Stocks Are Extremely Overbought

Optimism Is Hyperbolic Stocks rallied again Thursday as the S&P 500 was up 0.7% and the Russell 2000 was up 1.72%. The S&P 500 is now up 3.45% year to date. That’s an amazing month of returns and we’re only almost halfway through January. The CNN fear and greed index is at 77/100 which is…

Room To Run In Public & Private Non-Residential Spending

Yield Curve Expected To Flatten The latest difference between the 10 year bond yield and the 2 year bond yield is 58.44 basis points. That’s about 8 basis points of steepening from the bottom on January 4th. The CME website shows the next likely rate hike will be in March as there’s a 1.5% chance…

The Dow Is The Most Overbought Since 1904

End Of The Streak- Stocks Still Overbought The stock market finally ended its remarkable run to start the year, but stocks are still euphoric. This 0.11% selloff in the S&P 500 only ends the streak; it doesn’t make stocks less overbought. As you can see from the chart below, the 14 day RSI on the…

Savings Rates Not Increasing With Fed Funds Rate

Zero Indicators In A Recession With the Atlanta Fed GDP Now forecasting 2.7% GDP growth in Q4 and the blue chip signaling a similar result, it’s not surprising to see the chart below show that 0% of indicators are in a recession. The net percentage of indicators which are accelerating has improved after a modest…

Stocks Hit A Record 6 Straight Days To Start The Year

386 Days Above The 200 Day Moving Average The record for consecutive new highs to start a year has been tied in the Nasdaq and the S&P 500 as stocks rallied again on Tuesday. As you can see from the chart below, the S&P 500 is in the 2nd longest streak where it has been above…

Second Longest Record Streak To Start A Year

Stocks Have An Endless Bid The S&P 500 was up again on Monday, foiling my thesis that there would be a correction this week. The S&P 500 is up 5 out of 5 days this year for a gain of 2.77%. Some investors who outperformed last week already had gains which equal a good year in…

Best Pre-Earnings Period Since Q4 2010

Q4 Earnings Estimates Look Great This has been a remarkable pre-earnings period because the estimates have only moved down 0.3%. As you can see from the chart below, the earnings estimate change has been the best since when they were increased by 0.6% in Q4 2010. Q4 2010 was when the economy was just recovering…

Leveraged Loans Decline For The First Time in 16 Months

Working Age Men Show Improvement Even though the headline jobs report missed, there were enclaves of strength. As you can see in the bottom chart, the labor force participation rate among men aged 25-54 increased to 89% on a seasonally adjusted basis. This is about a 1% improvement from the bottom which was hit in…

BLS Report Disappoints As Only 148,000 Jobs Were Created

Stocks Press Their Luck The first week of trading in 2018 ended with a bang as the S&P 500 was up 0.7% on Friday. It is up 2.6% year to date already. At this impossible pace, most year end price targets will be met by the end of the month. I remain steady in my…

The Bottom 90% Rely On Pension Funds

Stocks Power Higher In 2018 The stock market continued on its torrid pace in 2018 as it was up again on Thursday. The S&P 500 was up 0.4%. This is the third straight day with a record. The last time the S&P 500 started off the year with 3 straight records was 1964 (it did it…

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