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Price Headley, CFA

 
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  • Market Outlook - Crude Oil's New Important Range
    Mon, Dec. 22 DIA, VXX, IWM 2 Comments

    Summary

    • Most of last week's economic numbers were fairly strong and went along with the Fed's slightly more optimistic viewpoint.
    • The S&P 500 rebounded strongly late in the week, but failed to overtake the 2075 area that was its recent ceiling.
    • Crude oil may have just created an important new support/resistance area that will determine the next big directional move in the commodity.
  • Market Outlook - Capitulation Or Acceleration?
    Mon, Dec. 15 DIA, IWM, QQQ Comment!

    Summary

    • Last week was the worst net weekly move in the broad market since August 2011.
    • On the economic data, the consumer is fine while lack of inflation is a concern. The Fed announcement this week may have an impact.
    • There are some aspects of last week's stock market action that look capitulatory. However, any bounce needs to regain support and reverse indicators, or we could head back lower.
  • Market Outlook - Can The Nasdaq Comp And Russell 2k Give The Next Boost?
    Mon, Dec. 8 DIA, IWM, QQQ 1 Comment

    Summary

    • The jobs numbers last week were better than expected, but when you delve in they are perhaps not as good as the headlines implied.
    • Market trends remain bullish, but a somewhat complacent VIX and SPX not clearly moving above key levels are a concern.
    • The Nasdaq Composite and Russell 2000 could be gearing up to breathe new life into the broad stock rally.
  • Market Outlook - Grinding Higher Economy And Stocks
    Mon, Dec. 1 DIA, IWM, IYZ 1 Comment

    Summary

    • Economic data last week was on the whole mildly positive, continuing the recent trends.
    • Stock market momentum remains bullish, but has slowed a bit recently.
    • The Dow Jones Telecom Index has an interesting long term setup currently.
  • Market Outlook - Oil And Dollar At Crucial Long-Term Areas
    Mon, Nov. 24 UUP, DIA, VXX 2 Comments

    Summary

    • The overall trend for stocks remains positive, for the time being. The Fed was basically a non-event, it was Chinese & European stimulus that moved markets last week.
    • Economic data last week was mostly good, basically a continuation of trends in Industrial Production, Real Estate and Inflation.
    • Crude Oil & the Dollar Index have reached important long-term support & resistance areas, respectively. While the trends haven't reversed yet, this definitely bears watching here.
  • Market Outlook - Small But Growing Reasons To Be Concerned Here
    Mon, Nov. 17 DIA, IWM, QQQ 3 Comments

    Summary

    • The real story last week was the incredibly quiet, flat broad stock market action.
    • The overall picture remains bullish, but we're growingly concerned about flattening momentum, low upside volume and valuations, among other factors.
    • Among this week's economic reports, keep an eye on Capacity Utilization & Industrial Productivity -- there's been a correlation between those figures growing and the long-term bull market..
  • Market Outlook - Where We Stand Now After The Volatility
    Mon, Nov. 10 DIA, IWM, QQQ 3 Comments

    Summary

    • The October employment numbers were encouraging, even when you delve under the surface of them.
    • The market is grinding higher amid low volumes, there are key levels to watch both overhead and below current levels.
    • Valuation is still a concern in the long-term big picture -- a 12% to 13% gain for the broad market over the next year is pushing it, valuation-wise.
  • Market Outlook - Biggest 2 Week Gain Since 2009
    Mon, Nov. 3 DIA, IWM, QQQ 2 Comments

    Summary

    • The last time the S&P 500 advanced 7% in two calendar weeks was in July of 2009. That gain was in the very early stages of the bull market though.
    • It's been quite a roller coaster ride recently, but the bigger trend remains bullish. Valuations are getting stretched though, and another pullback wouldn't be surprising.
    • GDP & Consumer Sentiment data last week was strong. Unemployment data is upcoming for this Friday and will be widely followed.
  • Market Outlook - Positive Momentum, Overhead Resistance And Valuations
    Mon, Oct. 27 DIA, IWM, QQQ 3 Comments

