Seeking Alpha

Marc Chaikin's  Instablog

Marc Chaikin
Send Message
After more than 40 years on Wall Street, Marc Chaikin founded Chaikin Analytics LLC in 2009 to deliver proven stock analytics to financial service professionals and individual investors. With the Chaikin Power Gauge, an alpha-generating quantitative model as its centerpiece, Chaikin Analytics... More
My company:
Chaikin Analytics LLC
My blog:
Chaikin Power Gauge Stock Rating Blog
View Marc Chaikin's Instablogs on:
  • Why Having A Strategy Is Critical For Surviving A Bear Market

    With the Bull market more than 2200 days old, with S&P 500 earnings projections for the first-half of 2015 shrinking and with the Federal Reserve potentially raising interest rates as soon as June, investors are legitimately concerned that a long overdue market correction (i.e. 15% - 20%) might not be too far off. While there's no sure fire way to tell, times like this warrant a disciplined approach to managing one's portfolio.

    While most advisors suggest switching into defensive areas, buying some form of downside protection, or shifting a portion of the funds into bonds (or some combination of the three), the key to weathering a market downturn is making sure the stocks in your portfolio are sound, both fundamentally and technically.

    The challenge for self-directed investors is how to accomplish that task against the backdrop of limited time, resources and expertise. The answer is to incorporate an unbiased, back-tested, quantitative model that provides clear, concise analysis of a stock, group or sector. The model should not only identify when a stock needs to be removed from the portfolio, but also offer replacement candidates with healthier fundamental and technical credentials.

    One of the keys to achieving positive relative performance during a significant market downturn is active portfolio management. Investors must periodically reassess stock holdings

    and make changes when warranted. Chaikin Analytics alerts investors to potential land mines by filtering stocks through a 20-factor quantitative model, which often exposes fundamental and/or technical weakness before a major price decline occurs. The model (which computes a Power Gauge Rating for every stock) also makes it easy to monitor an entire Industry, so that any deterioration within a stock's peer group can be identified ahead of the curve.

    The Chaikin Relative Price Strength indicator, by combining "persistence of relative performance" with traditional relative strength measures, pinpoints shifts in psychology in stocks early enough to enable investors to sell before major price declines.

    For self-directed investors, having a back-tested, easy to use system that provides a solid framework for active portfolio management is critical to avoiding the landmines that typically surface during Bear markets and ultimately destroy performance. Risk management is mandatory for successful investing. Don't let the tide bring you down with it.

    Mar 25 5:00 PM | Link | Comment!
  • Market Rallies To New Highs After Fed Walks A Fine Line- Chaikin Market Insights

    Stock market tips by Marc Chaikin

    March 23, 2015

    Market Rallies to New Highs After Fed Walks a Fine Line

    The S&P 500 Index closed on Friday at 2,108.10, up 2.66% on the week. The small and mid-cap stocks built on the previous week's strength and made new bull market highs, while continuing to outperform the large cap stocks that have more exposure to a strong U.S. dollar.

    Janet Yellen once again proved that she can walk the tightrope that the stock market responds well to. While removing the word "patient" from the Fed statement, after their 2 day meeting, she somehow managed to assuage the bulls by suggesting that the metrics were not yet in place for an interest rate hike.

    As we said last week focusing on this verbiage is a distraction, with the market's strong rally putting pressure on the bears who so desperately need help.

    Crude oil prices seem to have settled into a trading range in spite of the continued build up in U.S. oil reserves. The Energy Sector continues to perform poorly and bottom fishers: proceed at your own peril.

    Finally, yields on the 10-year Treasury bond dropped back under 2%, encouraging buyers into higher yielding common stocks, including the battered Utility Sector.

    Where Do We Go From Here?

    The positive reaction to the Federal Reserve Board statement pushed the S&P 500 above 2,100, very near its bull market peak. The action of the small and mid-cap stocks and the Nasdaq Composite, which all made new highs, suggests a positive attitude for stocks, even as bullish sentiment as measured by the AAII survey dropped for the 4th straight week.

