Last week the much anticipated Robinhood IPO and several high-profile earnings announcements revealed a lot about investor sentiment and what to expect for market’s trend going forward. First, the Robinhood IPO had the potential to create an obvious indicator of a market top considering… It has created a movement that has enabled and enflamed the belief that the stock market was an easy ticket to riches in a generation of new market participants that are
July often sets up conditions for late summer rallies, as well as significant tops. As a result, July can be a frustrating and confusing period. Last week was a good example of why. I’ll start with the bearish case… #1) The market’s price action coming into last week set up the market indexes for a weak Monday, and weekend reports of rapidly increasing (and breakthrough cases) of the Covid Delta variant provided the news for
The recent runup to new highs in both the S&P 500 and the Nasdaq 100 came to an abrupt halt this week, and our Risk Gauges flipped negative in short order. It is also important to note the selloff in the SPY is not overdone and has a lot more potential downside. Even more critically, IWM looks extremely vulnerable, which is testing a well-formed valid 6-month trendline that has helped keep the rally intact. If
Both the S&P500 and the NASDAQ l00 continued their leadership by hitting new All-time highs while Grandpa Russell (IWM) continues to lag. Market Cap heavy FANG stocks are masking poor market internals and the Modern Family is showing lackluster relative performance. However, overall, good volume, record money inflows with positive price action is still the narrative…. Meanwhile, KRE (Regional Banks aka the Prodigal Son) had monster performance on Friday which could indicate that the recent
It is a very strange market… Small Caps (otherwise known around MarketGauge as Grandpa Russell) were down almost -1.34% for the week, bucking the new all-time highs in both the QQQ’s which was up + 2.6%, and the SPY which was plus 1.67%. Growth stocks continued leading the charge. What is interesting is that despite the stellar performance by the SPY and growth stocks, is that market internals barely budged. They remained neutral. This indicates
Equities had a banner week with both the S&P 500 and the NASDAQ 100 hitting new highs, however under the hood we are getting a mixed message. Since the beginning of the year, we have seen strange, new trends emerging in both traditional and alternative markets. Cryptocurrencies have been dominating the news cycle since last September, and ‘Meme’ stocks have emerged from the retail collectivism that has transferred from the crypto market to stocks. However,
This week we heard from the Federal Reserve that there will be no change in the guidance for monetary policy in the immediate future. Rates will remain low for the time being, and by low, I mean near zero. This excessively cheap monetary environment allows debt to be created with virtually no end in sight. This easy money policy is responsible for the potential hyperactive spike in inflation. We are seeing prices rise across the
The recent runup in Meme stocks pushed by the Reddit crowd has turned Wall Street upside down and is something to sit up and take notice of. Many pros consider the recent price action a silly phenomena to be dismissed, but we think the opposite. Very recently, the Reddit crowd bought a lot of AMC, forcing shorts to cover, which drove AMC from about 14 to 70 in the past few weeks. That’s not a
In May the employment report was the biggest job creation miss below expectations ever. Stocks responded by rallying to new highs. Bonds also rallied. That Friday also set all-time closing highs in the SPY and DIA that hadn’t been eclipsed until yesterday. Yesterday, the employment data came in shy of expectations again. Again, stocks and bonds rallied leaving the SPY and DIA at virtually the same all-time closing high level as the last month’s report.
The Chinese Yuan hit a multi-year high last week vs. the US dollar, which means the dollar slid to a multi-year low. Remarkably and embarrassingly, this was hardly noticed or mentioned on mainstream media. Considering that the US national debt is over $27 trillion, which is the highest debt levels verses its GDP ever, and the Chinese are the second largest foreign holder (behind Japan)… This is something worth watching. At some point we will