Market Montage
Stock Market, Economics, Equity Analysis
Feb22
As noted yesterday, the Russell 2000 is showing a lot of relative weakness to the broader indexes that focus on large cap and far fewer names. To that end, the R2K is already down to its 20 day moving average with yet another weak day (nearly a 1% drop), while the S&P 500 and DJIA are not even touching their 10 day moving averages. The NASDAQ is right at its 10 day.
Feb22
After doing little more than "hanging around" most of 2012 (trading between a range of $57 and $60 most of the year), speculators piled in Herbalife (HLF) yesterday ahead of earnings. While this is not my way of doing things since we get random outcomes on earning reports, it has served the speculator class quite well this quarter as most stocks seem to be rallying on earnings even if the data is not that good. That said, Herbalife reported a very nice quarter — while I found guidance to be somewhat lacking for a 'high growth' company, the market seems quite pleased. …
Feb22
For those in the Hugh Hendry fan club we have an article from last week's Barron's where the hedge fund manager espouses his long held view that China will have a hard landing, along with the prospects of hyperinflation, and thoughts on Japan among other things. As always it is more entertaining to see video of the acerbic Hendry than have to read it, but it is what it is. …
Feb21
Other than that rally last Thursday that caught a lot of technicians flat footed (i.e. post the Apple reversal) the breadth in this market has been relatively poor the past 5 sessions or so. The Russell 2000 has been lagging the major indexes dominated by large caps, and my watch lists have contained far more red than green. Some people have been calling it the NBA market ("Nothing but Apple") but it's been a bit broader than that – i.e. Microsoft has acted well, and some groups are still working.
A bearish take on this is of course what I cited above – breadth is narrowing which usually happens near tops. Fewer and fewer stocks are pushing the market forward; many more are faltering. The bullish take is "a correction is happening under the surface while the indexes hold in." Obviously this market has not rewarded a bearish take in a very long time. So until we see at least a break of the 20 day moving average on a few major indexes it is difficult to continue to ride the bear, since he runs into a buzz saw every few days. …
Feb21
Pretty good explanation here by Jim Bianco on what the term "money printing" is and what the Federal Reserve does when this term is used.
"The ability of the Fed to increase the amount of money in banks' reserve accounts; that's what most people mean when they talk about money printing and that's under the direction of the Fed," Bianco says. …
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