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Eric Parnell, CFA

 
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  • Why Thursday's Sell-Off Matters [View article]
    Hello mobyss,

    Thanks for your great comment and some very good technical observations. Amazingly, a -10% move to 1790 still has the market more that +3% above its 400 day M.A., which has historically been the last line of defense before threatening to enter a bear market. Goes to show the buffer of support currently under this market. And hopefully the Fed will finally stand aside and let the market do what it needs to do. The endless interventions over the years will have done far more harm than good in the end. Great points.

    Thanks again.
    Jul 31 10:54 PM | 4 Likes Like |Link to Comment
  • Why Thursday's Sell-Off Matters [View article]
    Hello all,

    Thanks for your comments. I'm joining this thread on the discussion on UTX, as this is name that I have owned over the years in the past and did some additional research in recent days given its recent price movement.

    TakeFive and al roman - What is the upside/downside you are seeing from here on UTX following the -12.5% pullback from early June highs?

    Interested to hear your perspectives. Thanks again.
    Jul 31 10:51 PM | 1 Like Like |Link to Comment
  • Why Thursday's Sell-Off Matters [View article]
    Hello utah72 - Well said - Thanks!
    Jul 31 10:41 PM | 1 Like Like |Link to Comment
  • Why Thursday's Sell-Off Matters [View article]
    Hi Apple Diner,

    Very good point. Of course, it doesn't matter to us longs until these sell-offs start to accumulate into something bigger. And if they last long enough, they can eventually lead to great buying opportunities too. Thanks for the comment and the good point.
    Jul 31 10:41 PM | 3 Likes Like |Link to Comment
  • Why Thursday's Sell-Off Matters [View article]
    Hi Harm,

    Thanks for your comment and I agree with your underlying points. Pitchforks should remain securely locked away in the shed and investors should remain calm despite what happened today. But just as we do in upward trending markets, it is worthwhile to explore what forces might be at work underneath the market surface when a notable and sudden change in direction takes place. Of course, some readers will find this information more worthwhile than others, and I appreciate you sharing your views on that point. As for any sell off that might follow, I agree completely that investors should get excited about corrections because they bring opportunity, although I wouldn't necessarily describe a -15% decline as a plunge into the dark abyss. But it would provide a healthy cleansing for a market that has been running hot since the beginning of 2013.

    Thanks again for your comment and some good points.
    Jul 31 10:39 PM | 2 Likes Like |Link to Comment
  • Why Thursday's Sell-Off Matters [View article]
    Hello DGJ,

    Thanks for your comment and I too would welcome a correction, as I think it would be very good for the long-term health of the market. As for how low we go - this market has been so resilient in the face of danger over the last 18 months that I suspect some among those that drive the markets will be looking to aggressively buy the dip sooner rather than later, although much depends on exactly what underneath the surface was driving the sell off today. Liquidation forces can turn ugly and persistent fairly quickly, although one day does not a trend make. So it will be interesting to see in the next few trading days.

    Thanks again for your comment.
    Jul 31 10:33 PM | 4 Likes Like |Link to Comment
  • Why Thursday's Sell-Off Matters [View article]
    Hello Buyandhold 2012 and everyone else on this comment thread,

    Great points across the board. I am planning a DGI related article in the coming days and Buyandhold 2012 makes a number of great points, particularly about the enthusiasm associated with buying opportunities presented from a market that is selling off.

    As for particular names, I am currently long a number of names mentioned in this thread and spent a fair amount of time considering several others that were mentioned here that I do not currently own. Excellent points by all.

    Thanks again!
    Jul 31 10:29 PM | 5 Likes Like |Link to Comment
  • Why Thursday's Sell-Off Matters [View article]
    Hi Jason,

    Thanks for your comment and great point on selected CEFs and munis, as you are absolutely right that they held up very well today. Great point and I agree that hopefully macro risks will remain in check.

    Thanks again!
    Jul 31 10:26 PM | 5 Likes Like |Link to Comment
  • The Way Of The Bull And The Bear [View article]
    Hello Macro Investor,

    Thanks for your reply. I completely agree with your points about stocks as they relate to big institutions and HFTs. Really well said. I think this lack of control and outsider status is playing a part in what may be making some investors nervous right now given that these are forces that are out of the control of the individual investor.

