Rising Interest Rates Historically A Positive For Equity Returns

Posted by David Templeton on Thursday, September 03, 2015
The upcoming two day Federal Reserve meeting that concludes September 17th seems to have investors on edge. The million dollar questions is whether the Fed will raise rates or not. If one is a stock investor, they should hope the Fed raises rates and puts this extended anticipation to rest. Another reason investors may want to see the Fed raise rates is due to the positive impact a rate increase has on equity prices.As we noted in a post last month, Anticipating The Rate Hike, initial Fed rate i...
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Death Cross More Of A Buy Signal?

Posted by David Templeton on Wednesday, September 02, 2015
With the recent weakness in the equity markets, many stocks' and stock indices' chart patterns have traced out a death cross pattern in their moving averages. The Death Cross is a technical indication when the 50 day moving average crosses the 200 day moving average from above. As Michael Batnick of The Irrelevant Investor blog noted a few days ago, very few technical analyst use the death cross pattern in their chart analysis. However, much has been written about the death cross recently and a ...
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Stocks Higher 10-Years From Now

Posted by David Templeton on Sunday, August 30, 2015
Before the onset of the market weakness in the early part of last week and the end of the prior week, S&P Dow Jones Indices released a report highlighting rolling 10-year annualized returns for the S&P 500 Index. The report seems prompted by a response Warren Buffett made to a question on timing the market. Buffett noted he was not a market timer and simply responded, "Stocks are going to be higher, and perhaps a lot higher, 10 years from now. I am not smart enough to pick times to get in and ge...
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Equity Market Recovering Like October 2014

Posted by David Templeton on Thursday, August 27, 2015
On Tuesday I wrote about the bulls waiting for that elusive equity market bounce. The wait was short as the market snap back over the last two days qualifies for that bounce. Investors are likely contemplating the market's direction from here.A "V-type" pattern seems to be forming just as the market traced out late last year. As the below chart shows, the contraction from July to October of 2014 was not as severe as the one being experienced at the moment and took longer to develop. What is inte...
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Awaiting The Elusive Equity Market Bounce That Holds

Posted by David Templeton on Tuesday, August 25, 2015
The stock market bears have been calling for this current pullback for what seems like years. Now the bulls are looking for the elusive bounce that "holds" and signals another move higher in the market. After the close on Friday, I noted the oversold market conditions and a potential bounce that may follow. Three days into this potential "bounce" scenario, the market has failed to cooperate. This shows how difficult it is to time the market and find market bottoms. Nonetheless, the bears have ha...
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Bears Awaken From Worst Nightmare

Posted by David Templeton on Monday, August 24, 2015
With today's market close the S&P 500 Index and the Dow Jones Industrial Average both are in correction territory, down 10+%. The S&P 500 Index is down 11.15% from its closing high on 5/21/2015 and the Dow Jones Industrial Average is down 13.33% from its closing high on 5/19/2015. It is safe to say the bears have awakened from their worst nightmare as the markets moved higher, nearly unabated, for four consecutive years until this past week. It is safe to say the market is in an extreme oversold...
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Nearly 70% Of S&P 500 Stocks In Correction Or Bear Market Territory

Posted by David Templeton on Sunday, August 23, 2015
Last week's market pullback did not spare too many equities from the draw down. As of the close on Friday, 30.3% (152 issues) of S&P 500 stocks are now down greater than 20% from their 52-week highs and another 39.0% (196 issues) are down between 10% and 20% from their 52-week highs. In total nearly 70% of stocks are in correction or bear market territory. Below is a table noting this breakdown.From The Blog of HORAN Capital AdvisorsFor those investors seeking to deploy cash, below is a table an...
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VIX Futures Curve In Backwardation, Indicative Of A Near Term Market Bounce?

Posted by David Templeton on Saturday, August 22, 2015
With Friday's market sell off, the VIX curve went into steep backwardation at 4.56. VIX backwardation refers to the situation when the near-term VIX futures are more expensive than longer-term 3-month VIX futures (VXV). This is an indication traders expect volatility in the future to be lower than it is now. Historically, when this occurs, short term market rallies tend to result from this technical event. In addition to the VIX backwardation, I noted other overly bearish technical indicators in...
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Oversold Technical Indications, Market May Be Due For A Bounce

Posted by David Templeton on Friday, August 21, 2015
The market action on the last two days of this week was not kind to equity investors. The Dow Jones Industrial Average closed down 530 points today and closed the week in correction territory, i.e., down 10% from its May high. The S&P 500 Index has not reached correction territory though, down 7.5% from its closing high on May 21st.From The Blog of HORAN Capital AdvisorsThe pullback this week in the S&P 500 Index and the Dow has resulted in oversold market conditions that historically have resul...
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High Beta Underperforming Low Volatility

Posted by Matt Antenucci on Wednesday, August 19, 2015
As the market continues to trade sideways in its, seemingly, directionless trade, it is helpful to observe various intermarket relationships and technical indicators to see what exactly is driving returns and to check-up on the overall health of the market.  One interesting dynamic of the market this year is the underperformance of high beta stocks in relation to low volatility stocks.  In a typical bull market, high beta stocks outperform as market psychology shifts to a “risk on” mindset where...
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