stock analysis – 50 Park Investments

11 Mar

Daily Market Commentary

Week In Review: Bull Market Turns 7: Rally Continues On Wall Street

March 11, 2016
By info@50park.com

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Oversold Bounce Continues…For Now

Stocks rallied nicely last week but it was another volatile week. The moves that are occurring in capital markets are wild. In fact, they are some of the largest moves (both up and down) we have seen in years. The wild moves are taking place across several asset classes with some of the largest swings occurring in: Stocks, Currencies and Commodities. For example, the benchmark S&P 500 soared over 11% in the past four weeks (after falling 7% two weeks earlier) which is not an insignificant sum. Crude oil surged nearly 50% since its Feb low. Currencies are also trading all over the map with large swings taking place in major global currencies such as the Euro, Canadian Dollar, USD, just to name a few. Typically, wild and loose swings are not healthy for an aging bull market. The one major wild card remains the easy money sloshing around the globe from central banks. Next week we have the Bank of Japan and The U.S. Fed. We’ll see what crazy bullets they try shooting from their easy money bazooka. We would be remiss not to note that all the beaten down areas of the market are trying to bottom and have bounced sharply over the past few months. If this continues, that will be bullish for stocks. Some of these areas are: Emerging markets ($EEM), Gold ($GLD), Oil ($XLE $OIH), Steel ($X), Transports ($IYT), Materials ($XLB, Junk Bonds ($JNK), just to name a few. The bull market is aging by any normal measure and the fact that it refuses to fall illustrates, for now, that the easy money still matters. Also keep in mind that bear market rallies tend to last between 4-10 weeks, we just finished our fourth week.
Monday-Wednesday’s Action: Stocks Quiet Ahead of ECB Meeting

Stocks opened lower but closed higher on Monday as the beaten down areas of the market continue to march higher. Oil prices surged over 5% on Monday and have vaulted over 42% since the Feb 11th, low! That is a massive rally over a short period of time. All the areas that have not been working for years are trying to bottom. It began with Gold ($GLD) a few months ago, now other areas are catching a strong bid. These areas include: emerging markets ($EEM), oil ($XLE $OIH), steel ($SLX), transports ($IYT), materials ($XLB), junk bonds ($JNK), just to name a few.
Stocks opened lower on Tuesday after disappointing trade data was released from China. China’s decline in exports deepened in February which strengthened the case that more stimulus may be needed. Chinese exports fell -25.4% year over year which illustrates how weak global demand is. This was the largest decline since May 2009. Chinese imports also plunged illustrating weak domestic demand.
Stocks rallied on Wednesday as the bull market celebrated its 7th anniversary. Once again, Central Banks can’t help but interfere with markets. Earlier today, the Bank of Canada held rates steady thanks in part to a huge rally in oil over the past month. Tomorrow investors will be looking at the European Central Bank (ECB) for more easy money. Next week the U.S. Fed is going to hold it’s next meeting. Remember, the end of the quarter is only a few weeks away..
Thursday-Friday’s Action: Wild Moves Post ECB
Stocks opened higher but closed lower on Thursday in a classic case of buy the rumor and sell the news. Before Thursday’s open, the European Central Bank (ECB) fired another shot from their easy money bazooka. The ECB cut their benchmark interest rate to 0% from 0.05%. They also expanded QE (money printing) to 80 billion euros a month, up from 60B. The bank also cut their bank deposit rate further into negative territory taking it down to -0.4%, from -0.3%.The ECB also extended their QE program to March 2017, which is longer than the initial target of September 2016. In other news, New Zealand’s Central Bank jumped on the easy money band wagon when Governor Graeme Wheeler unexpectedly cut interest rates by 25 basis points to a record low 2.25%. Stocks gapped up on Friday after oil jumped to a multi-month high. The International Energy Agency said oil prices may have bottomed as some production is being taken offline due to low prices. Also the IEA said Iran’s production is slower than expected..

Market Outlook: Rally Continues On Wall Street

The market was deeply oversold so keep in mind the strongest rallies in history occur during bear markets (a.k.a bull traps). As always, keep your losses small and never argue with the tape. If you want help with the market, contact Adam or – Join FindLeadingStocks.com.

