First quarter strength has caused a shift in investor sentiment to the bullish side. Current strength in the U.S. economy not sustainable. Likely reversal in second quarter. Continue reading
March 2012 Update Extrapolation fever has swept through Wall Street. The S&P 500 is up 28% from the lows of early October. This is quite a move, particularly considering the fact that investors have earned almost nothing from equities over…
Optimism is returning to Wall Street. The economy has shown some improvement in recent months, as has the employment picture. Holiday sales were reasonably strong with December’s same-store number up 3.4%, slightly better than a year ago. Manufacturing also showed…
The global economy continues its march toward deflation. Policymakers continue to offer band-aid solutions for an intractable debt crisis and we move ever closer to a meltdown. Is it any wonder that investors are nervous? Even while the economy in…
Everywhere one looks, the world is showing signs of economic distress. China, Brazil and other developing economies are slowing down after years of rapid growth. Europe and the United States are dealing with the downside of decades of over-leverage and living beyond their means. The leverage game is over and its now payback time. Continue reading
US Stock Market Making a Bottom The equity indexes have all broken their 200-day moving averages decisively and it has caused investor pessimism to ramp up dramatically. Of course the weakening economy in the U.S. and the sovereign debt crisis…
The risk trade is back on. After spending much of the second quarter in correction mode, the market is now poised for a run to new cycle highs. May and June were particularly negative months for the markets, as investors…
Sentiment can turn quickly on Wall Street. The optimism that was building in October and November, due to the expectation of QEII has been replaced by concerns about Europe and debt contagion. Still, a majority of pundits have moved away…
The risk trade is back on. After spending much of the summer worrying about a double-dip in the economy and the potential for deflation, Wall Street is now beginning to gravitate toward a more optimistic scenario. What has precipitated this…
The Contrarian Value Advisor Mid -Third Quarter 2010 Update The double dip debate continues on Wall Street. Virtually everyone recognizes that the economy has slowed down, but a majority of investors still believes that a return to recession will be…
After a year of economic rebound, evidence is mounting that the economy, both here and abroad, is rolling over. Now, all of a sudden, investors are becoming increasingly concerned about the possibility of a double dip. It was only two…
http://www.tta.thompson.com/reports Market Commentary Disclaimer This material has been prepared by KCCI, LTD., a registered broker-dealer, utilizing appropriate expertise. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified…
Mid-Second Quarter 2010 Update It is fast becoming apparent that the market has entered the next leg of the bear market. As readers of this letter know, this strategist has been saying that once the next downleg begins, it will…
The recession has ended and all is right with the world. At least that is what Wall Street would have us believe. According to the consensus, it is early in a new and sustainable uptrend and so the stock market…
2010 Outlook The new year appears to be starting off the same way the last year ended. It has been an almost uninterrupted march upward since last spring. Investors are gaining confidence in the belief that a sustainable recovery is…
What a difference five months and a fifty percent plus rally can make. Whereas the majority of investors were decidedly bearish at the lows in March, today a majority now view the stock market in a decidedly more positive light….
It is amazing to see what three months of positive tape can do for investor psychology. A majority of investors are now looking at a glass half full rather than half empty. We’ve gone from pundits competing with one another…
What we have just witnessed is a classic bear market rally. The market has rallied approximately twenty percent in three weeks with some of the most oversold sectors such as financials, homebuilders and certain commodities doing much better than that….
For the past three months the stock market has been range-bound with the Dow trading up and down between 7500 and 9000 and the S&P between 750 and 900. The consensus interpreted this sideways movement as evidence that the market…
We can all celebrate the fact that 2008 has come and gone. It is the kind of year that should only happen once in a lifetime. This seems to be exactly what investors are counting on. Consensus opinion has obviously…
With the U.S. stock market down by more than forty percent, more and more pundits are putting forth the view that the market has either seen its bottom or is very close to one. After a sharp sell-off in the…
The United States as we have known it for the last seventy five years is no longer. We are witnessing a sea change in the structure and functioning of our financial system. The impact it will have on our economy…
After a tumultuous first quarter, it appears that the stock market is trying to mount some sort of rally. Given all the concerns about the economy and the financial system, it is likely that any rally will be an uneven…
The stock market has come all the way back from its summer correction and a majority of investors see clear sailing ahead. The Bernanke put is alive and well. It is amazing that just a month ago Wall Street was…
As a baseball fan, I am more than a little disheartened by this era of steroids. Baseball has always been a game of tradition and statistics. It was always fun to compare players from different eras and try to determine…
It appears as though the four-year cyclical bull market is finally coming to an end. After putting in a strong second half of 2006 without so much as a 3% correction, the stock market is showing signs of rolling over….
