Archive for the ‘Market Update’ Category

Into The Top 15

The S&P 500 Index is working on one of its longest uptrends in history.  It has now closed 261 straight days above its 200 day moving average:

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Hat tip Charlie Bilello

Otherwise Known as an Uptrend

The S&P 500’s 200-day moving average has closed at a new all-time high everyday for more than a yr now.

The s&P 500 has gone more than a year without a 5% correction.  Since 1928, this has only happened 5 other times with 1995-1996 the last time.

Since 1950, 91% of all years had at least a 5% correction in the S&P 500.  54% of all year’s corrections were at least 10%.  Only one so far in 2017, an almost unnoticed 2.8%.

Hat tip Ryan Detrick of LPL Reasearch

 

 

Nasdaq Crash Expectations On The Rise

From Schaeffer’s Research:   The recent peak in QQQ’s 10-day, 10% out-of-the-money put/call skew may be most useful right now as a sentiment indicator — one that reveals traders are bidding up the odds of a QQQ crash over a continued rally to record highs by the widest margin in eight months, even as the shares remain (by any objective account) on strong technical footing above their 80-day.

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As contrarians we view this as quite bullish.  More here:  www.schaeffersresearch.com

Hat tip Brian Gilmartin of Trinity Asset Mgmt.

The Story of Beer

Is the story of America. 

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A great weekend read.  Enjoy:   www.npr.org

The First Half Of 2017…Historic

 

  • The S&P 500 made 24 new highs, the most since 35 during the first six months of 1998.
  • The S&P 500 was up on a total return basis in each of the first six months of the year. The last two times this occurred (1995 and 1996), the index gained an additional 14.4% and 11.7% over the final six months of the year, respectively.
  • Early strength is nothing new for this bull market, as the index has been higher year to date at the end of June in each of the last seven years, matching the previous record from 1985 to 1991.
  • Again, on a total return basis, the index gained eight consecutive months for the first time since a streak ended in May 2011. Since 1990, the all-time record was 10 months, which ended in October 1995.
  • The index closed up or down at least 1% only four times during the first half of the year. The last time that occurred was 1972, with only three instances. The record was in 1964 with only one, and the most was in 1932 with 91.
  • The largest pullback was only 2.8% (March 1 until April 13) and that was the second-smallest first-half pullback ever (1995 at 1.7% is the record). The average first-half pullback has been 9.0% since 1950, making the action in 2017 all the more remarkable.
  • Hat tip Ryan Detrick

 

The Next Six Months

Great stuff here from Ryan Detrick:    The index was up 8.2% for the first half of the year (double the 4.1% average first-half return since 1950*). What happens now? Since 1950*, the second half of the year has been up 4.5% on average and higher 70.1% of the time. However, in the 25 other instances when the first half has been up more than 8% (like 2017), the second half return has been even stronger with an average 7.1% gain and positive returns 84.0% of the time (higher 21 out of 25 times). In other words, strength usually begets strength, and we believe a large second-half pullback is unlikely.

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Hat tip Ryan Detrick, LPLResearch.com

Happy Independence Day!

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Russia Is Red

No surprise that Russia is the only stock market in the world that is in the red for the first half of 2017:

global etf returns

The long Poland/short Russia trade has worked quite well.   The above numbers show just how important it is to add international exposure to a well diversified portfolio.  There’s a ton of opportunity out there.  It isn’t just the NYSE/Nasdaq/Russell indexes. 

Checking In On The Dogs At Mid Year

The ‘Dogs of the Dow’ that is.  From Investopedia.com:  The strategy involves building a portfolio equally distributed among the 10 companies in the DJIA that have the highest dividend yield at the beginning of the year, then readjusting this portfolio on an annual basis to reflect any changes that have occurred to these 10 companies throughout the calendar year. By buying these companies, you are essentially buying the cheapest stocks in the DJIA – companies that are temporarily out of favor with the market but still remain great companies.

Dow Dogs
So far, not a good year for the strategy.  The ‘Dogs’ are up only 2.26% at mid year while the rest of the Dow Industrials is higher by 9.5%. 
Hat tip bespoke.com

Grant Williams: Get Out of Equities Before Boomers Are Forced to Sell Them

compliments of Zero Hedge

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