Beware Columbus

If the upcoming week was not already interesting enough, investors face an added risk factor as the markets reopen for trading. Monday is the Columbus Day holiday in the United States. And this fact alone has the potential to result in some unusual trading activity and greater than normal price volatility relative to the typical October day. As a result, investors should take caution in reading too much into what comes out of Monday’s trading.

Please click on the link to read more of my article on Seeking Alpha.

Stocks: The Most Important Week In 6 Years

The time for the stock market to bounce is now. At last, after two long years the S&P 500 Index and its 200-day moving average have finally met once again. And this time, the fate of the third longest bull market in history hangs in the balance. Bounce from here, and the bull market may have enough energy left to continue its reign into 2015. But if stocks continue to slice lower in the coming days, the wrath of the next bear market may soon be upon us. And all of this comes at time when third quarter earnings season gets underway in earnest and the Fed enters its penultimate week of daily Treasury purchases as part of its long running QE program. To say the least, the week ahead is the most decisive for investment markets in years.

Please click on the link to read more of my article on Seeking Alpha.

Finding The Bull Market Peak

The stock market has suddenly encountered an identity crisis. Over the three trading day stretch, stocks posted what is now the seventh worst trading day of the year on Tuesday followed by the best trading day of the year on Wednesday followed by the fourth worst trading day of the year on Thursday. Such violent swings have frayed the nerves of many investors that had become accustomed to a market that existed for so long with little volatility. But standing back from the daily trading noise and looking at the market from a broader view can be helpful in keeping today’s correction in perspective. And recent history can also offer some clues as to what a bull market peak actually looks like and whether we are currently in the midst of one today.

Please click on the link to read more of my article on Seeking Alpha.

Threats Remain Despite Wednesday’s Rally

What a fantastic afternoon. After threatening to break lower for much of the morning, stocks exploded to the upside upon the release of the Fed minutes from a meeting held three weeks ago. But today’s trading action obscured what has been the development of larger, more disconcerting trading pattern. For the stock market remains on an increasingly wild roller coaster ride that started several weeks ago. And in what has become an unfamiliar condition for those that hold publicly-traded equity in U.S. companies, the value of this ownership has actually been declining in value on net since the beginning of September. Even after today’s surge, the ongoing down drift in stocks represents the longest sustained correction in stocks since the fall of 2012. Despite this recent weakness, investors continue to have good reason for optimism, as fresh new highs remain well within reach. With that said, now is also not the time for complacency either, as the recent downtrend not only remains unbroken but may also represent the very beginning of what is to come over the next several years.

Please click on the link to read more of my article on Seeking Alpha.

Stocks: The Hunt For Red October

October has gotten off to a wild start. In the first three trading days alone, stocks as measured by the S&P 500 Index managed to drop by more than -2.3%, then rally by more than +2.3% to end up virtually flat for the month so far. And one gets the suspicion that this might not mark the end of the volatile market swings in the weeks ahead. Given that this latest bout of volatility is taking place nearly six years into the third longest stock bull market in history at a time when the economy remains persistently sluggish and the Fed is about to complete its market boosting QE3 stimulus program, investors may find themselves reasonably wondering whether the markets may finally be on the brink of rolling over. How markets perform for the rest of October will be critically important in determining whether we are indeed arriving at a peak or if stocks still have the strength to run higher into 2015. For if stocks post a decisively red October, it will likely mark the beginning of the end of this graying bull market.

Please click on the link to read more of my article on Seeking Alpha.


Get every new post delivered to your Inbox.

Join 5,404 other followers