    While we may run into resistance 2% above current levels, there is

    nothing to suggest that the bull market is in trouble. If it is true that bull markets climb a wall of worry or skepticism, then we are still on target for a strong 2015.

    The economic data reports have been soft, perhaps because of the frigid weather in the Eastern half of the U.S., and analysts continue to lower their earnings estimates for the S&P 500 companies. With 3 weeks until 1st quarter earnings will take center stage, expect further advances in stock prices.

    Use pullbacks of 1 ½ - 3 days to buy strong Chaikin Power Gauge stocks in the Health Care, Consumer Discretionary and Financial Sectors.

    Click here for more stock market ideas and analysis from Marc Chaikin.

    Disclaimer: Chaikin Analytics LLC is not registered as a securities broker-dealer or advisor either with the U.S. Securities and Exchange Commission or with any state securities regulatory authority. Chaikin Analytics does not recommend the purchase of any stock or advise on the suitability of any trade. The information presented is generic in nature and is not to be construed as an endorsement, recommendation, advice or any offer or solicitation to buy or sell securities of any kind, but solely as information requiring further research as to suitability, accuracy and appropriateness.

    Users bear sole responsibility for their own stock research and decisions. Read the entire disclaimer.

    © 2015 Chaikin Analytics, LLC. All rights reserved.

    Mar 24 7:38 PM | Link | Comment!
  • Chaikin Stock Market Insights: Patience Is A Virtue, Especially In The Upcoming Fed Announcement

    March 16, 2015

    Weekly Stock Market Tips and Analysis by Marc Chaikin

    Patience is a Virtue, Especially in the Upcoming Fed Announcement

    The S&P 500 Index closed on Friday at 2,053.40, down 0.86% on the week. The small and mid-cap stocks were up on the week, indicating an appetite on the part of investors for the riskier segments of the market, and the ones with less exposure to the very strong U.S. dollar.

    The market is focused on three things right now:

    o The price of crude oil, which continues to drop

    o The continued strength of the U.S. dollar

    o The upcoming Federal Reserve Board Open Market Committee meeting and subsequent announcement

    The Fed watchers will be looking to see if the word "patient" is dropped from the Fed announcement, which will signal an earlier rise in U.S. interest rates. As we have said before, this is meaningless speculation and would actually be bullish for financial stocks that benefit from gently rising interest rates. Ignore this guessing game but realize that volatility will pick up.

    The price of West Texas Crude Oil (NYSE:WTI) dropped to a new 6 week low, but the market held together reasonably well, indicating a potential decoupling between crude prices and the stock market. The Baker Hughes drilling rig count continued its decline last week, but is now down 40% from its peak. This is a level that has indicated a possible low for crude prices. For that to happen, the vast build up in oil reserves here in the U.S. would have to stop, as this potential supply is weighing on crude prices.

    Finally the U.S. dollar has skyrocketed over 20% and that has spooked investors as the specter of global deflation and the impact on U.S. multi-national company earnings have been raised as a cause for concern regarding U.S. equities.

    Bond yields on U.S. 10 year treasuries have pulled back to 2.12% and that caused a rally in the beaten-down Utility stocks.

    How Does the Market Look Technically?

    The S&P 500 rallied off Wednesday's low of 2,040 but failed to penetrate resistance at 2,075-2,085. Friday's losses were pared in half, but the Index finished with a loss of .6% and was down for the 3rd week in a row. We are likely to see further selling early this week with strong support in the 2,000 - 2,025 area likely to contain any declines.

    Use short-term weakness to buy strong Chaikin Power Gauge stocks in the Financial, Consumer Discretionary and Health Care stocks. A positive reaction to the Federal Reserve announcement on Wednesday might just get the stock market moving back above 2,100.

    Use a close below 2,000, if it occurs, as an opportunity to get a bit more defensive in your trading and longer term portfolios.

    For more stock ideas and stock market analysis, subscribe to PowerSuite Premium, which includes Marc Chaikin's weekly stock market analysis, Market Insights.

    Themes: stock market , stocks , stock ideas

    Mar 16 4:40 PM | Link | Comment!
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.