1565: What Will It Take To Make The Old S&P 500 Highs? [View article]
Yes, I am clueless. I just write these articles to fill the void of my empty life. And like to have other investors foolishly follow my advice.
Yes that was sarcasm.
Perhaps the Fed is the primary cause as you set up. But the rest is all possible and logical extensions of that. Invest how you like, but dont be blind and insult what will likely be the case.
1565: What Will It Take To Make The Old S&P 500 Highs? [View article]
If I were to create a 5th reason for market to move up is exactly this point. That being that most investors are on the sidelines as it continues to move higher. This can be seen by low volume. Or by mutual fund flows that are still not good for stocks.
As headlines read: "Stocks Making Highs" and as more people feel left behind, then they will saunter up and buy more stocks. This can easily fuel stocks higher.
But most importantly it is about the fundamentals. If they stay on track, the rest will naturally unfold.
5 Reasons U.S. Stocks Could Soar, If ... [View article]
You link to an article from ECRI from last September. We are now 9 months past that with no recession in sight. So this can be written off as a bad call.
Simply if Europe implodes there will be a global slowdown. The odds on implosion are low. More likley they contain their problems with more and more debt (kicking the can down the road). This will lead to mild to medium recession in Europe which will have very little effect on the US economy.
They Don't Ring A Bell At The Bottom [View article]
Thanks sethmcs- I still write actively on Zacks.com, but dont always remember to port over my articles to SA. Will try to do so more often in the future.
1565: What It Will Take To Hit Old Highs [View article]
Rock_nj: Yes oil prices would be a 5th key factor. I have read research that says we are fine up to about $140 per barrel. Above that for a prolonged period of time is likely too heavy a burden on the US and world economy. Meaning a serious slowdown and possible recession.
The Germans do not have their own currency. They have the Euro which is shared with 16 other countries. Because the rest of the countries are weak in comparison to Germany, it makes the Euro weaker than a German only currency would be. This benefits Germany because they get to export their goods to other countries with a lower price tag than it would be if it was in their own currency. That is a big part of their economic success over the last several years. And that would be hard to give up.
It is believed that Germany has enough resources by themselves to handle this if they really want. I hope for very little if any US involvement. More likely just encouragement from the sidelines.
borisb- If you think there is a bullish outcome, then cyclicals are a great bet to get upside. Coal is fine in that camp. Other natural resources will also do well.
However, if europe blows up, then recessions unfold and cyclicals are going to get killed.
mrxg4- You make great points. And that is part of the nuiance of my strategy that just didnt fit into the article. When we breakout in either direction, then it would be silly to go 100% long or 100% short in the blink of an eye. Baby steps at first to make sure it holds together (unlike the times you mention). And then keep rolling in that direction if it continues.
The funny thing is that I am 99% a fundamental investor. So for me to wholly rely upon technicals to tell me what to do is not accurate. Certainly I would need some greater fundamental conviction to take those steps. If just technicals alone, then I would be more reticent to follow the breakout.
I think they will do their best to keep it all together. Maybe just toss out someone like Greece as a warning to all others. So keeping 16 together is not too much of a calamity.
Note I suspect Europe will go through a recession no matter what given all the austerity measures coming online. But a mild recession is not a problem. It is an implosion leading to euro-depression leading to US recession that is the main concern. Hopefully that can be avoided.
skwestorange- We have been locked in this basic range since early August. So its already been a surprisingly long time. Truly its anyones guess, but if I took a stab at it, I would say by the end of January.
4 Reasons Stocks Will Make New Highs [View article]
Robin- I still pop by SA every now and then. But since I started writing a 2nd newsletter for Zacks, I havent been posting as much to SA.
Yes, I turned bearish in early August. The sentiment #s were so bad that is smelled like a recession. However, real economic activity has not come down with sentiment. Very unusual. So Q3 will certainly be a good quarter for GDP as we can see with corporate earnings. However, Europe is the wild card. If they contain the problem, then bullish is the right play. If not, then we go sideways until it is solved or implodes.
Honestly, I dont know which it will be. So I keep trading up and down in the range for now.
4 Reasons Stocks Will Make New Highs [View article]
glbcpa- In reality I am saying both. Right now stocks are undervalued. So if new money enters the market, then prices will go up and so will valuation go up as well (or the PE paid for each unit of earnings).
But the key for current buyers is that when new buyers come in the market then share prices will go higher.
1565: What Will It Take To Make The Old S&P 500 Highs? [View article]
Yes that was sarcasm.
Perhaps the Fed is the primary cause as you set up. But the rest is all possible and logical extensions of that. Invest how you like, but dont be blind and insult what will likely be the case.
1565: What Will It Take To Make The Old S&P 500 Highs? [View article]
Some asset class.
Some direction (up or down)
You just have to look for the fundamental case for what will likely happen, then put your money into that. But "not bothering" is not an option.
1565: What Will It Take To Make The Old S&P 500 Highs? [View article]
As headlines read: "Stocks Making Highs" and as more people feel left behind, then they will saunter up and buy more stocks. This can easily fuel stocks higher.
But most importantly it is about the fundamentals. If they stay on track, the rest will naturally unfold.
5 Reasons U.S. Stocks Could Soar, If ... [View article]
Simply if Europe implodes there will be a global slowdown. The odds on implosion are low. More likley they contain their problems with more and more debt (kicking the can down the road). This will lead to mild to medium recession in Europe which will have very little effect on the US economy.
They Don't Ring A Bell At The Bottom [View article]
Best,
Steve
1565: What It Will Take To Hit Old Highs [View article]
1565: What It Will Take To Hit Old Highs [View article]
Steve
Why I Am 0% Long Stocks [View article]
Why I Am 0% Long Stocks [View article]
Steve
Why I Am 0% Long Stocks [View article]
However, if europe blows up, then recessions unfold and cyclicals are going to get killed.
Place your bets accordingly.
Steve
Why I Am 0% Long Stocks [View article]
The funny thing is that I am 99% a fundamental investor. So for me to wholly rely upon technicals to tell me what to do is not accurate. Certainly I would need some greater fundamental conviction to take those steps. If just technicals alone, then I would be more reticent to follow the breakout.
Best,
Steve
Why I Am 0% Long Stocks [View article]
Note I suspect Europe will go through a recession no matter what given all the austerity measures coming online. But a mild recession is not a problem. It is an implosion leading to euro-depression leading to US recession that is the main concern. Hopefully that can be avoided.
Best,
Steve
Why I Am 0% Long Stocks [View article]
Best,
Steve
4 Reasons Stocks Will Make New Highs [View article]
Yes, I turned bearish in early August. The sentiment #s were so bad that is smelled like a recession. However, real economic activity has not come down with sentiment. Very unusual. So Q3 will certainly be a good quarter for GDP as we can see with corporate earnings. However, Europe is the wild card. If they contain the problem, then bullish is the right play. If not, then we go sideways until it is solved or implodes.
Honestly, I dont know which it will be. So I keep trading up and down in the range for now.
Best,
Steve
4 Reasons Stocks Will Make New Highs [View article]
But the key for current buyers is that when new buyers come in the market then share prices will go higher.
Best,
Steve