The Daily Decision for 2.13.18 - What's Next? History Suggests...


The State of the Markets:

One of my favorite jokes about Wall Street goes something like this: The first time something happens on Wall Street, it's called it a trend. If it happens twice in a row, it's a tradition. And if it happens three times in a row, well, it's darned near a commandment!

I guess it is good news then that stocks managed to close higher for a second consecutive session on Monday. It is also good news that stocks appear to be in "bounce" mode - aka phase two of the crash playbook. And on that score, technicians are saying it is good news that the S&P bounced off its 200-day moving average on Friday and as such, the low of the move is "in."

Given (a) the extent of the decline and (b) the dearth of any news or real fundamental support for the big dive, this argument would seem to have some merit. While Ms. Market can and often does do anything she darn well pleases, it was kind of difficult to justify a 12% decline from top to bottom based on the idea that rates and inflation might rise a little faster than expected.

Therefore, one can easily argue that the successful tests of the 200-day on an intraday basis and the 150-day on a closing basis means that it's time to go the other way for a while.

Speaking of bouncing at key technical levels, it was reported that Friday's timely reversal may have been aided by a report from an influential quant over at JPMorgan. Known as "Gandalf" the analyst suggested the selling attributed to volatility trading and strategies involving volatility targeting (such as risk parity and the like), had run its course. As such, traders had the ...

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The Daily Decision for 2.12.18 - The Biggest Change Seen Last Week Was...


The State of the Markets:

I like to start each week by reviewing (a) my key market indicators and (b) the macro picture of the current market environment. As such, my Monday morning market missive is intended to cover both ...

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The Daily Decision for 2.9.18 - Is This Really About Rates?


The State of the Markets:

I usually don't write on Friday mornings. However, with the Dow experiencing its second quadruple-digit dance to the downside of the week yesterday, I figured it was probably time to make an exception.

The ...

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The Daily Decision for 2.6.18 - What is Real and What is Artificial?


The State of the Markets:

During times of market stress, one of the biggest challenges is trying to determine what is real and what is artificial.

When markets spike - in either direction - there is usually some sort of a news ...

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The Daily Decision - FOMO Has Taken Over - For Good Reason?


The State of the Markets:

As we enter the final week of what is turning out to be the best January since 1989, the macro drivers of the market remain the same. Cutting to the chase, investors continue to look ...

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The Daily Decision for 1.22.18 - No Time To Be a Hero


The State of the Markets:

To review, my first report each week is intended to take a big-picture, macro view of the overall market environment. The idea is to start the week with what we hope will be a solid ...

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The Daily Decision for 1.18.18 - The New Market Narrative: Dilly Dilly!


The State of the Markets:

Bearish reversal? What bearish reversal? It turns out that Wednesday's market narrative made a mockery of Tuesday's hand wringing relating to a potential government shut down and the end of QE as we ...

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The Daily Decision for 1.17.18 - Did Something Just Crawl Out Of The Woodwork?


The State of the Markets:

And we're back... After months of little to no volatility, the bears got back into the game yesterday, putting on a pretty decent show on the first day of the week's trade.

Stocks ...

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The Daily Decision for 1.16.18 - Bulls May Need To Slow Their Roll


The State of the Markets:

The bulls encountered a bit of a challenge early last week, but by Friday appeared to be none the worse for wear as the rip-snorting bull run of 2018 continued unabated.

However, at least on ...

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The Daily Decision for 1.11.18 - Bond Panic May Be Fake News


The State of the Markets:

After moving to within a whisker of the 2.6% level (2.595% to be exact) yesterday, the yield on the U.S. Government's 10-Year Treasury pulled back in the afternoon and closed at ...

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The Daily Decision for 1.10.18 - Are Bonds Crossing the Line in the Sand?


The State of the Markets:

When stocks enter what I like to call "melt up" mode, everything is right with the world. The economic data is strong. Earnings are fantastic. Inflation is low. Consumers are happy and shopping. Employers are ...

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The Daily Decisions for 1.8.18 - Bulls On The Run


2018 YTD Performance Update:
DD TRADING Model: +3.2%
DD LEADERS MOdel: +2.8%
S&P 500: +2.6%


The State of the Market:

With the S&P 500 up 2.6% so far in 2018, it appears that, barring an unforeseen ...

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