The market soared 27% since the December low. And continued despite the media beating the gloom and doom drum of the “Debt Ceiling”.
Corporate Bonds: “The Next Shoe to Drop”?
April 26, 2023 by Leave a Comment
A distinct Head and Shoulders pattern exists where the neckline has been broken over the last few days. The corporate bond market has held in reasonably well over the last year, but we fully expect this sector to be the next shoe to drop.
Bull Trap or Market Consolidation?
February 22, 2023 by Leave a Comment
At the end of last week, Chris Ciovacco recorded his weekly “Short-Takes” market analysis, and overall, things looked quite bullish. Most markets were above their moving averages, trends were turning up, and things were looking good. And then this week, markets turned down, and things got gloomier. But as we’ve said before, Stocks Don’t Go Straight Up (or Straight Down), and Chris said last week that he wouldn’t be surprised to see the markets like the S&P 500 retest the 3900-3950 levels. This is all part of a healthy consolidation. Of course, if markets fall below certain levels, we must reevaluate our position and see if the 2023 rally was just a “Bull Trap” after all. We should remember that the FED is still tightening, and we know “fighting the FED” is generally a bad idea.
60% stocks, 40% bonds? Ha!
December 21, 2022 by 2 Comments
Traditional wisdom suggests a quick and easy “Balanced Portfolio” of 60% stocks and 40% bonds. But there are pitfalls to this type of quick and dirty balancing. Theoretically, when stocks fall, bonds should rise or at least maintain their value. More advanced balancing systems might add a Gold or precious metals component of perhaps 10%. Still, further refinement can decrease the stock portion and increase the bond portion as you get closer to retirement age. On average, a 20-year-old has a lot longer to recover from a market downturn than an 80-year-old. So, a younger person can accept higher risk in return for a higher reward, so a 20-year-old might have 80% in stocks and 20% in bonds. An 80-year-old, on the other hand, might have 80% in Bonds and 20% in stocks. In the following article, the Editors at Elliott Wave International look at some of the pitfalls of the balanced portfolio approach. ~ Tim McMahon, editor
U.S. Dollar: Has the Mainstream Been Way Too Confident?
December 7, 2022 by Leave a Comment
Investors who use Elliott wave analysis know that the main price trend of a financial market subdivides into five waves. Also know that wave 1 and wave 5 are often approximately equal in length. That knowledge helped the Global Market Perspective, a monthly Elliott Wave International publication that covers 50-plus financial markets, make a successful call on the U.S. Dollar index. The November issue showed a monthly chart which dates back more than 14 years
Stocks Don’t Go Straight Up (or Straight Down)
September 1, 2022 by Leave a Comment
Big stock market trends don’t progress up or down in a straight line. In a bear market, stocks typically rebound after the first leg down. In a bull market, the opposite happens: Stocks again take a big dive, making everyone think the bear market has returned.
But in a bear market, that “first leg down” is wave 1 and the partial “rebound” which follows is wave 2. I say “partial” because the only rule which applies to wave 2 is that it cannot retrace 100% of wave 1. Meaning, the bear market rally cannot go above the previous market top.
How to Prepare for a Hard-Hitting Bear Market (Think 1929-1932)
July 21, 2022 by Leave a Comment
An important step in preparing for a historic bear market is to embrace cash or cash equivalents.
This may seem obvious, but even with the stock market in a downtrend, cash is shunned by many an investor — retail and professional. Many of these investors believe the bull market will resume — sooner rather than later.
What to Make of the Stock Market’s Bounce
June 7, 2022 by Leave a Comment
“For certain, there will be countertrend rallies” By Elliott Wave International The stock market selloff from March into the May low was comprised of eight straight weeks of decline in the Dow Industrials. This was historic. The Dow Industrials have been around for 126 years and this was only the second time that the senior […]
Is the Correction Over Yet?
May 31, 2022 by Leave a Comment
Last week Chris Ciovacco of Ciovacco Capital Management posted a video with his always thorough analysis considering whether this was the last hurrah before a major bear market or the final
test of support before the market resumed its uptrend. He entitled it “Trend Exhaustion or Eminent Plunge” . At around the 5:35 point, that video explains the Demark Studies “9-13” setup for
a reversal and how it plays into this week’s analysis. “9-13” signals on the downside are relatively rare but we got one in May. So, we need to keep an open mind to the possibility of a reversal to
the upside. Even though from a sentiment perspective or even a fundamental perspective it is very difficult to see how any good can be in the pipeline.
Is Bitcoin Headed to Zero?
May 14, 2022 by Leave a Comment
During the 2008 meltdown gold initially lost value as speculators sold gold to cover margin calls. But it quickly recovered as investors realized that gold was the only asset that wasn’t simultaneously someone else’s liability. So the question arises, “Will Bitcoin turn out to be an Asset or a Liability”?
