Morning Comment: The Dollar Stands at a Key Technical Juncture

There is no question that the stock market continues to act will, but there is also no question that investor enthusiasm is waning as we approach the an all-time high in the S&P 500 Index. This lack of enthusiasm could easily just be a short-term phenomenon...but looking at the “internals” of the market, investors seem to be moving to the sidelines so that they can figure out whether the market can thrust higher once the S&P finally makes a new high. It’s hard to blame investors about being a bit nervous right now...given that the stock market has risen more than 50% in less than 5 months...and that the market has become quite expensive (at more than 20x 2021 earnings estimates).

So why are we saying that investors seem to be moving to the sidelines...and that the “internals” are not very good? First of all, volume has fallen dramatically over the past week (as the S&P has moved closer to its February highs). Over the past four trading days, the composite volume has averaged just 2.6bn shares...which is down 30% from its 3-month average. We’d also note that the volume in the QQQ’s yesterday was 50% lower than the average volume for this year. (It was also 35% below the average daily volume over the past four months.) Since the mega-cap tech names that have been so important to the rally off the March lows are so important to the QQQ’s, the drop in volume in this ETF on a day when it rallied over 1% is a signal that investor enthusiasm in waning a bit right now.

As for other aspects of the “internals,” the breadth during yesterday’s rally was quite poor. It was actually slightly negative for the S&P 500 and the NYSE Composite Index...and only very slightly ...

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THE WEEKLY TOP 10



We think it’s important to remind people from time to time that we always try to highlight issues from both sides of the bull/bear ledger each weekend. Therefore, some of our comments sometimes conflict with one another. However, we always ...

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Morning Comment: Congress won't care until the stock market starts to care.



The S&P did not quite close at an all time high yesterday, but it came about as close as it could without reaching that level on a closing basis...as it missed by only 5 points. In other words, the fact ...

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Morning Comment: Sharp short-term are not always fundamentally based.


We think that the action in the gold market yesterday...and the reasons being given for that move this morning...is a classic example of how Wall Street (stupidly) tries to give a fundamental reason for EVERY SINGLE move in the markets...even ...

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Morning Comment: Gold has become ripe for a short-term pull-back.


It was another low-volume/uneventful day yesterday...until about 2:30, when the stock market rallied strongly over the last hour and half. When you combine the 12 point gain in the S&P 500 this morning with the 20 point gain the futures ...

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Morning Comment: Narrow market...does it matter?


We had another nice day in the stock market yesterday as the tech sector continued to lead the way higher. It does not seem to matter that the rally is a very narrow one, but history tells us that it ...

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Morning Comment: Biggest Near-Term Risk? China.

There is no question that there are a lot of developments from around the globe that are fighting for the attention of the public (and investors) in the mainstream media. Whether it be the continuing Covid-19 crisis, the debate over ...

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THE WEEKLY TOP 10....The risk/reward equation has changed significantly



THE WEEKLY TOP 10


Table of Contents:

1) Is all of the good news already priced into the mega-cap techs over the near-term?

2) Some of the obvious froth in the market place is becoming ridiculous.

3) High yield is ...

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Morning Comment: An August Pull-Back Would Actually Be Healthy


It’s the last day of July and it seems like we’re setting up for an exciting August. In other words, those who are looking for the dog days of summer this year are going to be sorely disappointed. On the ...

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Morning Comment: A Second Warning Shot Across the Bow


It looks like we missed a very compelling week in the markets last week...as the S&P 500 looked like it was finally going to break out of its seven-week sideways range, but fell back within it by the end of ...

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THE WEEKLY TOP 10


I will be on vacation next week, so there will be not “Morning Comments” next week and no “Weekly Top 10” next weekend. Thank you very much.


THE WEEKLY TOP 10


Table of Contents:

1) Liquidity has still been the ...

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Morning Comment: Small-caps Trying to Breakout


Well our call last week that said investors should avoid Chinese stocks on a near-term basis because they had become EXTREMELY overbought has worked out quite well. The Shanghai Index fell 4.5% last night...and has declined 6.7% since we made ...

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