The Dow Jones Industrial Average has just about made it back to the all-time high it reached in 2000. Some on Wall Street are seeing this as a sign that the market is poised for a substantial upward move. The…
After three years of a cyclical bull market, it appears that the next leg of the secular bear market has begun. Investors should be prepared for new lows in all of the broad averages, below their lows of 2002. This…
The majority of strategists are calling for a better performance for the U.S. stock market in the year ahead. Given the flat performance in the year just ended, this is not necessarily saying much, but it does indicate that Wall…
It seems that Wall Street can put an optimistic spin on almost anything. Hurricane Katrina and the floods that followed represent the worst natural disaster in this country’s history yet Wall Street barely blinked. Economists are busy raising GDP forecasts…
The stock market continues to frustrate bull and bear alike. It has been stuck in a tight trading range for the past eighteen months. Each time it appears poised to breakout in either direction, it reverses course. In my thirty…
The focus remains on the dollar, commodities and inflation. Some investors believe that the dollar may have found a level from which to stage a multi-month, intermediate-term rally and that, in turn, commodities and inflation may be nearing a peak….
This year is getting off to a weak start but it would be premature to draw a bearish conclusion from this. Most of last year was spent in a trading range and investors became conditioned to sell the rallies and…
It is clear from President Bush’s comments last week that partial privatization of social security and tort reform are at the top of his agenda for the second term. Major tax reform is on the agenda as well, with either…
The stock market has spent most of this year building what looks like a secondary top following the bear market rally of 2003. There have been a series of lower highs and lower lows but no decisive break yet. It…
Waiting for Godot. This is what it has felt like these past many months as investors have waited to see whether the market would break out to the upside or downside from its trading range. After putting in a strong…
The counter-trend equity rally that has been in place since March of 2003 appears to be ending. While some stocks, particularly in the commodity area, could extend their gains, many stocks have already turned down. The next leg of the…
What a difference a year makes. A year ago investors were quite bearish about both the economy and the stock market. With rates already so low there was real concern that the Federal Reserve had little left in its arsenal…
The economy is in recovery mode right now. Strength is showing up in many areas. Consumer spending remains relatively robust, factory orders are up and industrial commodity prices are firming quite dramatically. Even the long depressed capital spending sector is…
What a difference three months can make. Back in March, the U.S. was facing the uncertainty of a war with Iraq, the economy was faltering and the stock market was heading south. Three short months later, Sadaam Hussein and his…
The war with Iraq is all Wall Street seems able to focus on these days. Little attention is given to earnings or economic data. Strategists, portfolio managers and traders have all been forced to become amateur military analysts. Perhaps the…
Hope springs eternal. With a new year upon us, Wall Street is all of a sudden viewing the glass as half full once again. This is a nearly complete reversal from the half empty sentiment that was so prevalent in…
On almost a daily basis we hear from a member of the Federal Reserve telling us that the current monetary policy is accommodative and that an economic recovery is underway. After all, the Fed has instituted eleven rate cuts over…
Regular readers of this letter know that I have been among the most bearish strategists on Wall Street for the past two years. My February letter was the most bearish piece I have written in my nearly thirty years in…
Optimism is returning to Wall Street. Not only is the stock market up sharply from the lows it reached in September, but the economy appears to be emerging from recession as well. The fourth quarter 2001 preliminary GDP figures were…
In my last market letter dated September 16, prior to the re-opening of the stock market, I made the case that we could be nearing the end of this bear market. I said that following a sharp sell-off to discount…
America has been changed forever as a result of the tragic events of September 11. The horrific images of Tuesday will be with us for our lifetime. For too long, we have taken our freedom for granted. We have been…
The stock market is caught in a tug-of war. On one side are the bears who continue to see earnings disappointment wherever they look, with little evidence of improvement on the horizon. On the other side are those who believe…
The stock market appears to have entered the panic stage in this bear market. An important turning point may be near at hand. Many sentiment indicators are approaching levels associated with major market bottoms of the past. There is a…
December Update As readers of this market letter know, my forecast in July called for the worst bear market since 1974 and compared the technology stocks to the “nifty fifty” in 1972. Furthermore, I predicted that the economy would be…
December Update As readers of this market letter know, my forecast in July called for the worst bear market since 1974 and compared the technology stocks to the “nifty fifty” in 1972. Furthermore, I predicted that the economy would be…
What a difference seven weeks can make. At the beginning of September investors were quite bullish about the market and still enamored with technology stocks. Here seven weeks later most investors are cautious, if not outright bearish, and the technology…
Let me start out by saying that I stand by my market objectives laid out in the July market letter. I still expect the NASDAQ to decline to the low 2000’s and the Dow to drop into the 8000-9000 range….
The long-term secular bull market in U.S. stocks is alive but not well. The factors that have helped create this greatest of bull markets are, for the most part, still with us. These factors include secular disinflation, a Federal Reserve…
The long-term secular bull market in U.S. stocks is alive but not well. The factors that have helped create this greatest of bull markets are, for the most part, still with us. These factors include secular disinflation, a Federal Reserve…