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09 Feb
Daily Market Commentary

Week-In-Review: Stock Bounce After Very Tough Week On Wall Street

Stocks Bounce After Very Tough Week On Wall Street

The market looks like it just put in a near term low on Friday as the bulls showed up and defended the longer-term 200 DMA line. In the last two weeks, the market erased the last 10-week’s of gains. That, ladies and gentlemen, is not an insignificant sum and should not be taken lightly. Clearly, that is not aunt Jane and uncle Joe selling, it’s the big institutions. The market went from egregiously overbought to egregiously oversold in a few trading days. The vehemence of this sell-off is worrisome because we are still in a bull market. Imagine, what will happen when we enter a bear market. Stepping back, from a longer-term point of view, a nice steep correction would do wonders to restore the health of this very strong unabated bull run, it is way overdue. History shows us that 80% of corrections do not turn into bear markets and 20% do. So, if this one turns into a bear market, then we will adjust and be ready. History also shows us that markets do not top out overnight, instead tops take time to form. For now, we know the overtly strong bull market has cracked and the crazy “buy at any price” mentality is gone. That may come back, but for now, patience is paramount.

Mon-Wed Action:

The stock market imploded on Monday as sellers regained control of the market. At one point, the Dow was down 1,500 points and the S&P 500 turned negative for the year. That followed Friday’s 666 point shellacking. The financials and energy sectors were the worst performing sectors and dragged the market lower. Ray Dalio, the largest hedge fund manager in the world, tried to calm markets and said these are just ‘minor corrections,’ still lots of cash to buy the dip.” The damage over the past few days has been severe and should not be taken lightly. Stocks jumped 567 points on Tuesday as the bulls tried to regain control. On Wednesday, the Dow jumped nearly 400 points before sellers showed up and sent stocks lower by the close. That was the largest intra-day reversal in 2 years and clearly shows the bears are in control.

Thur & Fri Action:

The Dow plunged 1,000 points on Thursday as sellers aggressively sold stocks all day. To help allay any concerns about the Fed tightening too fast, Chicago Fed President Charles Evans said that the Fed will not raise rates before mid-2018. Interestingly, stocks are falling as earnings continue to be strong. Of the S&P 500 companies that had reported close to 80% had announced better-than-expected earnings which sets the stage for a strong 2018. On Friday, the market opened higher, fell hard, then reversed and closed higher after the bulls showed up and defended the longer-term 200 DMA line. As long as Friday’s lows hold, Friday appears to be a near term low.

Market Outlook: Market Correcting

The market is pulling back and the bulls are trying to defend the longer-term 200 DMA line. For now, as long as that level holds, the longer-term uptrend remains intact. As always, keep your losses small and never argue with the tape. Hit A Wall? Not Sure What To Do In The Market? We Can Help. Don’t Go It Alone, Learn More Here…
 

02 Feb
Daily Market Commentary

Week-In-Review: Stocks Finally Pullback, Now What?

Stocks Finally Pullback, Now What?

The market is finally pulling back to consolidate its very healthy and very strong advance. Remember, markets do not go up forever and it is perfectly normal (and healthy) to see the market pullback after a very strong rally to consolidate the move. Nice orderly pullbacks are healthy and allow savvy investors to step in and buy (when the weak hands are selling). Separately, it is important to note that 200-500 point daily swings are the new “normal” for the Dow. Historically, the market can easily move 1-2% on any given day (up or down) without blinking an eye. Now, that the Dow is trading near 25k, a 1% move equals 250 points. So a 200-500 point move is not as “severe” as it used to be when it represented a move greater than 2%. Right now, the market is in “pullback mode” and I expect that to continue until the major indices trade near their respective 50 DMA lines. That is the next important level of support to watch. Ideally, for the bulls, the market will pull into the 50 DMA line, sit for a little, then move higher again.   