    Summary

    • The 'V' shaped bottom has already reversed much of the recent losses in the broad market.
    • However, there is now overhead resistance to worry about, as well as the fact that the VIX remains relatively elevated, which shows option traders remain somewhat concerned.
    • In the big picture, the long term trend is still bullish, but valuations are becoming a concern again here at the higher levels.
  • Market Outlook - Will The Bounce Have Legs?
    Mon, Oct. 20 DIA, IWM, QQQ 2 Comments

    Summary

    • Amid all the volatility, the US economic data last week (Retail Sales, Industrial Production / Capacity Utilization, Housing Starts) was actually fairly strong.
    • A near-term bounce in the broad market looks likely, but we're concerned about overhead resistance it would then face.
    • We're heading into what is normally a seasonally-bullish time of year, but things are still rather precarious here and caution is warranted going forward.
  • Market Outlook - Can The 200-Day Moving Average Halt The Downtrend?
    Mon, Oct. 13 DIA, IWM, QQQ 8 Comments

    Summary

    • Not only was last week the worst week we've seen for stocks all year, it was the worst week we've seen since May of 2012.
    • While Fed Minutes this week were dovish to be sure, they were unable to halt to the resumption of selling in stocks.
    • We ended around the 200-day moving average on the S&P 500 - that area will be key over the coming days/weeks. If we rebound, watch SPX 1965 on upside.
  • Market Outlook - Morning Star Vs. Death Cross
    Mon, Oct. 6 VXX, DIA, IWM 6 Comments

    Summary

    • The actual unemployment rate dip last week may have been a bit exaggerated by the fact that the total labor force somehow fell by nearly 100,000 people.
    • Ever heard of a "Morning Star" Japanese Candlestick chart pattern? Well, Wednesday, Thursday, and Friday were almost a textbook example of a bullish morning star on the SPX.
    • Weakness on the long-term Russell 2000 chart is still a major concern, as this index tends to lead the market both up and down.
  • Weekly Market Outlook - Warning Alarm Or Healthy Pullback?
    Mon, Sep. 29 DIA, QQQ, IWM 2 Comments

    Summary

    • The market breached into cautious territory last week for the first time since early/mid August on our combined Daily/Weekly mechanical perspective.
    • There is good reason to be a bit worried here about further downside in the broad stock market, but similar pullbacks have been contained in 2014.
    • The NASDAQ Volatility Index is around a key level, and the 50 day moving average on the S&P 500 Index is also important here.
  • Market Outlook: Long-Term Uptrend Remains Intact
    Mon, Sep. 22 DIA, IWM, VXX 2 Comments

    Summary

    • Yellen's stimulative policies are going to continue for quite some time -- and the economic data seen last week seems to back her dovish approach.
    • While the S&P 500 made another new high, the Nasdaq Composite is again bumping up against resistance.
    • A bearish outlook for stocks may have some merit short-term, but longer-term the picture remains bullish until proven otherwise.
  • Market Outlook - Nasdaq Concerns
    Tue, Sep. 16 DIA, IWM, QQQ 1 Comment

    Summary

    • Monday's loss may not have been a big one, but it certainly wasn't an encouraging step in the right direction following last week's dip.
    • The most alarming red flag is the NASDAQ Composite's short-term breakdown and a rise in the NASDAQ Volatility Index.
    • Remember that September and early October are generally weak periods for stocks, and the August rally may have further set up a calendar-based lull.
  • Market Outlook - Walking The High Wire
    Mon, Sep. 8 DIA, IWM, QQQ 5 Comments

    Summary

    • The jobs report last week was on the weak side of the spectrum; investors jumped in assuming the Federal Reserve was going to nip any problems in the bud.
    • While technical momentum for stocks remains overall bullish, the market has now gone 64 months without a correction of 10% more - one is overdue. And valuations aren't cheap currently.
    • However, the market has had a funny way of defying the odds for months at a time. Case in point: valuations in the 90s. The VIX can also remain low.
  • Market Outlook - Avoid Over-Exuberance As September Begins
    Tue, Sep. 2 DIA, IWM, VXX 7 Comments

