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The Verge of History

The lede, from Zerohedge.com:  U.S. stocks have risen more in the past eight years than in almost any other post-World War II time of economic growth, as defined by the National Bureau of Economic Research.

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More:   The logic here is that economic expansions fuel bull markets and so it’s reasonable to measure market recoveries after a period of macro contraction ends.

Using that definition, let’s review how the S&P 500 has performed during the last ten economic recoveries. To be precise, the birth of the stock market’s bull market is dated as the first day after an NBER-defined recession has ended. The market run continues through the peak.

The S&P 500 Index jumped 172 percent from July 2009, when the current expansion started, through Wednesday. The biggest advance was about 300 percent and occurred from April 1991 to March 2001, when Internet-related stocks soared.
Read the whole thing:  www.zerohedge.com

Texas Instruments Reaches New Highs

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Texas Instruments has been moving steadily higher on heavy trade since today’s opening bell.  As the week comes to a close the stock is testing its 2017 highs as the rally off the August lows continues.  TXN is about to clear a very heavy resistance band and is setting up well for more upside.  A follow-through move next week could usher in a powerful fresh rally leg. 

After suffering an ugly downside reversal in early June TXN began a steep pullback.  By the end of the month the stock had taken out its March, April and May lows before reaching major support near its 200 day moving average.  By the time the $76.00 area was tested TXN was back in deeply oversold territory.  The stock formed a very solid base here and by the second week of July it was clear the first re test of the 200 day moving average since February of 2016 was a success.  The rebound that followed carried shares all the way back up to the 2017 highs but the heavy resistance in this area limited further upside. 

Today TXN is mounting another assault on the $84.00 area.  If this zone can be convincingly taken out the stock has plenty of room to run.  The stock has a solid support zone in place from the $84.00 to $83.00 area.  A close back below $81.00 would violate this week’s low indicating more range bound trade is ahead before a fresh rally leg can take hold.

At the time of publication we are long TXN in most managed accounts.

 

 

Tight

The S&P 500 has never traded in a range of less than 0.3% over four consecutive days.  It’s heading that way today.  The least volatile market in history continues. 

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For comparisons sake, the largest three day range was back in October of 2008 at 10.8%.

The least volatile market in history continues.  If the month ended today it would be the quietest September in history, as measured by the VIX:

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Something’s gotta give…

Hat tip Charlie Bilello

 

 

Timing a Sell Off is Tough

Actually, near impossible.  Check this stat: Since the end of the 1987 bear market(12/3/87), which was just about 30 years ago, the S&P 500 has been in a bull market 89% of the trading days.  It would have been extremely tough to avoid(time)the 11% down days, over 30 years that’s only 858 out of 7,800 trading sessions. 

Hat tip Bespoke Research 

 

BAAD Spirit

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A B-2 Spirit sits on the flight-line at Andersen Air Force Base, Guam, Aug.10, 2016. Three B-2s arrived in theater to conduct a Bomber Assurance and Deterrence deployment. The BAAD deployment is part of a long-standing history of maintaining a consistent bomber presence in the Indo-Asia-Pacific in order to maintain regional stability, and provide assurance to our allies and partners in the region. (U.S. Air Force photo by Tech. Sgt. Richard Ebensberger)

Hat tip strategypage.com

Harley is Running Hot

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Harley-Davidson is moving well today.  The stock is up 2% as it extends an impressive rally off the September lows.  This bullish action is beginning to leave behind a major support zone near $46.00.  After an incredibly steep decline off the March peak HOG is setting up well for a meaningful recovery.

Back on July 18th HOG suffered its biggest downside gap open since October of 2015.  This earnings inspired flush drove the stock to nearly a 6% decline as selling pressure surged to its heaviest pace in years.  Despite this damaging collapse further loses were limited.  HOG managed a slight bounce but remained above the July 18th lows until earlier this month.  The stock pierced the $46.00 area on September 5th but quickly rebounded.  Since then HOG has been steadily climbing leaving behind what is now shaping up as a major double bottom.

Harley-Davidson is a low risk buy on weakness.  The stock has a solid support zone in place just below current levels.  It would take a close back below this week’s low of $46.80 to weaken this positive set up.  On the upside, a gap fill move up to $51.50 appears likely.  Also in this target zone is heavy resistance near the May/June lows. 

Also of note, HOG sports a sky high short interest ratio of 13.6.  This is an incredible amount of upside fuel. 

Earnings(Q3)are not due til October 17.

At time of publication we do not have a position in Harley-Davidson.

 

Union Pacific is Back on Track

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Union Pacific (UNP) is surging today. The largest-cap stock in the railroad sector is up over 1.6% as it extends an impressive rally off the late-July lows. At midday, shares were beginning to pierce the July highs while tracing out a seven-day winning streak. This powerful move has set UNP up for a run back to the 2017 highs.

More here from realmoneypro.com:   www.realmoneypro.com

It’s a Spending Problem

Not a revenue problem.  Key bit from CNSnews.com: 

The federal government collected record total tax revenues through the first eleven months of fiscal 2017 (Oct. 1, 2016 through the end of August), according to the Monthly Treasury Statement.

Through August, the federal government collected approximately $2,966,172,000,000 in total tax revenues.

That was $8,450,680,000 more (in constant 2017 dollars) than the previous record of $2,957,721,320,000 in total tax revenues (in 2017 dollars) that the federal government collected in the first eleven months of fiscal 2016.

At the same time that the federal government was collecting a record $2,966,172,000,000 in tax revenues, it was spending $3,639,882,000,000—and, thus, running a deficit of $673,711,000,000.

Emphasis mine.  Read the whole thingwww.cnsnews.com

Limiting Loses

The Key too Long-Term Investing Success

Great stuff here from Michael Lebowitz.  The lede:  Growing wealth through investing typically occurs over a long time horizon that includes many bullish and bearish market cycles. While making the most out of bull markets is important, it is equally important to avoid letting the inevitable bear markets reverse your progress. This article walks investment professionals through the under-appreciated benefits of limiting portfolio drawdowns and provides examples to help persuade clients to take a long term perspective on their wealth.

Read the whole thing:  www.seeitmarket.com

Under Armour Begins To Recover

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Shares of Under Armour have been under heavy pressure since early June.  At the late August lows the stock was down over 30% from the June peak.  As this month began UA began to perk up as a solid bottom took shape.  Today the stock is breaking above a key overhead trendline with the help of a top ten S&P 500 gain of 3.75%.  We believe Under Armour is set up well for a fresh rally leg that could recover most of the recent damage.

At the late July lows UA continued to hold key support near the $17.00 area.  This important support zone had already held the March and May lows but as August began the $17.00 area was clearly taken out.  UA drifted lower throughout the month but further damage was very limited.  By the end of last month it was becoming clear the downside action had reached exhaustion.  UA began September with a six day winning streak and by Monday shares were beginning to pierce heavy resistance near $16.00.  

Today’s impressive rally may prove to be the initial move of a powerful rebound.  UA still has a few hurdles to clear, number one being its declining 50 day moving average, but a solid base is taking shape.  Once shares have convincingly cleared the $17.50 area, which marks the  February, March, April, May and July lows, a major hurdle will have been taken out.  Until then we consider UA a low risk buy near current levels.  On the downside, a close back below $15.00 would send a clear warning sign that more basing is ahead before a new rally leg can take hold.

Also of note, UA sports a fairly high short interest ratio of 7.5.  This level of bearishness will provide extra upside fuel.

At time of publication we are long UA in a number of managed accounts.

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