Mon-Wed Action:

On Monday, the Dow fell 177 points as investors were concerned regarding the 10-year treasury yields. The Dow, along with the S&P 500, posted its worst decline of the year on Monday. On Tuesday, stocks fell 362 points, which was the largest decline since August 2017, as investors continued to worry about rising yields. After Tuesday’s close President Trump delivered his first State Of The Union Address and outlined a bullish path for the future. Stocks opened higher on Wednesday but gave back most of the gains on the last trading day of January. Stocks enjoyed healthy gains in January which was the best month since March 2016. Separately, the Fed held its first meeting of the year and said it was concerned about rising inflation. That is the Fed’s way of telling the market to expect more tightening going forward. Remember, one of the primary drivers of this very strong bull market has been easy money from the Fed and other central banks. So any signs (or hints) of tightening easily spooks investors. Separately, a slew of earnings were released this week with a mixed to mostly lower reaction.

Thur & Fri Action:

Stocks were quiet on Thursday as investors waited for Apple, Google, and Amazon to report earnings after Thursday’s close. Apple and Google fell while Amazon rallied after earnings. Before Friday’s open, the government said U.S. employers added 200k new jobs in January, beating the Street’s estimate for 175k. A stronger than expected jobs report strengthens the case for the Federal Reserve to raise rates which spooked investors. At one point, the Dow fell 665 points as the market continued pulling back from one of the most extended/overbought conditions in history! In last week’s report, I pointed out that the Dow was 2,000 points above its 50 DMA line and 4,000 points above its 200 DMA line. At this point, the best thing the market can do is pullback into its 50 DMA line.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. Hit A Wall? Want To Achieve More Goals? We Can Help.
Learn More

26 Jan
Daily Market Commentary

Week-In-Review: Stocks Rally On Strong Earnings

Stocks Rally On Strong Earnings

The bulls remain in clear control of this market as the impressive rally continues unchecked. There are a few important things to note: First, the market is extremely extended. Second, it refuses to fall. In fact, pullbacks last a few hours, not even a few days. Third, even stocks that gap down on earnings are almost immediately bought up which tells you everything you need to know about this very strong bull market. I’m still of the mindset that we are entering a climax run where the market just takes off and rallies into no-man’s land. Historically, a climax run occurs in the late stages of a bull market and you can easily see the market surge 50% in a few months as the buying frenzy gets out of control. We still have a slew of earnings that are coming out over the next few weeks but needless to say, in the short-term, the market is way overdue to pullback. 

Mon-Wed Action:

Stocks rallied on Monday, erasing slight losses from earlier in the session, as U.S. lawmakers reached a deal that would re-open the government after it closed Friday night at midnight. Separately, earnings season is off to a good start. So far, nearly all of the big banks are trading higher after reporting Q1 results and nearly 68% of the companies in the S&P 500 that reported earnings beat estimates according to data from CNBC and FactSet. After Monday’s close, Netflix gapped up after reporting solid numbers. On Tuesday, the Nasdaq and S&P 500 hit fresh record highs as Netflix surged. The video streaming giant said it added 8.33 million new subscribers, easily beating the Street’s estimate for a gain of 6.39 million.  Netflix’s stock vaulted over +10% on Tuesday which helped the company’s market cap jump above $100 billion for the first time. Stocks opened higher on Wednesday, but sold off mid-day before rallying back into the close.

Thur & Fri Action:

Stocks were quiet on Thursday after weaker-than-expected housing data was released. On Wednesday, existing home sales missed estimates. Then, on Thursday, New Home Sales came in at 625,000, missing estimates for 680,000. A slew of housing stocks fell on the news. Stocks rallied on Friday after President Trump gave a speech in Davos and said U.S. is open for business. Before Friday’s open, the government said, Q4 GDP rose by 2.6%, missing estimates for a gain of +2.9%.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. Hit A Wall? Want To Get More Done? Achieve More Goals? We Can Help.
Learn More Here