    Summary

    • Based on nothing but momentum, it's tough to come to anything but a bullish conclusion after dissecting last week's market action.
    • Potential red flag is the Dow Jones Industrial Average failing to close at record highs last week. And a bull market that is stretched by historical standards.
    • September is, on average, the worst month of all for the NASDAQ Composite, and is also normally one of the worst for the S&P 500.
  • Market Outlook - Will Last Week's Breakout Stick?
    Mon, Aug. 25 DIA, IWM, QQQ 2 Comments

    Summary

    • Fed Chief Yellen soothed the market's worries about a quicker interest rate hike last week.
    • Real estate, consumer sentiment and estimated GDP numbers are on tap for this week.
    • The stock market broke above some key resistance last week. However the follow-through was weak and the upside momentum may be slowing.
  • Market Outlook - Walking A Fine Line Here
    Mon, Aug. 18 VXX, IWM, DIA 2 Comments

    Summary

    • Capacity utilization ramped up from 79.1% to 79.2%, while productivity grew by 0.4%. As long as these two data sets are rising, the country remains in state of economic expansion.
    • S&P 500 charts are something of a mixed bag, depending on the time frame, though more bullish than bearish.
    • NASDAQ Composite has also shown strength, but for a third time has butted up against a key resistance level.
  • Market Outlook - Bullish Undertones After Recent Weakness
    Mon, Aug. 11 DIA, IWM, QQQ Comment!

    Summary

    • Capacity utilization and productivity numbers don't have much impact on the market's near-term swing, but the correlation between then and the long-term market is uncanny. They've been pointing higher.
    • As has been the case four times before, the S&P 500 100-day moving average held firm again, stopping the downtrend (at least for now).
    • Bolstering the bullish argument is that the VIX seems to have hit a ceiling of its own around 17.3. However, Russell 2k and Nasdaq Composite underperformance is a concern.
  • Market Outlook - Valuation Trepidation
    Mon, Aug. 4 DIA, IWM, QQQ 2 Comments

    Summary

    • Back in late-2012 the market's trailing P/E was a reasonable 14.6. Now it's a frothier 17.6, and had been as high as 17.7 at one point last month.
    • Since late-2011, the P/E ratio has somehow managed to rise because stocks have ascended faster than earnings have - that's a dangerous situation.
    • The S&P 500 broke under its key 50-day moving average line at 1953 for the first time since April.
  • Market Outlook - Busy Week On Tap
    Mon, Jul. 28 DIA, IWM, QQQ 1 Comment

    Summary

    • Beyond earnings reports, this week is going to be considerably busier in terms of economic numbers (Consumer Confidence, GDP, Employment).
    • If the market does pull back further, there are key SPX moving averages and Fibonacci retracement levels that are converging here and should provide support down below.
    • The VIX has yet to even surpass the key 13.3 level, indicating option traders aren't overly concerned about the market at this point.
  • Market Outlook - SPX 20 Day Moving Average Violated
    Mon, Jul. 21 DIA, IWM, QQQ 2 Comments

    Summary

    • Last Thursday's plunge led to the first close on the S&P 500 Index below the 20-day moving average lines since May.
    • The CBOE Volatility Index VIX was a pretty clear mirror image of the S&P 500 last week, surging on Thursday, but peeling back on Friday.
    • While the charts and the rhetoric may imply the broad market is in "ok" shape, the reality is, Thursday's drubbing showed how vulnerable the market is at this point.
  • Market Outlook - Key SPX And VIX Levels To Watch
    Mon, Jul. 14 DIA, IWM, QQQ 1 Comment

    Summary

    • Amid earnings season, this week's most important economic data will likely be underappreciated...capacity utilization and industrial productivity. Economists are looking for progress on both fronts, data is released Wednesday.
    • Although the overbought S&P 500 Index lost ground last week, the key 20-day moving average line at 1961.28 is still acting as a floor.
    • The CBOE Volatility Index is facing a key hurdle at 13.0. A move above the 13.0 level, in fact, would represent something of a paradigm shift for the VIX.
  • Market Outlook - This Rally Is Getting A Bit Steep
    Mon, Jul. 7 DIA, IWM, QQQ 10 Comments

