Yowza. Mr. market pretty much completely nullified my bearish thesis entirely from the other day gotta luv it lol. Not sure how many of you are familiar with Caddyshack — it’s one of my all time favorite films. Whelp, I almost feel like I’m Spaulding, where in the scene he goes asking for the different type of food, and Judge Smails then goes “You’ll get nothing and like it!”. It’s like me pointing out the reasons why this market should be going lower with data and charts to back it up, yet Mr. Market pulls a Judge Smails on me by going “GTFO with your bearish sentiments! Throw that out the window with the kitchen sink cause you’ll get nothing and like it!” All jokes aside here though, and as you alluded to as well Marcy, we’ll see what Jackson AssHole does by week’s end. Could be QE taper is can-kicked out to next year due to Delta-Schmelta. Everything was up smartly today, including black gold which has been p decimated the past few weeks, and also PMs like the yellow. Heya, btw Marcy, while I have you on here right now, it looks like the market is looking increasingly likely that it could actually finish this year w/o even the bare minimum of a -5% pull off of an ATH (at least if we’re speaking of the SPX here) this year. Think if Jackson Hole turns out to be a non-event and next month can avoid any black swans, then Q4 is looking promising. Which is usually a pretty favorable month for the markets historically speaking. We shall see!
Good morning contrarians! Stocks are a tick higher this morning and approaching fresh records. This after a broad-based rally on Monday. As of 0635, major indexes are up about 0.2% to 0.3% along with commodities while bonds see some selling. The major economic data release today is new home sales from the Census Bureau out at 1000. Expectations there are for an increase of 3% in July after an unexpected 6.6% decline in June. This is an interesting report from a couple of perspectives: 1) to see if the supply chain issues that supposedly caused the decline are still prevalent and 2) as a gauge of the health of the U.S. consumer. Never been a huge fan of charts but this one does show a decline from the post-pandemic high: (You can get the chart to look more dramatic by zooming in on the y-axis, a trick performed by many news outlets and several economists. Watch for that when the reports come out). Speaking of U.S. consumers, a couple of retailers reporting earnings today as well: Best Buy (BBY) before the open at 0930. Nordstrom (JWN) after the close at 1600.
Yeah I think if there'll be a sizable pullback, it'll be next month. This dip-rally played out as suspected. After getting 5 straight up days, it made another high within the week. The market is on the edge of a sharp pullback, imo, looking at the Fear & Greed index and the McClellan Summation index. We don't have to fall over the edge, but we're there. It would be nice to get a flush out so we can rally strongly.
Big bounce for Chinese stocks today Just like that I am down just 10% now for my JD positions that I bought in March
We're at the top of this uptrend, haven't been able to breakout in the last 3 months. Think if we get a flush then we could do it. All the dips around OpEx from May.
Good morning contrarians! Stock futures are inching upward again this morning. Major indexes up a bit, maybe 0.1% as of 0635. This follows a day of record closes for the S&P and Nasdaq. That was the 50th record close for the S&P this year. Not bad. Seems the market has cooled on its three biggest concerns, namely China, Covid, and higher interest rates. Indeed, Chinese stocks have seen the biggest gains. Pinduoduo (PDD) up 22%. JD.com (JD) 14% higher. Tencent (TCEHY) 13%. Baidu (BIDU) and Alibaba (BABA) also rallying. Apparently a contingent of Wall Street folks and high-level Chinese government officials are looking to open talks again, according to Bloomberg News. There are reasons to be skeptical about this as I explain in the podcast (not gonna type it). It’s been a broad-based rally though. Risk on across the board. Reopening plays have seen strong gains along with meme stocks. Bonds are selling off with the yield on the 10–year back down to 1.3%. There is little on the calendar to change the narrative today. No major economic data releases. Durable goods orders at 0830. Boring. That leaves us watching and waiting for the start of the Jackson Hole Symposium tomorrow. Powell is supposedly going to speak on Friday and supposedly not going to say anything about tapering, much less raising interest rates. That’s according to the market movement at least. Is there a chance it’s wrong? Of course. There doesn’t seem to be any source for this from what I can tell. Or maybe investors have decided that what I’ve been saying is true, that the timing of tapering of bond purchases just isn’t all that important for the overall health of the economy. Where that leaves us is also discussed on the podcast.
Fixed Heya btw, @Contrarian Investor gotta admit I’m kinda liking your little brief pre-market overviews of the trading day ahead. Albeit, admittedly I’m not much for the podcasts, which isn’t to say that I’m against it or nothing either. Just that I don’t personally have the time for them myself as I’m very much a quick in and quick out reader nowadays. I’m sure others will find them useful though. But I do enjoy the brief synopsis of what to expect in the trading day ahead. Thanks bigly for the daily updates you post here every morning mang.
Haha interesting. Heya Marcy, while I got ya on here could you do a quickie favor for me if you won’t mind, and pull up your VIX chart from the other week. Think I recall it was you (amirite?) where you showed the daily VIX chart and correct me if I’m wrong here but I think you had noted that price was going like into the apex of a falling wedge or something like that, and think if my memory recalls correctly think you said right around the Jackson Hole event could be where price would be hitting the apex of that wedge if you will which I had found to be reeeeeeally interesting haha. Apologies that I can’t find that post and link it in here. I’m admittedly writing on my phone right now so it’s a bit of a tedious task to type and do other things atm haha. Thx!