24 Jan
Media Quotes

FoxBusiness: Coffee, Cocoa, Orange Juice Futures Rally on Demand Hopes

Coffee, Cocoa, Orange Juice Futures Rally on Demand Hopes

By Amrith Ramkumar 
Several soft commodities rallied with energy products and metals Monday as the dollar fell following the International Monetary Fund’s upward revision to its global growth forecasts for 2018 and 2019.
Arabica coffee for March delivery climbed 1.1% to $1.2255 a pound on the ICE Futures U.S. exchange. Meantime, March cocoa added 0.4% to $1,938 a ton, paring gains after rising as high as $1,975 in the session. Frozen concentrated orange juice for March also posted gains, closing up 1.3% at $1.4845 a pound.
The IMF said the global economy will gain momentum, driven in large part by recently approved U.S. tax-code changes.
Although analysts say several soft commodity markets are well supplied, Adam Sarhan, chief executive of 50 Park Investments, said he expects demand to grow as the global economy strengthens, supporting prices.
“The tax cuts have big implications,” he says. “That helps demand, both domestic and international.
“Commodities as an entire asset class are deeply undervalued” following a yearslong downturn in prices, especially relative to stocks, he added.
The greenback’s fall has been another factor boosting dollar-denominated commodities recently by making them cheaper for overseas buyers. On Monday, the WSJ Dollar Index, which tracks the U.S. currency against a basket of 16 others, fell 0.2% following a sixth consecutive week of losses.
Some analysts have said investors covering short positions have also led to sporadic gains in the sector this year.
In other markets, March raw sugar pared earlier gains and closed down 0.6% at 13.17 cents a pound and March cotton inched down less than 0.1% to 83.41 cents a pound.

Link:
http://www.foxbusiness.com/features/2018/01/22/coffee-cocoa-orange-juice-futures-rally-on-demand-hopes.html

19 Jan
Daily Market Commentary

Week-In-Review: Stocks Continue To Rally As Earnings Season Begins

Stocks Rally As Earnings Season Begins

Not much changed from my comments last week. Stocks went from being overbought, to being very over-bought in a matter of a few weeks. The fact that the market refuses to fall in a meaningful fashion clearly shows you how strong the bulls are right now. Stepping back, it is important to keep a cool head and remain cognizant of the fact that the market is very over-bought and due to pullback. Buying up here, after a big move, is not prudent and it is a matter of when, not if, the market pulls back. The first important level to watch is the 50 day moving average for the major indices. Last week I noted that the semiconductor stocks ($SMH) fell while the broader markets rallied. Someone most of have been reading because, since then, Semis rallied hard and are now back above the 50 DMA line. Stepping back, the market remains very strong as we head into earnings season. Remember, in bull markets, surprises happen to the upside, not the downside. 

Mon-Wed Action:

Stocks were closed on Monday in observance of the MLK holiday. Stocks gapped up over 200 points on Tuesday but sellers finally showed up and the Dow fell around 100 points intra -day before rallying back and closing unchanged. On a daily bar, that was a negative reversal which normally marks a near term high. Instead of falling, stocks rallied hard on Wednesday after Apple (AAPL) said it will repatriate billions of dollars in overseas cash and several big banks reported earnings. The Dow jumped 322 points as investors cheered a strong start to earnings season. Accordingly to data from CNBC and Reuters, most of the companies that have reported earning so far have beat estimates.

Thur & Fri Action:

Stocks were mixed to slightly lower on Thursday as the market paused to digest its recent (and very strong) gain. Morgan Stanley (MS) reported stronger-than-expected earnings which capped off a bullish start to earnings season from the big banks. So far, most of the big banks rallied after reporting earnings which is a bullish sign. Separately, some people were concerned about a government shut down. Congress has until Friday night to avoid a shutdown. Historically, a government shutdown leads to a short-term pullback for the market. Stocks were quiet on Friday as the market waited to see what would happen in D.C. with respect to the government shutdown. The official deadline is Friday at midnight.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. We’ve All Hit A “WALL” Before. Learn How To Break Your Mental Walls & Accomplish Your Goals…Learn More Here

17 Jan
Media Quotes

CNBC Asked Adam About The Stock Market

Dow jumps 250 points, breaks above 26,000 once again

  • The S&P 500 gained 0.8 percent, with staples and tech as the best-performing sectors.
  • Bank of America reported adjusted quarterly earnings that surpassed analyst estimates.
  • Earnings season is off to a strong start thus far.

