Sharp Decline In Investor Sentiment

Posted by David Templeton on Thursday, July 02, 2015
The American Association of Individual Investor's sentiment survey release this morning shows bullish sentiment fell nearly thirteen percentage points to 22.6% The previous week bulls switched to the bearish camp with bearish sentiment increasing 13.4%. The bull/bear spread is now -12.5%. As a reminder, this contrarian sentiment measure can be volatile from week to week and is most predictive at its extremes.From The Blog of HORAN Capital AdvisorsSource: AAII
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Equity Put/Call Ratio Jumps To Near 1.0

Posted by David Templeton on Monday, June 29, 2015
It seems as though the Greece situation has been one that has been ongoing for years and was the cause for today's market decline and jump in the equity put/call ratio to .94 from .54 on Friday. As we noted in a May post in 2012, a spike in the put/call ratio to .99 was partly caused by "the lack of confidence in Europe handling its sovereign debt issues." Nearly three years later the same issues are again challenging investors. For investors, the equity put/call ratio...:...measures the sentime...
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Equity Market Performance Around Crisis Events

Posted by David Templeton on Sunday, June 28, 2015
With Greece headlines dominating news stories over this past weekend, investors might be on edge regarding future equity market returns on Monday and the coming weeks. A number of headlines this evening are using the words plunge and slide as U.S. futures are down less than 1.5%. Yes, much can change before the U.S. markets open Monday morning, but it is the sensational headline that generates reader clicks and article views. I have written several times over the past few years about these shock...
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Companies Continue To Enhance Earnings Per Share Via Stock Buybacks

Posted by David Templeton on Thursday, June 25, 2015
S&P Dow Jones Indices released first quarter 2015 buyback detail for the S&P 500 Index. On a year over year basis, buybacks declined 9.5%. In conjunction with the YOY decline in buybacks, YOY operating earnings declined 6.3% and as reported earnings declined nearly 13%. Important in the buyback report is the fact 20% of S&P 500 companies reduced their share count by at least 4%. This share count reduction enhances reported earnings per share and investors need to be aware of the artificial growt...
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Better Investing Members' Most Active Stocks As Of June 20, 2015

Posted by David Templeton on Saturday, June 20, 2015
Better Investing Magazine maintains a list of most active stocks as reported by their members. From time to time I highlight recent activity. Below is the list of most active stocks as of June 20, 2015. Most of the active stocks on the list are experiencing more buying than selling. Two issues, Qualcomm (QCOM) and Ford (F), are experiencing the most selling pressure as reported by BI's members.From The Blog of HORAN Capital AdvisorsFull View Disclosure: firm zand family long AAPL, QCOM
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EURO STOXX 50 VIX At Record Wide Spread Versus S&P 500 VIX

Posted by David Templeton on Saturday, June 20, 2015
The VIX index is a measure of volatility and a higher VIX reading is associated heightened investor fear. Because this index is know as the fear index, a higher VIX reading is viewed as a contrarian indicator. In late 2008 the VIX hit a level of near 90% as compared to today's reading of about 14%. Shortly after this high reading the S&P 500 Index reached a bottom and has been on a march higher since.VIX measures are available for other markets outside the U.S. and one getting some attention at ...
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Stock Investors Should Hope 2015 Is A Repeat Of 2013

Posted by David Templeton on Tuesday, June 16, 2015
Market similarities comparing this year to 2013 are beginning to rise to the forefront of investors' minds. For equity investors, let's hope 2015 is a repeat of 2013. In 2013 the bond market experienced a "taper tantrum" as the Fed was preparing to end its quantitative easing programs. From early May 2013 to mid September the 10 year US Treasury yield rose from 1.7% to 2.9%. On an absolute basis, this is a significant rise in interest rates and caused bonds to selloff.. The iShares 20+ Year Trea...
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Dow Theory Has Many False Signals

Posted by David Templeton on Sunday, June 14, 2015
One technical market indicator that has gained quite a bit of focus recently is the weakness in the transport index (IYT) relative to the Dow Jones Industrials Index (DJIA). Dow Theory suggests that underperformance in the transportation sector of the market is a precursor to broader weakness in the Dow index.From The Blog of HORAN Capital AdvisorsEarlier this month, Sam Stovall, U.S. Equity Strategist for S&P Capital IQ, noted the divergence in the transports relative to the Dow has more often ...
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This past week the American Association of Individual Investors reported bullish investor sentiment declined over seven percentage points to 20.04%. This is the lowest sentiment reading level since April 11, 2013 when bullish sentiment was reported at 19.31%.From The Blog of HORAN Capital AdvisorsData source: AAIIThe Individual investor sentiment reading is considered a contrarian indicator. As such, low levels of bullish sentiment suggest future equity market returns could be favorable. The thi...
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High Quality Stocks Hold Up Better In Broad Equity Market Corrections

Posted by David Templeton on Monday, June 08, 2015
Just two weeks ago I wrote an article focusing on investment risk and market corrections, Incurring Investment Risk Near A Market Correction. The "correction" thinking seems to remain high on many investors' and strategists' minds. From a contrarian perspective, market corrections are difficult to time and corrections rarely occur when everyone expects them to. This article is falling into the same line of correction thinking, maybe a trap of sorts; however, the following thoughts will touch on ...
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