    And your points about bearishness as it relates Fed are also excellent, as I also agree that the Fed is has been a major driver of market returns for many years now. I am open to the fact that Yellen may be more pragmatic and open minded with her dovishness than she is known for, as the Yellen Fed has seemed steadfast in their tapering course despite having numerous opportunities to scale it back given the recent economic data.

    Lastly, your point about the VIX is also spot on in my opinion. I'm assuming your referring to Khanna's article, which I've provided a link to below. I think that he is right that the fact that the VIX is low is simply not enough to predict an impending major correction. To your point, we saw the VIX languish in the current 9 to 15 range for two years from early 2005 to early 2007 before the market began to correct in mid 2007. I think the following statement in Khanna's article summed it up best.

    "Most serious market watchers use the VIX in combination with other technical indicators to measure the severity of any pullback."

    Thanks for sharing your thoughts and perspectives. You make a variety of excellent points here.
    Jun 28 08:18 AM | 1 Like Like |Link to Comment
  • The Way Of The Bull And The Bear [View article]
    Hello Macro Investor,

    Thanks for your commentary on this article and others on SA. The point that you make here is well taken, and in a normal market environment I would be inclined to completely agree with you. But one of the characteristics of the bull market over the last five years is that the sentiment of the individual and small to mid-size institutional investor has mattered little in defining the characteristics and direction of the market. For example, we have seen the steady net outflow of hundreds of billions of dollars from domestic equity mutual funds and ETFs throughout the entire bull market, yet stocks have more than doubled to reach all time highs over the same time period. This among other things suggests that forces outside of the typical investor of which I am speaking in this article is leading us to the calm that we are seeing in today's market.

    Great point and thanks for raising it for discussion. Hope you are doing well.
    Jun 28 12:33 AM | Likes Like |Link to Comment
  • The Way Of The Bull And The Bear [View article]
    Hello jstratt - Thanks for your comment and for making a number of excellent points. Thanks again!
    Jun 28 12:26 AM | Likes Like |Link to Comment
  • The Way Of The Bull And The Bear [View article]
    Hello TimmiesRegular,

    Thanks as always for your comments both here as well as in the exchange with Barry North and Tack above.

    You raise a good question. I'm definitely not getting more bullish. Instead, I remain equally short-term bullish as long as the uptrend remains intact. But the fact that the market continues to rise, particularly in the face of increasingly poor economic data makes me increasingly intermediate-term bearish, as this ongoing rise only widens the disconnect between stock prices and underlying fundamentals.

    And you are right about the key question being exactly when does the market top out. Value is extremely hard to come by nowadays, and an argument could be made for the market to top on any given day. Stocks may face a challenge in July, but the policy environment remains sufficiently accomodative and volume sufficiently light that we could see a further drift sideways to higher into the later summer to early fall. How things play out in July will be particularly notable in this regard.

    Great questions and commentary as always. Thanks again.
    Jun 28 12:25 AM | 2 Likes Like |Link to Comment
  • The Way Of The Bull And The Bear [View article]
    Hello Thomas,

    Thanks as always for your comment. I appreciate it and hope that you are doing well.

    Thanks again.
    Jun 28 12:17 AM | Likes Like |Link to Comment
  • The Way Of The Bull And The Bear [View article]
    Hello mobyss,

    Thanks for your comment and for raising an important question. I've been writing on this topic over the last several months with a focus on a number of key signals to watch in this regard. At this point, technical analysis remains among the first lines of defense, as stocks have yet to meaningfully test any of the key support levels that would signal the beginning of the market reversing trend and starting to break down. And even after these support levels are first tested, a topping process typically takes place over the course of several months that involves numerous tests of both support and newly established resistance, the manner of which provides details on whether it is simply a pause in a continued uptrend or a definitive reversal. These are among topics that I plan on hitting in more granular detail in articles once the market finally arrives at this juncture. But you are right, the market can turn swiftly and violently, which highlights the importance of maintaining hedges in place even with the uptrend still solidly intact.

    Great comment. Thanks again.
    Jun 28 12:15 AM | 2 Likes Like |Link to Comment
  • The Way Of The Bull And The Bear [View article]
    Hello User 8202401,

    Thanks for your comment and I have shared your preference for utilities and staples for some time now. These also have tended to hold up better during the early stages of new bear markets, which also adds to the appeal.

    Thanks again.
    Jun 27 11:55 PM | Likes Like |Link to Comment
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