Market Timing 06 (May 18 - Oct 22)

Market Timing 06 (May 18 - Oct 22)

Postby winston » Fri May 04, 2018 3:49 pm

Are We In a Bear Market? The Evidence Keeps Piling Up as May Begins

When the dip buyers hang back on CAT, GOOGL and other once-popular names, that's not a good sign.

by Bob Lang

Is a bear market showing up? Certainly, some qualities of a bear have started to arrive.

The action last week on April 24 might have indicated that we're ready to shift gears. We saw a downright nasty reversal that day, with higher volume levels and some very heavy selling.

Further, there was little buying of protection, which is often seen as a trait of bull markets. (Bear markets arrive unannounced.)

Now, some of the biggest rallies occur during bear markets, but few traders or investors are nimble or efficient enough to play the downside and profit well from them. Both bulls and bears usually lose money in bear markets. That's just a fact.

Of course, big institutions use bear markets to buy stocks for the long haul. After all, pensions, banks, hedge funds, trusts and foreign entities aren't your day-trader type.

They buy stocks and hold them for years, letting shares appreciate and pay dividends if that's the case. However, when interest rates rise and risk changes (as we might be seeing now), the argument for holding stocks can change, too.

Now, we're already seeing rising volatility, which is normal during at least a bull market's correction phase. Big money will buy heavy pieces of volatility or index puts and hold them short term to weather the storm. That's a cheap way to buy protection without having to sell long-term holdings.

But we saw something quite different as well last week. Stock sellers were quite active, but buyers of volatility were noticeably absent.

Stalwart names like Caterpillar (CAT - Get Report) , Alphabet (GOOG - Get Report) , (GOOGL - Get Report) , Lockheed Martin (LMT - Get Report) and Boeing (BA - Get Report) all sold off heavily as dip buyers stood back to wait. That's classic bear-market activity.

Buyers haven't been rushing in to buy stocks like Caterpillar on a dip.

Now, I'm not saying we're in a bear market for sure, but the weight of evidence is certainly piling up in the bears' corner. Big institutional money is starting to get nervous with each pull down toward the S&P 500's 200-day moving average, for good reason.

After all, the S&P 500's 200 DMA has more or less held firm for several years. The last real test came in early 2016, but the S&P 500 has risen some 25% since crossing back over that line.

The Bottom Line

The market's price action since late January hasn't been inspiring, and with bond yields up, commodity prices higher and sharp price moves among equities, it might be time to break out the bear suit.

I'm willing to continue giving this long bull market the benefit of the doubt, but the evidence that it will continue to run is looking increasingly thin.

Source: The Street

https://www.thestreet.com/investing/sto ... t-14576696
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Sat May 05, 2018 8:47 pm

3 reasons why this bull market is far from over

by Joe Fahmy
1) Psychology. The market tends to fool the majority and almost everyone thinks we are late stage.

2) Earnings. The recent quarterly earnings reports from many market leaders showed incredible acceleration in growth and profit margins.

3) Slow and Steady. Over the past 8 or 9 years, the economy was never in an explosive growth stage. We have simply been growing GDP at 1.5-2.5% per year.

The new Bull Market started in July 2016 after Brexit and can continue to accelerate for a while.


Source: Yahoo Finance

https://finance.yahoo.com/news/3-reason ... 40347.html
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Tue May 15, 2018 12:44 pm

Here’s a thought: Maybe the stock market won’t crash this year because it can’t

By Shawn Langlois

It’s still early, but, according to Goldman Sachs GS, +0.41% S&P 500 companies are on track to announce a record $650 billion in buybacks this year.

Apple AAPL just to name one, is already out there with its massive $100 billion program.

There’s an added tailwind to the buybacks, considering companies are bringing back cash from abroad under the Trump administration’s new tax regime.


Source: Market Watch

https://www.marketwatch.com/story/relax ... 2018-05-14
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Tue May 15, 2018 8:20 pm

Here’s how you’ll know when this bull market is just about done

By Mark Hulbert

Even if it’s not at an extreme, bullishness has grown markedly over the past couple of weeks. And, given investors’ manic-depressive mood swings, bullishness could reach dangerous extremes in a matter of days.

The HNNSI rose as high as 57.6% last week, for example, before dropping back at week’s end to 40.4%.

At the stock market’s January high, for example, the HNNSI got as high as 89%. In mid-March, when the Nasdaq Composite was actually above where it stood in January, the HNNSI rose to an even higher level — 92%.

It would instead be a bad sign if the timers stubbornly cling to their bullishness in the wake of any weakness.

Bottom line: Look for extreme levels of bullishness that persist in the face of any market weakness.


Source: Market Watch

https://www.marketwatch.com/Story/heres ... yptr=yahoo
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Tue May 22, 2018 8:11 pm

We Still Have Plenty of Upside Ahead in Stocks

by Dr. Steve Sjuggerud

First up is the advance/decline line. This gave us an extreme early warning in the last great stock market “Melt Up” in 2000… While the Nasdaq Composite Index didn’t peak until March 2000, the advance/decline line peaked in 1998.

