Bulls Win Big: Overbought Conditions Return – The Market Breadth

bulls win big (Credit: BULLFIGHT, SOMETIMES THE BULL WINS by David Winnie from Flickr)

Stock Market Commentary The bulls win big. The summer of loving stocks continued with the bulls overcoming a major hurdle: the overbought threshold for market breadth. After two failed attempts in the last month, the third attempt became the charm. The charm received a strong endorsement from fresh breakouts by the S&P 500 and the … Read more

New Display of Strength Dares Fed’s Hawkishness – The Market Breadth

display of strength (Credit: Boston Library on Flickr)

Stock Market Commentary: On a weekly basis, the stock market seems to flip its abiding theme. One week after I accused the stock market of sleepwalking, buyers roused the major indices out of their slumber with a new and sudden display of strength. A 13.9% post-earnings surge from Meta Platforms, Inc (META) seemed to set … Read more

A Quick End to the Inflation Trade

quick end

My idea for a trade on the U.S. CPI (Consumer Price Index) report seemed like a great idea last month. Up to that point, the market experienced sharp swings based on the directional gap between the actual inflation readings and expected inflation. I used the Cleveland Federal Reserve’s “nowcasting” to generate an approximate trading model. … Read more

Overbought But Making A Bullish Case With Key Breakouts – The Market Breadth

bullish case (Credit: LEGO Collectible Minifigures Series 9 : Judge by wiredforlego on Flickr)

Stock Market Commentary: Last week was a bullish week for the stock market. Key breakouts on the major indices made a bullish case for stocks as buying strength conjured up overbought trading conditions. Yet another post-CPI celebration sealed the deal on a bullish convergence leading into the report on inflation. While it is tempting to … Read more

From Distraught to Overbought In A Flash – The Market Breadth

distraught to overbought (Credit: Shopping cart at Weis by SchuminWeb from Flickr)

Stock Market Commentary: The latest cryptocurrency scandal and implosion distracted the market (and me) from the upside potential of the October CPI (Consumer Price Index) report. Likely contagion, real and psychological, from crashing crypto prices helped drive distraught trading that created technical breakdowns across the major indices. U.S. midterm elections on Tuesday also apparently failed … Read more

Hot Inflation Read Accelerated the Timeline for Peak Fed Rates

The landscape of inflation and monetary policy continues to change fast. The June inflation numbers disappointed expectations once again for peak inflation. A surprise 1% point rate hike by the Bank of Canada combined with this hot inflation accelerated the timeline for peak interest rates from the Federal Reserve. Instead of a 75 basis point … Read more

Solid Housing Forecast from Freddie Mac Clears Way for Fed Rate Hikes

I doubted the ability of Freddie Mac to forecast the housing market once. Never again. In the immediate wake of the pandemic, Freddie Mac insisted that housing would recover rapidly. I was highly skeptical. Freddie Mac turned out to be too conservative! Fast forward two years and Freddie Mac has delivered a surprisingly solid housing … Read more

Inflation-Friendly Retail Stocks Are Still Outperforming

Stock Market Commentary: Inflation is everywhere in the global economy, and inflation will hang around for some time to come. The inflation problem is so bad that the Federal Reserve does not think inflation will return to its 2% target for another three years. While economists and pundits debate about how long inflation will last, … Read more

Bank of Canada: Inflation Is Too High, We Need Higher Interest Rates

In a blunt and direct discussion, Bank of Canada (BoC) Governor Tiff Macklem made a compelling case for fighting inflation by declaring that “the economy has entered this period of excess demand with considerable momentum and high inflation, and we are committed to getting inflation back to target.” To do so, the BoC hiked its … Read more

Inflationary or A Bubble – Housing Prices Help Push A Fed Driving Recession-Pricing for Home Builders

Two recent studies from the Federal Reserve say a lot about its core concerns for inflation. These studies were released back-to-back just one week following Fed Chair Jerome Powell confirming the new religion at the Fed for (aggressively) fighting inflation. Researchers at the St. Louis Federal Reserve identified housing services (aka rents) as a core … Read more