    Summary

    • Employment data last week was good, not great. This week doesn't hold much other than the Fed minutes release and the beginning of earnings reports.
    • This current twelve-week, 9.3% runup in the S&P 500 is an unusually large and unusually long advance.
    • The SPX is now 8.4% above the 200-day moving average line, and the CBOE Volatility Index closed at a multi-year low of 10.30 on Thursday.
  • Market Outlook - Nasdaq Hits Multi-Year Highs Amid A Risky Environment
    Mon, Jun. 30 DIA, IWM, VXX 1 Comment

    Summary

    • The economic data released last week was overall very good, with the exception of Q1 GDP.
    • The VIX and S&P 500 P/E ratio are nearing dangerous valuations, but at the same time the Nasdaq Composite just broke through to new highs.
    • Just because the market's overdue for a dip doesn't mean we're guaranteed to see it soon. Assume the trend currently in motion will remain in motion until proven otherwise.
  • Market Outlook - Is The Market Melting Up?
    Mon, Jun. 23 DIA, IWM, QQQ 5 Comments

    Summary

    • The broad stock market momentum is attractive, it may even constitute a dangerous meltup. The near-term SPX ceiling is the 2000 level.
    • The market loves to use big round numbers as floors and ceilings, and a move to 2000 on the S&P 500 would mean a 7% gain since mid-May.
    • On the NASDAQ Composite, a near-term problem is that the index has once again stalled at 4372, like it did in early March.
  • Market Outlook - No Signs Of Impending Doom
    Mon, Jun. 16 DIA, IWM, QQQ 4 Comments

    Summary

    • We've yet to see any signs of impending doom here. In fact, the S&P 500 could slide all the way back to the floor around 1900 without technically snapping the uptrend.
    • A possible red flag is the way the NASDAQ's volatility index, the VXN, has already tested a key floor at 12.70.
    • Stocks are trapped in that vexing no-man's land where they're too overbought to go higher but too well-supported to move any lower.
  • Market Outlook: Valuations Continue Higher Amid A Very Low VIX
    Mon, Jun. 9 DIA, IWM, QQQ 2 Comments

    Summary

    • It's the fourth month in a row we've seen more than 200,000 new jobs created. We haven't seen that long of a growth streak since 1999.
    • From a momentum standpoint, the bulls are clearly in charge right now. From a being-realistic standpoint, however, the market is being asked to do something from here that is difficult.
    • As of right now, the S&P 500 is trading at a trailing P/E of 17.4. That's as high as it's been in a 'normal' environment in years.
  • Market Outlook: Calendar Axiom Broken, But Valuations Are A Concern
    Mon, Jun. 2 DIA, IWM, QQQ Comment!

    Summary

    • After two months of trying, the S&P 500 finally cleared the hurdle at 1900 last week to close at 1923.57.
    • Equally encouraging (perhaps even more encouraging) is the way the NASDAQ Composite has also sprung back to life in the weekly time frame.
    • But remember the market generally doesn't make major moves in the spring or summer, and has been particularly reversal-prone of late - and rising P/E ratios are a concern.
  • Market Outlook - Finally A Breakout, But Caveats Remain
    Tue, May. 27 VXX, DIA, IWM 2 Comments

    Summary

    • This week will be much busier in terms of economic numbers -- durable goods, housing, consumer confidence.
    • After more than two months of little more than sideways movement, the S&P 500 finally closed above a major line in the sand at 1885 and 1897.
    • However, there are still multiple reasons to be concerned about the strength and duration of the current market rally.
  • Market Outlook - Red Flags Amid A Trading Range
    Sun, May. 18 SPY 4 Comments

    Summary

    • Producer price and consumer inflation rates rose to levels not seen since 2012 and 2013, respectively. Also, we saw signs of a rebound on the real estate and construction front.
    • Both Industrial Productivity and Capacity Utilization fell, for the first time in a while. If May doles out another slide from these numbers, that could be a sign of trouble.
    • The market's floors and ceilings are very well defined, and have been proven multiple times. But there are red flags that suggest growing odds of a more significant pullback.