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04 Mar

Daily Market Commentary

Week In Review: Stocks Continue To Rally…For Now

March 4, 2016
By info@50park.com

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Oversold Bounce Continues…For Now

Stocks rallied nicely last week, with the bulk of the gain occurring on Tuesday. The major indices ended higher and are now up very nicely from the Feb 11 low. The benchmark S&P 500 has soared 11% over the past 3.5 weeks which is a huge move during that time. Remember, in normal times (before massive interference from global central banks), a 10% move for the entire year was considered healthy. So an 11% in 3.5 weeks is clearly a HUGE MOVE and that type of wild action, does not happen in bull markets. Large wide and loose swings typically occur in bear markets. Prior to the 10% rally, we saw the S&P 500 fall 7% in 2 weeks. In the short term, the market has become overbought and the intermediate and long term outlook improved considerably. Much of this rally can be attributed to the hope of more easy money from global central banks and important beaten down areas oft he market are trying to bottom. Global central banks love interfering with markets and have distorted the playing field for years. Any strong intervention may change the playing field and lead to a stronger bounce. Most central banks meet this month and for the most part they are all keeping the easy money spigots open (for now). The other important bullish driver has been that many beaten down areas of the market are trying to bottom such as emerging markets ($EEM), oil ($XLE $OIH), steel ($X), transports ($IYT), materials ($XLB, junk bonds ($JNK), just to name a few. We’ll see if that continues.
Monday-Wednesday’s Action: Stocks Jump Ahead of Jobs Report

Stocks rallied on Monday after the latest round of tepid economic data was released. Over the weekend, the G-20 meeting disappointed investors and China announced more easy money. The G-20 meeting of finance minsters and central bank governors ended in a stalemate which disappointed markets. Elsewhere, China’s stock market fell again which prompted China’s Central Bank to cut it’s reserve requirements in another attempt to stimulate their market. In the U.S, economic data remained tepid at best. Chicago PMI fell to 47.6, missing estimates for 52.9. Pending home sales slid by -2.5% in January, missing estimates for a gain of +0.5%. The Dallas Fed Mfg Survey fell to negative -8.5. The Dallas Fed’s general activity index was much worse than expected and fell to negative -31.8 in February vs minus 34.6 in January.
Stocks rallied on Tuesday on the first day of the new month. The Dow Industrial Average ended higher in February but the other major indices ended near their monthly highs but slightly in the red for the month. Super Tuesday has historically been a positive period stocks. Going back to 1992, the market has rallied one week after the last six Super Tuesdays. Overnight, China said its Purchasing Managers Index fell to 49 in February which was the lowest reading since 2009. Meanwhile, the services index slid to 52.7 from 53.5 in January which was the weakest reading in seven years. The weak data is one reason why China’s central bank and government have been throwing money to stimulate their economy. In the U.S., the February ISM manufacturing index came in at 49.5 which is below the boom/bust level of 50 but above the Street’s estimate of 48.5. In other news, construction spending swelled by +1.5% in January to its highest level since 2007. The Markit manufacturing PMI for February came in at 51.3 which matched estimates.
Stocks were relatively quiet on Wednesday as investors digested Tuesday’s very strong rally. Overnight, Moody’s Investors Service cut the outlook on China’s credit rating from stable to negative which bodes poorly for the global market. In the U.S. MBA Mortgage applications fell -4.8%, lower than the last reading of -4.3%. ADP, the country’s largest private payrolls company, said private employers added 214,000 new jobs last month, beating estimates for 185,000. The Fed’s Beige Book showed economic activity increased in most districts. In other news, Sports Authority filed for Chapter 11. Sports Authority became the first major U.S. retailer to file for bankruptcy in 2016, as they scramble to fight fierce competition from Wal-Mart (WMT) Amazon (AMZN) and others.
Thursday-Friday’s Action: Last Jobs Report Ahead of Fed Meeting
Stocks edged higher on Thursday as investors digested the latest economic data and waited for Friday’s jobs report. In the U.S., weekly jobless claims came in at 278k, slightly higher than the Street’s estimate for 270k. Revised fourth-quarter productivity fell -2.2% compared to estimates for negative -3.2%. Unit labor costs grew by 3.3%, missing estimates for 4.7%. The PMI Service index came in at 49.7, lower than the last reading of 53.2. The ISM service index came in at 53.4, beating estimates for 53.1. Factory orders grew by 1.6%, missing estimates for 2%. Before Friday’s open the government said U.S. employers added 242k new jobs in Feb, beating estimates for 190k.