This is a simple indicator… You take the number of stocks that went up and in a day, and subtract the number that went down that day. That’s it. The running total of that is the advance/decline line. It shows when more stocks are rising than falling, or when the opposite is true.

In 1998 to 2000, it was going down. But today, it’s hitting new highs. No “early warning” sign here…


Next up, let’s look at small-cap stocks, as measured by the Russell 2000 Index…

Small-cap stocks can tell a similar story to the advance/decline line. If they are weakening while the major indexes are going up, it tells you that the overall stock market is not healthy… that the number of winners is narrowing.

That is not a problem today. Small-cap stocks just hit all-time record highs.


Source: DailyWealth.com

http://dailytradealert.com/2018/05/22/w ... in-stocks/
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Wed Jun 20, 2018 2:59 pm

No Right Time for Market Timing

by Lou Carlozo

Economist William Sharpe calculated a market timer would have to be correct 74 percent of the time -- on both the market decline and recovery -- to outperform another investor who just lets their money sit in the S&P 500.

This compares poorly against the 'expert' market timing gurus who have a track record of 47 percent correct predictions.

"Buffet says that if we aren't willing to buy and hold shares of a company for 10 years or more, we shouldn't buy it".




Source: U.S.News & World Report

https://finance.yahoo.com/news/no-time- ... 44341.html
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Fri Sep 21, 2018 2:15 pm

The 'Great Bull' market is 'dead,' and here's what's next, Bank of America predicts

The "Great Bull" market is over as economic growth becomes less certain, interest rates rise and debt becomes an overhang, according to Michael Hartnett, chief investment strategist at Bank of America Merrill Lynch.

Hartnett advised investors to focus on "inequality, innovation and immortality," that would benefit pharma companies and technology disruptors, along with inflation plays.

Interest rate hikes from the Fed and other central banks will have a significant impact on growth that may not be anticipated in the markets.

by Jeff Cox

Source: CNBCcom

https://www.cnbc.com/2018/09/19/the-gre ... yptr=yahoo
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Sat Oct 06, 2018 5:56 am

Get ready for an 8% to 13% stock market correction

By Mark Hulbert

Rising large-cap stocks give ‘the illusion of market strength’

The reason Martin believes the market is headed for a significant decline is the divergences between the few large-cap stocks that are rising (and thereby propelling the market averages higher) and the vast majority of other stocks that are not. Divergences spell imminent trouble.

Martin says it’s safe to assume that “the decline will start in the next month or two, if not sooner.”


Source: Market Watch

https://www.marketwatch.com/story/get-r ... 2018-10-04
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Sun Oct 21, 2018 9:19 am

This Signal Says We’ll See All-Time Highs in 3 Months

by Ben Morris and Drew McConnell

During Wednesday and Thursday of last week, the S&P 500 Index fell 5.3%. It was one of the 46 biggest two-day declines in 50 years (20 of which happened during the last bear market, between September 2008 and March 2009).

Over the past 30 years, the S&P 500’s RSI has only dropped below 20 six times.

All six were good buying opportunities. The S&P 500 climbed in each instance, over every time frame we looked at from two weeks to three months.


Of course, this doesn’t mean that each time the RSI dropped below 20 it marked the exact low. It didn’t…

During the dot-com bust in 2001, the RSI dropped below 14. And if you had bought an S&P 500 index fund on the day the RSI fell below 20, you would have been down 6.5% just three days later.

But that was the largest drawdown for any period across all six occurrences. And by the two-week mark, the S&P 500 had bounced all the way back and gained 1.8%.


Buying after these rare RSI extremes has been an excellent idea. If the S&P 500 simply returns its average after the recent extreme, it will close at 2,960 on January 11… a new all-time high.


Source: Daily Wealth

http://dailytradealert.com/2018/10/20/t ... -3-months/
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Re: Market Timing 05 (Jan 16 - Dec 18)

Postby winston » Fri Oct 26, 2018 8:09 am

Has the stock market sell-off bottomed? These four things will tell you when

U.S. stock markets have struggled to find footing in October, and Nicholas Colas, co-founder of DataTrek Research, says there may be more room to fall.

He listed four metrics to use as a road map “through the minefield” in the process of finding a bottom, including sentiment on rate hikes and global equities.

“We don’t think the selling is over and now is not the time to bottom feed,” Colas says.

by Kate Rooney

"Bottoming is a process, not an event"

1. Fed backs off hiking talk

2. Tech stocks vs. consumer staples stocks

3. Fear gauge has to rise further
The number to watch for is 28, he said, which is one standard deviation from the long run mean. The next level to watch is 36, which is two standard deviations away.

4. Stabilization in non-U.S. equities


Source: CNBC

https://www.cnbc.com/2018/10/25/four-th ... KW,1U1T8,1
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