funds relative to those funds that are bearish and leveraged.
Monday, February 22, 2010
WealthTrack: On US Treasury Bonds
A fascinating and informative discussion on US Treasury Bonds. Robert Kessler and David Darst make the case for and against, respectively, US Treasury Bonds. While the arguments are ones familiar to readers of this blog, I am beginning to suspect that the truth lies somewhere in between, and it will be very difficult to make money in either direction. This is a 27 minute video from Consuelo Mack's WealthTrack recorded on February 11, 2010.
Morning News Notes: 2/22/2010
The "Morning News Notes" as prepared by TL... Greece, bank failures, support for the Volcker rules, and US GDP.
Sunday, February 21, 2010
Rydex Market Timers: Making Bearish Bets
Figure 1 is a daily chart of the S&P500. The indicator in the lower panel measures the ratio of the amount of assets in the Rydex bullish and leveraged funds relative to those funds that are bearish and leveraged.
Saturday, February 20, 2010
Investor Sentiment: Bounce Mode
The investor sentiment data is consistent with a market that is in bounce mode. Following the late January sell off, investors really did not become too bearish. The subsequent bounce over the past 2 weeks has once again created a sense of complacency across our various metrics. In light of this, it will be difficult for the major stock indices to climb to new highs. Despite the recent short term strength, it is still my contention that we will need to go lower before heading meaningfully higher. I discussed the research behind this claim in the article, "Why I Think We Need To Go Lower Before Going Higher".
Friday, February 19, 2010
Morning News Notes: 2/19/2010
The "Morning News Notes" as prepared by TL... Fed action and comments, bank profits, Greece, Volcker rule, and health care.
Throw This Squirrel A Nut
Every now and then, even this squirrel will catch a nut. My "call" on the Dollar Index on January 19 has been prescient, and it appears that the Dollar can still move higher as key price levels (i.e., resistance) continue to fall. See figure 1, a weekly chart of the Dollar Index.
Thursday, February 18, 2010
Morning News Notes: 2/18/2010
The "Morning News Notes" as prepared by TL... China and US tensions, FOMC minutes, states see $1 Trillion sink hole, and Simon Property Group and General Growth.
Wednesday, February 17, 2010
Rydex Market Timers: Take A Guess Before You Read!
Figure 1 is a daily chart of the S&P500. The indicator in the lower panel measures the ratio of the amount of assets in the Rydex bullish and leveraged funds relative to those funds that are bearish and leveraged.
Morning News Notes: 2/17/2010
The "Morning News Notes" as prepared by TL... stimulus spending, Fed worried on deficit, China no longer largest holder of US debt, housing, S&P500 technicals, Berkshire Hathaway - what they are selling, and Citigroup - who is buying.
Another Technical Update: TLT and IEF
One month ago, I looked at US Treasury bonds, and I was a bit more constructive than I had been in the prior 12 months. Technically, it had appeared that TLT and IEF had made reversals. So what has happened?
Tuesday, February 16, 2010
Rydex Market Timers: Still Bearish
Figure 1 is a daily chart of the S&P500. The indicator in the lower panel measures the ratio of the amount of assets in the Rydex bullish and leveraged funds relative to those funds that are bearish and leveraged.
Morning News Notes: 2/16/2010
Monday, February 15, 2010
Rydex Market Timers: Bearish And More!
Figure 1 is a daily chart of the S&P500. The indicator in the lower panel measures the ratio of the amount of assets in the Rydex bullish and leveraged funds relative to those funds that are bearish and leveraged.
Saturday, February 13, 2010
Investor Sentiment: Finally Turns Neutral
Finally, the "Dumb Money" indicator has turned neutral after spending 28 consecutive weeks in the extreme bullish zone. For those keeping score at home, the S&P500 gained 8.9% over the past 28 weeks. For the sake of comparison, investor sentiment was either bearish or neutral for the 9 weeks following the March 6, 2009 bottom, and over that time, the S&P500 gained 36%. I will leave it to you as to which market environment I want to put my money to work.
Friday, February 12, 2010
Why I Think We Need To Go Lower Before Going Higher
In the short term, the equity markets are just holding on. Risk trade on. Risk trade off. One day up and one day down. I have identified one reason to be long and in the markets (i.e., Rydex market timers turning bearish), but I have been very clear that this Rydex "strategy" is a very short term play. Remember, in this strategy, winning trades only last on average 6 trading days.
Rydex Market Timers: Remain Bearish Heading Into Holiday Weekend
Figure 1 is a daily chart of the S&P500. The indicator in the lower panel measures the ratio of the amount of assets in the Rydex bullish and leveraged funds relative to those funds that are bearish and leveraged.
Thursday, February 11, 2010
Morning News Notes: 2/11/2010
The "Morning News Notes" as prepared by TL... jobless claims, small banks, Fed exit strategy, Greece, Obama and the budget, and China.
