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by winston » Sat Jun 17, 2023 7:10 am
Reiterated his year-end target of 3,900 on the S&P 500 Index, warning that a profit recession is still underway.
“It’s going to get worse before it improves next year”.
Meanwhile, Goldman Sachs Group Inc’s David Kostin raised his year-end forecast for the S&P 500 to 4,500.
by winston » Tue Jun 20, 2023 8:33 pm
The S&P 500 is trading at levels it hasn’t seen since April 2022.
And with the VIX trading where it was right before the Coronavirus Crash of 2020, the conditions are certainly there for a disappointing surprise that sends the market lower.
All this tells me is that we’re still in a trader’s market.
As the market is now reaching bullish extremes, it’s time to be on high alert for mean reversion opportunities as well as exit points on those breakout trades. It’s all about adapting to the market that’s in front of you right now.
by winston » Wed Jun 21, 2023 9:38 pm
Even though the bear market is over, the pain of last year is far from gone. Everyone is still a bit shellshocked… And that makes it easy to fall prey to all kinds of scary stories about the market.
Don’t make that mistake. The trend is up. Stocks are performing well. And you want to put money to work right now to take advantage of it.
by winston » Thu Jun 22, 2023 8:40 am
"I think the market is more rational than it's been in a decade. Which is great news because we're finally done with this experiment of zero interest rates. We know what the Fed is gonna do, we are off the zero bound," BofA analyst Savita Subramanian told CNBC.
"I think that we're at a place where visibility and transparency is better than it was over the past 10 years."
While these are all bullish signs for investors, Subramanian also admits that investors can probably expect lower returns over the next 10 years than they've enjoyed over the previous 10.
"But I think that they're [the returns] driven by the right stuff, productivity and efficiency, companies are doing the right things right now and I think it's interesting to see corporate America adapt to this weird world that we've lived through. We've got a lot more rational of a market setup today," Subramanian said.
That's not to say that there aren't still irrational sectors of the market -- she specifically calls out AI -- but overall her view is positive.
by winston » Thu Jun 22, 2023 3:01 pm
One reason is the fact that market breadth has improved in recent weeks
The S&P 500 Advance-Decline line just closed at a new all-time high last week, another bullish signal
1. Record highs aren't far away.
2. Market breadth is improving.
3. Stocks won't go down.
by winston » Sun Jun 25, 2023 9:40 pm
Growing fears over the Federal Reserve’s higher-for-longer policy outlook, U.S. Q2 earnings seasons, as well as extreme sentiment and positioning have left stocks vulnerable to a pullback.
Earnings are expected to drop -6.4% in the second quarter. If -6.4% is confirmed, that would mark the largest year-over-year earnings decline reported by the index since the second quarter of 2020. It will also mark the third consecutive quarter in which S&P 500 earnings have declined year-over-year.
Q2 2023 revenue expectations are also worrying, with sales growth expected to decrease -0.4% from the same quarter a year earlier. If that is in fact the reality, FactSet pointed out that it would mark the first time the index has reported a year-over-year decline in revenues since Q3 2020.
The CNN Fear & Greed Index has flashed a ‘Greed’ signal for over a month, with sentiment even reaching ‘Extreme Greed' levels in recent sessions.
The AAII survey showed 42.9% of American individual investors expressed a bullish outlook for the next six months, not far from the highest level of bullish sentiment since November 2021.
Only 27.8% of individual investors expressed a bearish outlook, marking the first time it has been below 30% for three consecutive weeks since November 2021. The AAII survey revealed that the bull/bear spread indicates that upside positioning is crowded, and downside protection is attractively priced.
by winston » Tue Jun 27, 2023 6:43 am
JPMorgan strategists earlier this month estimated the rebalancing flows could total about $150 billion worth of equity selling and a similar amount of bond buying - factors that may already be impacting markets over recent sessions.
by winston » Tue Jun 27, 2023 9:27 pm
The trend has been up for most of the year. And as time has gone on, we’ve seen more and more reasons to expect prices to keep rising.
Stocks tend to keep soaring after officially entering a new bull market.
The new bull market is here. New highs are on the way. And that means you want to own stocks.
by winston » Wed Jun 28, 2023 7:46 am
by winston » Tue Jul 04, 2023 8:09 pm
My short-term target is 4512, which coincides with a swing point from April 21, 2022.
While there certainly is more bullish potential, my analysis is telling me it’s time to start getting more cautious as the market breaks higher and higher.
As Jeff and I have both said in the past, it’s likely the bear still needs to take one more vicious swipe at this market.
Therefore, the best approach is likely to take this market one step at a time. And for now, the next step is likely an attempt at testing 4512 in the SPX.
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