Market Outlook: Bear Market Rally

The market is deeply oversold so keep in mind the strongest rallies in history occur during bear markets (a.k.a bull traps). As always, keep your losses small and never argue with the tape. If you want help with the market, contact Adam or – Join FindLeadingStocks.com.

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12 Feb

Daily Market Commentary

Week-In-Review: Time To Bounce?

February 12, 2016
By info@50park.com

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Stocks Bounce From Deeply Oversold Levels

The major indices ended lower last week but near their weekly highs which suggests the market may finally bounce from deeply oversold levels. This appears to be another short term low for stocks (Not “the” low, just “a” low). The conditions are ripe for stocks to rally a bit as they work off their deeply oversold levels. Once again, the bulls showed up and defended important support for the S&P 500 (1810-1820 area). What we saw last week was another “buy tail” which is a technical term for a market opening lower and closing higher (or near the highs). We have seen this pattern a few times before and the pattern tends to set the stage for a near term rally. That’s the short term outlook. Meanwhile, the intermediate and long term outlook still remain bleak. First, we are still operating with the notion that we are in the early stages of a new bear market for stocks so we have to be very selective moving forward. Second, it is important to note that, in bear markets, surprises happen to the downside. Third, we have to keep in mind that global central banks love interfering with markets and have distorted the playing field for years. Any strong intervention may change the playing field and lead to a stronger bounce. Until that occurs, the sellers remain in clear control. We feel it is just a matter of time until the major indices fall 20% from their 2015 highs which officially defines a bear market. Several important areas of the market are already in a bear market (defined by a decline of 20% or more from a recent high) which means it is just a matter of time until the major indices play catch up to the downside. These are some of the important areas that are already in bear market territory: Commodities, The Small Cap Russell 2000 ($IWM), Transports ($IYT), Biotechs ($IBB), Retail ($XRT), Junk Bonds ($JNK), Materials ($XLB), just to name a few.
Monday-Wednesday’s Action: Stocks Try To Bounce

It was a sea of red on Wall Street. Stocks fell hard on Monday as sellers remain in clear control of the market. The damage was widespread and continued from last week. The Nasdaq Composite and Nasdaq 100 broke down below support of their bearish flag patterns (highlighted last week). The Small-Cap Russell 200 also broke below January’s low which is not ideal for the bulls. Oil prices fell over 3% on Monday and that continues to hurt sentiment. There was virtually no meaningful economic data on Monday from the U.S. The only thing noteworthy on the economic front was that India, the world’s third largest economy, said it’s economy grew by +7.3% in Q4 2015, making it one of the world’s fastest growing economies. China’s GDP slowed to +6.8% in the same period. Meanwhile, U.S. GDP grew by 0.7%, missing estimates for 0.90%.
The major indices ended near their intra-day highs for the second straight day which may be a sign that the market is due to bounce a little. Clearly, the market is deeply oversold and way overdue to bounce at this point. Shortly after the open, the market tried to rally but sellers showed up and quickly sent stocks lower. Then in the afternoon, stocks tried to turn higher and overall it was just a lot of jello moving on a shaky plate. For all of 2016, rallies on Wall Street are lasting a few hours which is not a healthy sign. The inability for the market to bounce clearly illustrates how weak the market is right now and tells you everything you need to know. In other news, oil prices fell 5% and is once again trading in the high $20
The market was relatively quiet on Wednesday as investors digested the latest round of lackluster earnings data and Janet Yellen spent most of the day testifying on Capitol Hill. Disney ($DIS) and Solar City ($SCTY) both fell hard after reporting disappointing results. Janet Yellen spent the day on Capitol Hill and basically said nothing. She said she understands there are threats to the global economy but she did not take more rate hikes off the table. The market remains deeply oversold and the inability to bounce speaks volumes to how weak the intermediate and longer term trend is right now.