Rydex Market Timers: Still Bearish
Figure 1 is a daily chart of the S&P500. The indicator in the lower panel measures the ratio of the amount of assets in the Rydex bullish and leveraged funds relative to those funds that are bearish and leveraged.
Wednesday, February 10, 2010
Ceridian - UCLA Pulse of Commerce Index
The Ceridian - UCLA Pulse of Commerce Index tracks fuel purchases at 7000 truck stops around the country, and the idea is that the index will mirror industrial production providing a timelier snapshot into the state of the economy. The index was developed by the UCLA Anderson Center in conjunction with credit card processor Ceridian.
Morning News Notes: 2/10/2010
The "Morning News Notes" as prepared by TL... Greece and Germany, Bank of England, Fed exit strategy, and the Pulse of Commerce Index (this is neat!).
Tuesday, February 9, 2010
Rydex Market Timers: Are Now Bearish!
Figure 1 is a daily chart of the S&P500. The indicator in the lower panel measures the ratio of the amount of assets in the Rydex bullish and leveraged funds relative to those funds that are bearish and leveraged.
Morning News Notes: 2/9/2010
The "Morning News Notes" as prepared by TL... Greece, Fed exit strategy, and Monday's performance by sector.
Monday, February 8, 2010
Rydex Market Timers: Becoming More Bearish
Figure 1 is a daily chart of the S&P500. The indicator in the lower panel measures the ratio of the amount of assets in the Rydex bullish and leveraged funds relative to those funds that are bearish and leveraged.
Trends In Gold, 10 Year Treasury Yields, And Crude Oil
Over the past year, I have most often discussed the composite indicator constructed from the trends in gold, crude oil, and yields on the 10 year Treasury in the context of high readings. Collectively, when these trends are strong and rising, stocks tend to under perform. This has been the case over the past 25 years and over the past 10 months during this epic bull run. But what happens to equities when this indicator registers a low reading - as in the trends in gold, crude oil, and yields on the 10 year Treasury are weak and falling?
Morning News Notes: 2/8/2010
The "Morning News Notes" as prepared by TL... Greece, Bernanke, Geithner, Greenspan, unemployment and job creation, and odds of an increase in Fed Funds rate.
Sunday, February 7, 2010
Saturday, February 6, 2010
Investor Sentiment: Are We There Yet?
Like those long distance car trips I take with my children where 90 minutes into an 8 hour drive they say, "Are we there yet?", market participants are wondering the same: are we there yet? Will the recent bout of selling entice the buyers such that the market will revisit the highs last seen only 4 short weeks ago? Anything can happen, but from a sentiment perspective, the answer remains the same as last week: complacency reigns and this is not a high reward, low risk investing environment.
Friday, February 5, 2010
Morning News Notes: 2/5/2010
The "Morning News Notes" as prepared by TL...non-farm payrolls, Volcker rules, WSJ on US debt and credit rating, total equity fund flows, and fundamental items weighing on stocks.
Thursday, February 4, 2010
Morning News Notes: 2/4/2010
The "Morning News Notes" as prepared by TL...jobless claims, V earnings, CSCO earnings, CLX earnings, and mortgage spreads.
Wednesday, February 3, 2010
Copper: Market Top?
Copper, the metal with the Ph. D. in economics, has retreated some 12% over the last 4 weeks. Possible causes include: 1) slowing economic growth; 2) withdrawal of stimulus money worldwide especially in China; 3) supply demand imbalances; and 4) bubble dynamics that has seen excessive speculation in the metal.
Morning News Notes: 2/3/2010
The "Morning News Notes" as prepared by TL...Volcker, Greece, auto sales, and PIMCO's El-Erian on equities.
Tuesday, February 2, 2010
To Risk Or Not To Risk
In many respects the current market environment can be broken down into a very simple construct: to risk or not to risk. To start this week, the risk trade is back on. Risk assets, such as stocks and commodities, are moving higher; safe haven assets, such as bonds and the Dollar, are moving lower. Last week, the risk trade was off. Safe haven assets outperformed as the risky assets went into a swoon.
Key Price Levels: Battle Lines Have Been Drawn
Now that the market has pulled back a bit, the proverbial bounce has commenced at the expected levels. Areas of support and resistance are noted on the charts as the battle lines have been drawn.
Morning News Notes: 2/2/2010
The "Morning News Notes" as prepared by TL...small business lending, Royal Bank of Australia, Volcker's testimony, and Obama's budget.
Monday, February 1, 2010
Morning News Notes: 2/1/2010
The "Morning News Notes" as prepared by TL...Exxon Mobil earnings, Obama's budget, Toyota recall, S&P500 technicals, S&P500 earnings, and comments by Fed's Bullard.
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