Published September 4, 2020
This week’s moves in the Nasdaq 100 index (trading symbol: QQQ) offer a textbook case of the emotion that influences price movement. For days on end, the QQQ rose (blue line below), with the leading FANGMA stocks trading as if there were no price too high. Investors were fearful of missing out on the strong advance. (more…)
Published August 28, 2020
The article below from Delta Investment points to the gathering economic and market strength internationally. As noted before, a broader market is a stronger market. The more sectors and markets participate in the market’s rise, the better. For now, our favored Nasdaq index (QQQ) continues to lead the way, powered by the FANGMA trade. (more…)
Published August 21, 2020
As we head toward September and October, it’s worthwhile to remind ourselves that these months can be dangerous for stock investors. That’s particularly true in an election year. (more…)
Published August 14, 2020
This year has certainly already been one for the ages in many ways, including in the stock market. Stock prices have experienced both one of their steepest drops in history as well as one of their most impressive rallies. Bonds have delivered stock-like returns so far, while some commodities have soared – looking at you gold and silver! The market has rewarded both defense (bonds, gold) and offense (high growth tech/consumer stocks). The latest twist in the market has been a notable rotation into cyclical sectors, many of which have been lagging for quite some time. (more…)
Published August 7, 2020
One of the favorite sources of news and discussion topics in the financial media is the economy and speculation about its future health. Everyone knows that economies, whether local, national or global, repeatedly go through boom and bust cycles. These business cycles affect all of us to some degree but many in the investment community pay particular attention to them because of a fundamental belief that as the economy goes so goes the stock market. (more…)
Published July 31, 2020
There has been a lot of attention recently about the sharp drop in the price of the U.S. dollar. This decline has sent gold and other commodity prices soaring. Driving this decline in the dollar is a quicker recovery in economies outside the U.S., last week’s coordinated stimulus action by the European Union (which bolsters the Euro), and the zero interest rate policy of the U.S. Federal Reserve for as long as the eye can see. To put this in context, until recently, the dollar enjoyed a very long run of strength as Europe and Japan struggled. (more…)
Published July 24, 2020
We have mentioned recently the need for the stock market to expand its participation if the rally was to continue. Over the past couple of weeks this appears to be happening. See below a variety of sectors outside the usual FANGMA* tech/consumer complex that have been showing strength. This rotation is what fuels longer-term stock market rallies.
Published July 17, 2020
A few miscellaneous notes this week that describe the current market outlook, foggy though it be. Starting at the highest level with the wide range of earnings projections for the S&P 500. Currently, the S&P 500 index trades around 3200. If we look at the chart below, we see a 2021 earnings per share for the S&P 500 range of $135-170. At $135, the S&P 500 is trading at price-earnings ratio of 23, on the high end of “normal”.
Published July 10, 2020
The Wall Street Journal’s excellent daily blasts: The Daily Shot and Real-Time Economics provide a quick overview of economic and market trends and data. We were struck by a set of charts in one of this week’s blasts from those sources. Coinciding with the news that the Chinese government had notably expanded measures aimed at supporting the Chinese stock market, these charts could be read as a broader initiative by China to sort of take global market share while the U.S. pulls back on the global stage. We are very far from geopolitical experts, of course, but we are pretty good at seeing trends (being trend-followers!). This looks like a trend in the making to us (or continuation of a bigger trend, depending on your time frame). Herewith are a series of China-related charts. May be the start of something bigger and longer-lasting.
Published July 3, 2020
At TimingCube our focus market index is the Nasdaq 100, traded under the symbol QQQ. The Nasdaq 100 contains the 100 largest non-financial companies listed on the Nasdaq stock exchange, a purely electronic exchange that was founded in 1971. This focus on non-financial companies has served the index well over the past 30 years, a period dominated by growth in technology and electronic commerce. (more…)