Last week, we noted that “nothing good happens below the 200-DMA,” and the tariff-induced market crash this week confirmed that. However, we also noted that over the last 30 years, previous failures at the 200-DMA have also often been buying opportunities. That is, unless some “event” of magnitude creates a massive shift in analysts’ estimates. “For this […]
A Wall Street axiom states that the stock markets lead the economy by about six months. While not a perfect predictor, the stock market reacts to investor expectations about future corporate earnings, economic activity, interest rates, and inflation. When sentiment shifts due to anticipated weakness in any of these areas, equity prices often decline, reflecting […]
In last week’s post, “Is the correction over?” we wrote about the potential for a rally back to the 200-DMA. However, the failure of that test increased short-term concerns. As we noted in that post, there were early indications of buyers returning to the market. To wit: “The chart below has four subpanels. The first […]
Following the latest Federal Reserve meeting, there was a massive surge in media headlines stating “stagflation.” The media’s stagflation panic is unsurprising as it elicits memories of the late 1970s during the Arab oil embargo. Of course, a “stagflation” is excellent fodder for clicks and views as it scares the “bejeebers” out of people. Over the last […]
The biggest question I have been getting from clients and prospects lately is, “Is the correction over?” \This is not surprising, given that market declines are brutal on emotions. However, as investors, we often forget that, like the laws of gravity, “what goes up must come down.” In today’s blog post, I want to provide two […]
U.S. recession risks have been a headline over the last few weeks as the markets sold off. “Goldman Sachs and Moody’s Analytics in recent days joined forecasters raising alarm about the increased likelihood of an economic downturn. The warnings coincided with a market plunge touched off by U.S. tariffs against Canada, Mexico, and China, some of which […]
It has been an interesting correction. The average retail investor was “buying the dip” despite having an extremely bearish outlook. This is an interesting point because, as shown, the retail investor used to be considered a “contrarian indicator” as they were prone to be driven by emotional behaviors that led them to “buy high and sell low.” […]
Human stupidity is the one thing you can rely on in financial markets. I recently read a great piece by Joe Wiggins at Behavioral Investment, which discusses why “Investingis hard.” The entire article is worth reading, but here are the five key reasons investors often fail at investing: These are great points, particularly now that there […]
The recent sell-off has certainly sparked concerns with investors but the NYSE advance-decline line is an important technical measure to watch. However, what is it, and why does it matter? The NYSE Advance-Decline (A/D) Line is one of the most crucial market breadth indicators that investors watch to assess the overall health of the stock […]