You Don’t Need A Recession To Fall Into A Bear Market

It is a declaration that I frequently see in comment section discussions on Seeking Alpha. The basic assertion is the following: the U.S. economy is not showing signs of entering into recession, thus stocks are not at risk of falling into a sustained bear market. Unfortunately, this conclusion is not necessarily true. For history has shown on numerous occasions that you do not need to have an economic recession looming on the horizon to see U.S. stocks fall into a bear market.

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

Projecting The Market Response To The Fed This Week

The Federal Open Market Committee convenes for its upcoming meeting on Wednesday and Thursday of this week. In play at this meeting to discuss U.S. monetary policy is whether the Fed will raise interest rates for the first time in a decade with a quarter point increase off of the zero bound. The market promises to be completely transfixed by this gathering that will culminate with a post meeting press conference by Fed Chair Janet Yellen on Thursday afternoon, not long after the meeting statement is released at 2PM. So given the importance of this upcoming meeting to investors, exactly what can we reasonably expect from the stock market in the coming week both leading up to and following the meeting and press conference? If history is any guide, the stock market may be setting up for a positive week regardless of how the Fed moves.

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

Stocks: Where Do We Go From Here?

Stock market volatility is continuing for yet another week. The beginning of the week on Tuesday saw an impressive burst to the upside, which was certainly fun to watch but is not indicative of a market that is feeling well. For as the next day on Wednesday showed, such rallies are typically accompanied by days where stocks are down by a comparable amount.  To this point, stocks have posted moves in either direction of 2% or more in eight out of the last fifteen trading days, with five of these swings headed to the downside. Overall, stocks are violently indecisive right now, and it is worthwhile to consider exactly where future swings will take us not necessarily tomorrow or the next day but in the weeks and months ahead.  In working to answer this question, it is instructive to explore through market history to see what evidence from the past we can juxtapose against today. And when carrying out this exercise, we quickly see that the events impacting today’s market have only taken place in a select number of instances over the past 90 years.

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


Is It Safe?

Watching capital markets on Monday morning felt like getting a cavity drilled by a mad dentist. In short, it was painful and ugly. But beyond the widespread losses, another important development surfaced on Monday morning. In addition to major moves to the downside, we also witnesses some deeply troubling dislocations in the pricing of a variety of exchange traded funds. Sure, we are in the seventh year of a roaring bull market and the gains have been fantastic all along the way. But given some of the things we saw this morning, it is reasonable to wonder whether it is truly safe for investors in capital markets today.

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

Stocks: Perspectives On The Selloff

Global stock markets took a beating this week. U.S. stocks were part of the sharp decline including the benchmark S&P 500 Index, which unlike its global counterparts has been remarkably resilient up to this point. But given the pace of the sell off this past week and particularly over the last two trading days on Thursday and Friday, it’s reasonable to consider what we might expect from here.

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


Get every new post delivered to your Inbox.

Join 8,732 other followers