Stock Market Is Overheated
Another Big Rally The stock market is starting to look overheated as it reversed Tuesday’s selloff on Wednesday, closing at a new bear market high. Stocks are due for a correction. CNN fear and greed index rose 5 points to 53. Neutral is the new extreme greed with the economy still in flux. There’s no reason…
Fund Managers Are Positioned All Wrong
Fund Managers Love Tech & Healthcare Bank of America fund manager survey tells us what we already knew. Fund managers love healthcare and tech stocks. As you can see from the chart below, the z score for healthcare is about 2.5 standard deviations above normal. That makes sense because biotech stocks are working on cures…
Wild Trading Action - S&P 500 Trading Like A Biotech Stock
Up & Down Action The stock market is back to trading like a micro-cap biotech stock as it exploded on positive early news on Moderna’s vaccine and then sold off the next day. It seems to be a trend. Whenever good news about a drug such as remdesivir comes out, the stock market explodes and…
Economy Is Coming Back
Break Up Big Tech? Everyone is all in on the big tech stocks. Companies that make up FAANMG which are Facebook, Apple, Amazon, Netflix, Microsoft, and Alphabet, were 23.4% of the S&P 500 as of May 14th. It’s very difficult to not like these businesses unless you are worried about regulatory issues. By far, the…
Record High Optimism From Small Traders
Smart Versus Dumb Money If you’ve been trading for a significant period, you may have noticed that short theses sound smarter than long ones. Long investors tend to believe management teams, while short sellers do investigative work. Shorts come up with reasons why management is wrong, which makes their argument look smarter. However, that doesn’t…
Consumer Sentiment Inches Higher
Investors Are Negative Investors are a lot more negative than the S&P 500 makes it look. Dynamics under the hood of the market are all towards one direction. That is buying the stocks of the companies that do well in this new environment and selling the one that underperform. I t’s a negative viewpoint because…
Biggest Risks Facing This Rally
Stocks End On A Positive Note Stocks had a rough couple days this week, but ended on a positive note. S&P 500 was up 0.39% on Friday closing the week down 2.26%. It’s down 11.36% year to date and up 0.45% in the past year. It’s up 0.62% since April 14th. While it looks like…
Small Businesses Are In Big Trouble
Retail Trading Explosion Let's discuss the spike in retail trading activity. It is one of the hottest topics on Wall Street/financial Twitter and because I have a variant opinion. As you can see from the chart below, the combined E-Trade and TD Ameritrade DARTs, which is daily average revenue traders, has gone vertical. A great…
America Is 45% More Expensive Than The World
Cisco Beats Earnings Estimates Earnings season is winding down, but there are still a few more reports left. Next week the retailers such as Wal-Mart report results. It will be a story of the ‘haves’ and the ‘have nots.’ Most retailers will be in terrible shape, but the retailers that sell necessities probably did very…
Billionaires Are Very Bearish - Druckenmiller & Tepper
Range Bound Market (Cloud Falls) The stock market fell again on Wednesday as it continued its correction from its euphoric level last week. With the 1.75% decline, it’s down 3.76% in the past 2 days. Perma bears won’t buy the dips presented to them. They didn’t take advantage of the March decline and haven’t taken…