Jan 17, 2018

Stocks traded higher on Wednesday following the release of stronger-than-expected quarterly results from some of the biggest U.S. companies.
The Dow Jones industrial average rose 219 points, breaking above 26,000 once again. The index first broke above the milestone mark on Tuesday, but failed to close above it.
The S&P 500 gained 0.8 percent, with staples and tech rising more than 1 percent. The Nasdaq composite rose 0.8 percent.
Bank of America reported adjusted quarterly earnings that surpassed analyst estimates. U.S. Bancorp also posted better-than-expected results.
Earnings season is off to a strong start thus far. Of the S&P 500 companies that had reported as of Wednesday, 78 percent have surpassed earnings-per-share estimates while 89 percent have beaten expectations on the top line, according to Nick Raich, CEO of The Earnings Scout.
“You’ve got a bullish start to the earnings season and earnings are expected to be strong for 2018,” said Adam Sarhan, CEO of 50 Park Investments. He added: “The very strong underlying trend for the market remains in place.”
Equities closed lower on Tuesday after a sharp reversal from record levels. The Dow closed 10 points lower after rising as much as 283 points and breaking above 26,000 for the first time.
The reversal took place as concerns of a government shutdown loomed over investors’ minds. Congress needs to pass a spending bill by the end of Friday to avoid a government shutdown.
Robert Pavlik, chief investment strategist at SlateStone Wealth, said there were concerns in the market that stocks had risen too much too quickly. “The government shutdown played right into that,” he said. “I think the pullback was cooler heads prevailing. I don’t want people chasing the market and pushing it higher for no reason.”
Overseas, European stocks fell slightly, with the Stoxx 600 slipping 0.1 percent. In Asia, the Nikkei 225 fell 0.4 percent.
Elsewhere, shares of Juno Therapeutics spiked 48 percent higher after The Wall Street Journal reported the company was in talks to be acquired by Celgene.

Link: https://www.cnbc.com/2018/01/17/us-stocks-dow-earnings-bank-of-america.html

12 Jan
Daily Market Commentary

Week-In-Review: Stocks Soar Ahead of Earnings Season

Stocks Rally Ahead of Earnings Season

Stocks went from being overbought, to being very over-bought in a matter of a few weeks. The fact that the market refuses to fall in a meaningful fashion clearly shows you how strong the bulls are right now. Stepping back, it is important to keep a cool head and remain cognizant of the fact that the market is very over-bought and due to pullback. Buying up here, after a big move, is not prudent and it is a matter of when, not if, the market pulls back. The first important level to watch is the 50 day moving average for the major indices. The one negative divergence that showed up on my radar last week was that the semiconductor stocks ($SMH) fell while the broader markets rallied. Semis tend to be a leading group, so I will continue to watch them closely. Outside of that, the market remains very strong as we head into earnings season. Remember, in bull markets, surprises happen to the upside, not the downside. 

Mon-Wed Action:

On Monday, stocks ended mixed to slightly lower as the market paused to digest the Dow’s strongest start to a new year since 2006. Right out of the gate in 2018, the major indices hit fresh record highs and also broke above key milestones. The Dow, S&P 500 and Nasdaq closed above 25,000, 2,700 and 7,000, respectively. On Tuesday, stocks rallied sharply helping the benchmark S&P 500 to enjoy the best start to a year since 1987.
On Wednesday, sellers showed up in the morning but the bulls quickly stepped in and aggressively bought stocks. At one point the Dow fell about 100 points but rallied back and ended slightly lower by the close.  The fact that the market refuses to pullback, even from very over-bought levels, tells you everything you need to know about the market right now. This type of very strong action tends to occur near a market top, not near a bottom. So just keep that in the back of your mind as this very strong bull market ages.

