Inside The Stock Market ...trends, cross-currents, and outlook
Sector Ups and Downs During Bear Markets And Recoveries
Info Tech has demonstrated an ability to lead coming out of bear markets, but still not seeing overall GS Score strength in the sector.
October Panics: Plenty Of Facts, But No Explanations
Mark Twain observed more than a century ago that October represented a “peculiarly dangerous” month to speculate in stocks—with the other dangerous times including the remaining 11 months on the calendar.
Playing The Bounce 2008—Market Due For A Bounce In November
It may not be a very good “Playing The Bounce” year...
The Beginning Of The End.....Yes, We’re Talking About The Bear Market
September was a horrible month for the stock market, but now is not the time to be selling stocks. We believe a market bottom is close at hand, and this month’s “Inside The Stock Market” section presents several of our “big picture”, historical market studies to provide support for this belief.
Financial Crises: A Historical Perspective
Doug Ramsey examines the history of bank failures and prior liquidity crises (back to 1830) to demonstrate that this current financial meltdown is not unprecedented. The names have changed, but the economic and emotional responses have been loosely patterned over the entire time frame.
Technical Comment: No Worries Over “Dow Theory?"
Dow Theorists looking at current market environment may be concluding stocks could weaken further. However, historically when confirmation from the Transports takes an excessively long time to develop (like it has currently), the technical pattern has actually provided an excellent buy signal.
That Time Of Year For Tech??
We have found that technology has the strongest seasonal tendency of any sector during the market’s “bullish” seasonal period of November through April.
Playing The Bounce 2008 - Most Of The Market Due For A Bounce
October brings our annual exercise in the “Playing The Bounce” strategy. This month’s “Inside The Stock Market” presents the initial run of stocks which may be subject to heavy tax loss selling. Traditionally, these stocks may be poised to “bounce” back early in the next year as selling pressure wanes.
We're Bullish (And Hoping For “Small” Gains)
Improving cyclical leadership could be signaling that the bear market is in its final stages. In 10 of the 12 past bear markets, cyclical stocks turned up prior to the conclusion of the bear.
Crude Oil Regression Analysis
Analyst estimates for oil stock earnings never seem to fully capture the impact that the price of oil has on their earnings.
August Market Action
The broad market continued to trace out a labored recovery from the July lows, yet the day to day performance volatility continued to keep many market participants from getting too comfortable with the trend.
Context For Today's Financial Mess
Think we’ve never seen such turmoil in the financial sector? Back in 1986-1995, the S&L crisis wiped out about half of the federally insured thrifts (from 3234 to 1645).
Materials: From First To Worst
Materials sector has fallen fast and hard in our GS Score rankings and is now the worst rated. Still see further downside based on valuations and technical factors. No, we do not think the underlying commodities can outperform while the stocks fall.
Small Cap Outperformance: More Questions Than Answers
Small cap out performance so far in 2008 is baffling. Earnings growth has been weak relative to large caps and valuations are still excessive. Interestingly, EAFE Small Cap Index is underperforming, while its U.S. counterparts are doing well.
Yearning For Those Summer Doldrums...
In the past, Wall Street activity slowed in August as professionals headed for the beach. However, the “Hyper-connected Era” has changed all that, as evidenced by higher market volatility in recent years during July and August.
Commodity Curtain Call?
Inflation is peaking and the GS Scores did a great job signaling an exit from the Industrial Metals play. Commodities were hit hard in July.
A New "Internal" Low In Stocks: Implications
Price momentum now indicating there may still be one more leg down in this bear market. Typically, price lows come after momentum lows, and a new momentum low was hit in mid-July. Similar analysis of NYSE New Highs/New Lows data supports this conclusion.
What If We Don't Bottom Around Median Levels?
While we continue to believe in our market bottoming thesis, we thought it may be useful to examine those periods when the P/E ratios continued to fall to the 10x to 12x earnings levels.
Major Trend Fades To Neutral During June Massacre
Well, now it’s officially a bear market. But readers should realize that since bear markets typically decline 28%, the bear is likely at least two-thirds over.
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