I seem to have removed the bottom floor but I think it should be about 15. This market has been straight up, just pullbacks when the VIX gets too low.
Oh darn it, I just remembered that I never got around to share some of the historical market stats from yesterday in here...better late then never I suppose. Apologies. Couple of stats that hit my radar yesterday that I thought was a bit interesting. So, yesterday marked the 9th closing ATH for the SPX for this month of August. But did you guys know, that with yesterday's closing high, that marked the most closing ATHs for the SPX for any August years since.....get this.....1929 (yes, the year of the first real major stock market crash ever lol). Not insinuating anything here, but just simply pointing that out lol. Chart: Meanwhile, not sure how many of you were even aware of this, but yesterday was actually kind of a notable day, in that it was the 6 year anniversary of the Chinese Yuan devaluation market flash crash. Do any of you remember that day? Maybe not nearly as notable, since after last year's COVID correction broke all sorts of market records for the "worst since" lmao. But, that day in particular was notable because I'm pretty sure it was like the first time ever in history that the DJ30 dropped -1,000 points on an intraday basis at least. I know the DJ30 almost did that on May 6th, 2010, which was like the very first and original "Flash Crash" ever. That day I think the DJ30 missed hitting down -1K points by like literally 1.50 points (was down -998.50 at the dead lows that day haha). But, it did finally do that on August 24th, 2015. Interestingly enough though, ever since that day the SPX has gone on to make 250 new closing ATHs! Finally, yesterday's closing ATH on the SPX happened to be its 50th of this year (2021). Which interestingly has only happened on 2 other instances in the SPX's history through August. That would be in 1964 and 1995. Yowza! Chart: Also, did y'all's know that the SPX has actually closed at a new ATH in each of the 8 months of this year so far in 2021? 2014 happened to be the only year ever that the SPX actually went the full distance from January through December closing at new ATHs for every single month of a trading year. Chart: And finally, here are all of the years that finished with the most closing ATHs for the SPX through the month of August. As mentioned earlier, 1964 and 1995 were the only 2 years that actually had more than 50 new closing ATHs for the SPX. Can any of you guess the only year that was actually down in the final 4 trading months of the year that had at least 30 SPX closing ATHs? Spoiler: Click to Show! 1987 Not saying anything further than that though. But other than that one outlier year, the SPX did actually see continue strength in the months after.
I was guessing we were going to have a pretty flat week until Jackson Hole but clearly I was wrong Interesting to see the bonds yields were higher but the dollar was actually weaker today
Think we may be able to debunk the old adage "Sell in May and go away" for the time being. I don't currently have the full past 20 years statistics on hand at the moment, but I'll try digging for that later when I have time. But, I'm almost for certain when I last looked at the data last year, it was largely not a very bearish period in the market at least for the past couple of years now. But at least for this year speaking. Here are the MTD returns for the SPX since at least May: May UP +0.5% June UP +2.2% July UP +2.3% August currently UP +2.3% after today's close. Meanwhile, as of today's close the SPX is up just shy of +20% (+19.7%) YTD. I was curious about what happens (historically speaking) when the market has been up that much by the end of August. Found out that in at least the prior 2 times, the final 4 months of the year went up another +9.6% (like in 1995) and also +9.7% (like in 1997), yes those 2 years were during the height of the 90s raging bull market. Albeit, if y'all's also recall in 1997, there was a pretty large correction in October of that year as well, but turned out to be a glorious buying opp. And finally, one more quickie stat in here. So, when the SPX is up +15% or greater by the end of August (which is looking more likely right now, absent any major pullback in these final few days of this month), large drops the rest of the year is actually kinda rare, and continue strength seems to be the norm. Albeit, 1987 is listed in this chart below, but not sure anyone back then could have honestly thought with a straight face that being up +36% YTD at the end of August of that year was actually going to be "sustainable" the rest of that year lol. We'll see how the rest of this year plays out here, but despite all of the above (which is mostly overall positive for continued strength into the end of the year) I am still keeping pretty mindful that any left field surprises could still happen at any given point. Staying the course but just keeping mindful, and not oblivious if you will, as this has been a 12-year run higher in the equities market, which is a bit stretched to say the least is all.
My pleasure! The daily podcast is usually just five minutes! But yeah podcasts are not for everybody, especially for this topic.
Good morning contrarians! Stock futures are down a bit as of 0635. Small caps and tech are leading things lower, with the Nasdaq off 0.2% and Russell 2000 0.3% in the red. S&P 500 is down about 0.1% and Dow Industrials flat. This after a fifth consecutive higher close for major indices and fresh records. The Jackson Hole hype party begins in earnest today (virtually of course), though the schedule will not be released by the Kansas City Fed until tonight. We know that the main event is not until tomorrow when chair Jerome Powell takes the (virtual) stage. Some reports of Fed speakers today but probably none of that is very important. It’s all about the hype and speculation about tapering. Ultimately only the Fed chair will deliver the elusive message (or will he?) and that’s not until tomorrow. Seeing how it’s Thursday we have initial jobless claims out at 0830. Expectations there are for 350,000 new claims, in line with last week’s number which was a post-pandemic low of 348,000. Earnings today as well. Retailers Gap (GPS) and Abercrombie & Fitch (ANF) are due to report before the open at 0930. Peloton (PTON) reports after the close. At some point today we should get Dell (DELL), Dollar General (DG), and J.M. Smucker (SJM).