Thur & Fri Action:

Stocks rallied nicely on Thursday after Delta Air Lines ($DAL) and KB Home ($KBH) both rallied after reporting stronger-than-expected quarterly profits. Stocks rallied on Friday after several of the big banks reported earnings, and most rallied on the news. Overall, earnings are expected to have grown by 10.6% during the fourth quarter, according to S&P Capital IQ. Remember, from my point of view, the most important factor to look at during earnings season is how the market and individual stock react to their earnings.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. What’s Stopping You From Achieving Your Goals? Answer: Your Mental Blocks…Learn More Here

05 Jan
Daily Market Commentary

Week-In-Review: 2018 Opened With A Bang

2018 – Rally Continues

2018 opened with a bang! Not only did the major averages continue to hit new record highs, there was virtually no selling to speak of. Clearly, this is very strong action and it tells you that the bulls remain in control as sellers remain virtually no where to be seen. What does that mean for 2018? Based on historical precedent, odds favor, 2018 will be another strong year on Wall Street. In 2017, the Dow rallied +25% and that has happened ten times since 1950. Only two of those times did the market fall in the following year and it continued to rally 8 times. Out of the 8 up years, 6 of them were up double digits and the average yearly gain (after a 25% year) was +12.6%. The data suggests that 2018 will most likely be a positive year but history also shows us that volatility should pick up. Stay tuned…

Mon-Wed Action:

Stocks were closed on Monday for New Years. On Tuesday, the Dow opened up over 100 points as investors opened the new year with a bang. According to Ryan Detrick, from LPL, “Does the 1st trading day of the year matter? Sounds random, but … Past 20 years, on the 1st day of a new year the S&P 500 has been higher 10 times and lower 10 times. Full year return if up the first day? +14.2%. Full year return if down the first day? -0.6%” Just some food for thought and it would surprise nearly everyone if stocks rallied sharply again this year. My clients know that, until we see any signs of weakness, I’m bullish on the market. On Wednesday, stocks continued to rally and big money flowed into nearly all areas of the market.

Thur & Fri Action:

Stocks rallied on Thursday as a lot of money flowed into the semi-conductor group. Most of the semi-conductor stocks were pausing for a few weeks as they consolidated a big move in 2017. For now, the move continues and tech stocks in general remain exceptionally strong. Stocks rallied sharply on Friday after the government said, U.S. employers added +148,000 new jobs last month, missing estimates for 191k.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. What’s Stopping You From Achieving Your Goals? Answer: Your Mental Walls…Learn More Here

03 Jan
Media Quotes

CNBC Asks Adam About The Stock Market

Dow, S&P 500 and Nasdaq hit record highs; chip stocks rise

  • The Nasdaq composite jumped 0.6 percent to a record, with Advanced Micro Devices surging more than 6 percent; the Dow and S&P 500 also hit record highs.
  • Investors largely shrugged off a tweet from President Donald Trump about North Korea’s Kim Jong-Un.

