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It is becoming clearer by the week that the rally that was ignited last August on the heels of QE2 is running out of gas. If prices did move higher, it is possible that this could be construed as bullish as it does take bulls to make a bull market. But being so late in the rally, it would seem that any potential gains would be just crumbs to the gains that have already been made. Furthermore, without a sell off to move investors and cash to the sidelines, it is hard to see a rally of any significance developing. Call me a non-believer, but the market really needs to sell off and investors need to turn bearish (i.e., bull signal) before any real umph returns to this market.
Monday, May 23, 2011
Tuesday, May 17, 2011
Please Pardon the Mess and Inconvenience.
I am in the process of upgrading this website/ blog to a fresher look and feel, so my attention has been turned to these efforts. Blog posts will be limited while the new site is under construction. Hopefully, this will be complete by next week. Please pardon the mess and inconvenience.
Monday, May 16, 2011
Morning News Notes: 5.16.11
The morning news notes as prepared by TL...debt ceiling hit, IMF head caught in scandal, a "technical" default may not be so bad, FOMC minutes out on Wednesday, and White House to accelerate domestic oil production.
Saturday, May 14, 2011
Investor Sentiment: The Market Lacks Umph!!
It is becoming clearer by the week that the rally that was ignited last August on the heels of QE2 is running out of gas. If prices did move higher, it is possible that this could be construed as bullish as it does take bulls to make a bull market. But being so late in the rally, it would seem that any potential gains would be just crumbs to the gains that have already been made. Furthermore, without a sell off to move investors and cash to the sidelines, it is hard to see a rally of any significance developing. Call me a non-believer, but the market really needs to sell off and investors need to turn bearish (i.e., bull signal) before any real umph returns to this market.
Friday, May 13, 2011
USO Update
It appears that the Google Blogger site had some difficulties in the last 24 hours. The two articles that I wrote on the United States Oil Fund (symbol: USO) yesterday have disappeared into the heavens. Well not quite...I found them out there....somewhere ....and they may be accessed by clicking on the links below.
Wednesday, May 11, 2011
Morning News Notes: 5.11.11
The morning news notes as prepared by TL...speculation that Qadaffi is dead, Gallup poll on Republican Presidential hopefuls, and gas prices are not falling.
Tuesday, May 10, 2011
Morning News Notes: 5.10.11
The morning news notes as prepared by TL...the debt ceiling, CME crude margins hiked, Libya and small business optimism.
Monday, May 9, 2011
Morning News Notes: 5.9.11
The morning news notes as prepared by TL...SP500 v. Dollar Index, Bahrain, Muni's -- crisis averted?, Germany and Greece.
Sunday, May 8, 2011
Investor Sentiment: The Devil is in the Details
While the main indicators barely budged week over the week, components used to construct these indicators are starting to head towards extremes.
Friday, May 6, 2011
Oil = Ughhh!
Yesterday's bout of selling in the oil patch was rather unpleasant and quite unexpected. About 3 months worth of gains were wiped out in a single day. Uggh.
Morning News Notes: 5.6.11
The morning news notes as prepared by TL...change in private payrolls, US debt ceiling, Goldman on oil, and commodities take a hit.
Thursday, May 5, 2011
I Hope You Were Not One of Those Buying
Monday's market action saw some of the strongest buying amongst the Rydex market timers in over 10 years. Oops!
Morning News Notes: 5.5.11
The morning news notes as prepared by TL...deficit reduction talks begin, OPEC to take action to get oil under $100?, US considering corporate tax repatriation holiday, Greece and giant asteroid heading towards earth!
Wednesday, May 4, 2011
Morning News Notes: 5.4.11
The morning news notes as prepared by TL...the Shanghei Composite continues its slide, Mexico's Central Bank buys gold, prominent hedge funds selling gold, Boehner on the debt ceiling, and Portugal.
Tuesday, May 3, 2011
The Question Investors Should Be Pondering
It looks like we are back to that risk on - risk off market. Risk assets, like equities and commodities, are down while bonds are trading slightly higher today. While this is really nothing new, the question investors should be asking themselves if today's action is a prelude to a more significant turning point. In other words, will bonds catch a bid while riskier assets take a breather.
Investor Sentiment: Shorts Giving Up?
Echoing a theme I highlighted in the weekly look at investor sentiment, here is an article from MarketWatch on David Einhorn, head of hedge fund firm Greenlight Capital. It seems as though Greenlight Capital closed a significant number of short positions in quarter 1 not so much because of fundamental reasons but because the market only goes up.
Monday, May 2, 2011
The Bullish Case for Equities
Our indicator constructed from the trends in the CRB Index, gold, and yields on the 10 year Treasury has not been in the extreme zone for 8 weeks now , and within the context of a trend following strategy that I have detailed here, here, and here, the SP500 should have a positive bias. In essence, with prices on the SP500 above its 40 week moving average and our indicator not in the extreme zone, prices should move higher. The trend remains up and inflation pressures are neutral. This is the bullish case for equities.
Sunday, May 1, 2011
Investor Sentiment: Why Bet Against the Market When It Only Goes Up?
Why bet against the market when it only goes up? After almost 2 years of a seemingly relentless upwards move with only one real buying opportunity, market participants have clearly become accustomed to the notion that the market never goes down. This is a sign of true complacency. I am not calling for a market top or the start of a bear market -- there are too many "Johnny come lately's" willing to buy at the sign of any weakness --but let's be clear: investors are becoming comfortable with the market. The dips are becoming shallower and I suspect the peaks (or time at new highs) won't last as long as well. While it is always important to buy low and sell high, I believe this will really be important going forward as the margin for error increases as sentiment becomes exceedingly bullish. This requires patience and discipline, which are characteristics few investors and traders demonstrate. I can easily be constructive on exposure to the equity market, but in the absence of a sell off, it is hard to see adding exposure.
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