Weak Economic Data Discourages Bulls and Validates Fed’s Inflation Policy

On the surface, today’s stock market results were mixed and relatively unchanged. Deeper analysis indicates sellers are in control and bulls are not as eager to commit new capital, especially in …

Continue Reading →

Fed Minutes Indicate a Shift in Attitude towards Tapering

The risk-off trade is dominating investor sentiment. One place where this is clearly evident is in cryptocurrencies which are undergoing a savage correction. Meanwhile, the US Central Bank, aka the Fed Reserve, is beginning to pivot from its accomodative monetary policy. The latest minutes show some of its members are more open to discussing the tapering of asset purchases. The implication of such is

Continue Reading →

Weaker Momentum and Volume Bearish for Stocks

This evening’s comments will be brief due to schedule conflicts. My outlook for the markets is short-term bearish as momentum continues to decelerate. The breadth of volume contraction is what concerns me the most. Investor sentiment towards the buying of stocks, especially…

Continue Reading →

Fed Assurances Stave Off Inflation to Supports Stocks

Although today’s economic calendar was light, data in Manufacturing pointed to expansion in this phase of the business cycle. Pent-up demand is driving this growth and putting upward pressure on commodity prices, such as Gold and Oil. Energy and Basic Materials stocks easily outperformed the stock market indexes and all other major sectors. The Federal Reserve, for its part, provided…

Continue Reading →

“Transitory Inflation” Gains Credibility with Wall Street

Even though the market ended the week with an impressive two-day rally underscored by the superior performance of large-cap tech and small-cap stocks, it was not enough to prevent a weekly loss. In lieu of this, a few new insights were learned about the character of this market or its cycle:

Continue Reading →

Market Rally Legitimate or a Dead Cat Bounce?

Was today’s trading session a legitimate rally or a dead cat bounce? There were certainly some notable catalysts supporting its legitimacy: 1) the CDC announcement to lift mask requirements for anyone fully vaccinated; 2) Fed bankers defiantly jawboning for lower interest rates in the face of “transitory inflation” data evident in producer prices; and 3) the ongoing improvement in the US labor market. Does anyone sense a “but” statement forthcoming in this analysis?

Continue Reading →

CPI Data Reignites Fears of Inflation and Market Risks

Today’s CPI report reignited inflation fears and the economic ramifications. Truth be told, this market has been overbought and technically overextended and accompanied by decelerating momentum and volume. Now we are witnessing early signs of capitulation. This is healthy and creates the ideal environment for a relief rally.

Continue Reading →