Wednesday, January 3, 2018
U.S. stocks rose to all-time highs Wednesday as a gain in chip stocks propelled the tech sector higher. The Nasdaq composite jumped 0.6 percent, with Advanced Micro Devices surging more than 6 percent. The Register reported there is a security flaw with Intel processors. The report said the issue will require a significant security update of Linux and Microsoft Windows operating systems to work around it. AMD shares jumped on the back of the report. Nvidia’s stock climbed 5.2 percent, following AMD’s gains. Intel shares, meanwhile, declined more than 2 percent.
“The 2017 trends are continuing in 2018,” said Adam Sarhan, CEO of 50 Park Investments. “You’re seeing a lot of money flowing back into the semiconductors” after some profit-taking at the end of last year. The VanEck Vectors Semiconductor exchange-traded fund (SMH) easily outperformed the broader market last year. It rose 36.5 percent while the S&P 500 gained 19.4 percent.
The S&P 500 also posted an all-time high, advancing 0.4 percent with tech rising 0.9 percent. The index also broke above 2,700 for the first time. The Dow Jones industrial average traded 52 points higher to hit a record.
Investors largely shrugged off a tweet from President Donald Trump about North Korea’s Kim Jong-Un. Trump tweeted on Tuesday that his “nuclear button” was “much bigger and more powerful” than the one controlled by the North Korean leader.

“The market has sort of priced in this kind of banter,” said Jeff Zipper, managing director of investments at U.S. Bank Private Wealth Management. He also noted investors may be numb to these tweets “because they’ve become somewhat daily.”
In economic news, the ISM manufacturing index hit 59.7 percent in December, while construction spending rose 0.8 percent in November. The Atlanta Federal Reserve raised its fourth-quarter real GDP forecast to 3.2 percent from 2.8 percent, citing the strong ISM number.
The Federal Reserve is also scheduled to release a summary of its December meeting at 2 p.m. ET.
In corporate news, Scana shares popped 23 percent after Dominion Energy announced it was buying the South Carolina-based utility company for $7.9 billion.
Link: https://www.cnbc.com/2018/01/03/us-stocks-amd-intel-trump-fed.html
 

29 Dec
Daily Market Commentary

Week-In-Review: 2017 Another Solid Year For Stocks

2017 – Another Solid Year For Stocks

2017 will go down in history as another solid year for Wall Street. The major averages all surged to fresh record highs as volatility remained exceptionally low. There were several bullish macro catalysts for the strong rally on Wall Street, most notably: Strong GDP, Corporate Earnings, Low Interest Rates From Global Central Banks, and the strong year ended with a big tax cut. The market remains very strong as investors continue to show up and buy every dip. The one big concern as we head into 2018 is that a lot of time has passed since we have seen a meaningful pullback or a correction of any sort. The last meaningful sell-off was in Jan-Feb 2016, since then stocks have soared. Additionally, the last bear market was in 2008-2009 which makes this the second longest bull market in history. Bottom line, the market remains exceptionally strong until we see any selling on Wall Street. 

Mon-Wed Action:

Stocks were closed on Monday for Christmas. On Tuesday, the market was quiet after shares of Apple Inc (AAPL) gapped down on a report that the new iPhone X sales are sub par. The bulls showed up and defended the 50 day moving average line for Apple which is a healthy sign. Separately, the Wall Street Journal reported that U.S. retailers had a good Holiday Shopping season which made up for an other wise lousy year. That news helped a slew of retail stocks to rally. Remember, retail stocks have been under pressure for the past few years as shares of Amazon (AMZN) continue to soar to new record highs.
On Wednesday, stocks closed slightly higher as utilities and real estate stocks rallied. Trading volume was very light and was one of the quietest days of the year. Big money is moving back into the beaten down commodity sector as valuations remain stretched to the downside. In a bullish note, Copper prices soared to the highest level since 2014 as investors look forward to the infrastructure plan in 2018.

Thur & Fri Action:

Stocks were quiet on Thursday as money rotated back into tech stocks after a few day breather. In another illustration of strength, on a monthly basis, the major averages are setting more records. The Dow Jones Industrial Average is on pace for its first nine-month winning streak since 1959 and the S&P is on track for its first nine-month winning streak since 1983. Stocks fell on Friday which was the last trading day of the year.

Market Outlook: Bulls Are Strong

The bulls are back in control and the market remains very strong. As always, keep your losses small and never argue with the tape. Want To Talk To Adam About Your Portfolio? Schedule A Complimentary Portfolio Review Here…

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