Thursday-Friday’s Action: Stocks Bounce After OPEC News
Before Thursday’s open, futures and most global markets, were down big as another wave of selling hit stocks. Overnight, Sweden’s Central Bank surprised markets and cut its main repo rate further into negative territory. Sweden lowered its rate to negative -0.5%, from -0.35%. Crude oil fell to $26/barrel and gold soared to a fresh 1 year high. At one point, the Dow Fell over 400 Points and the S&P 500 briefly undercut Jan 20, 2016’s low of 1812 before buyers showed up and defended stocks. In the afternoon, news spread from OPEC that they may be near a deal to cut production which helped oil prices spike higher. Needless to say, stocks are deeply oversold and way overdue to bounce at this point. Stocks rallied nicely on Friday as oil vaulted 12% and bounced from deeply oversold levels.

Market Outlook: A Big Top

From where we sit, this aging bull market is over or on its last breath. The last two major bull markets ended shortly after their 5th anniversary; 1994-2000 & 2002-Oct 2007. The market is deeply oversold so keep in mind the strongest rallies in history occur during bear markets (a.k.a bull traps). As always, keep your losses small and never argue with the tape. If you want help with the market, contact Adam or – Join FindLeadingStocks.com.

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05 Feb

Daily Market Commentary

Week In Review: Bear Roars As Global Economy Cools

February 5, 2016
By info@50park.com

Earnings And Economic Data Continues To Slow

We are operating with the notion that stocks topped out in 2015 and are now in the early phases of a new bear market (and global recession). In the short term, the action remains very poor on Wall Street. It was another ugly week as the major indices ended lower and several key stocks broke down badly after reporting earnings ($GOOG, $ICE, $LNKD, $DATA, $RL, just to name a few causalities from last week). Stocks snapped a two-week win streak and fell after the latest round of tepid earnings and economic data was released. In bear markets, surprises happen to the downside. If last month’s lows are breached (Jan 20, 2016) we have to expect another “ugly” leg down to follow. So far, the major indices are forming a bearish flag/wedge pattern and that suggests lower prices may follow. We have to keep in mind that global central banks love interfering with markets and have distorted the playing field for years. Any strong intervention may change the playing field and lead to a stronger bounce. Until that occurs, the sellers remain in clear control. The intermediate and long term action remains lousy and we feel it is just a matter of time until the major indices fall 20% from their 2015 highs which officially defines a bear market. Several important areas of the market are already in a bear market (defined by a decline of 20% or more from a recent high) which means it is just a matter of time until the major indices play catch up to the downside. These are some of the important areas that are already in bear market territory: Commodities, The Small Cap Russell 2000 ($IWM), Transports ($IYT), Biotechs ($IBB), Retail ($XRT), Junk Bonds ($JNK), Materials ($XLB), just to name a few.
Monday-Wednesday’s Action: Economic And Earnings Data Continues To Slow

Stocks ended mixed on Monday as oil prices tanked over 6% after a series of weaker-than-expected economic reports were released across the globe. China said it’s official factory gauge fell to a three-year low of 49.4 in January. This was the sixth consecutive monthly decline and missed estimates for 49.6. China’s main stock market, the Shanghai Composite, fell nearly 2%, extending its loss this year to -24%. European data was also weak with the headline Purchasing Managers’ Index falling to 52.3 from 53.2. In the U.S., the data was mixed to less than stellar. Personal income and outlays rose 0.3%, matching estimates. The PMI Manufacturing index came in at 52.4, missing estimates for 52.6. The ISM Manufacturing index sank to 48.2, missing estimates for 48.3. Construction spending came in at 0.1%, also missing estimates for +0.6%. Clearly, economic activity is not healthy.
Stocks fell on Tuesday, led lower by energy, industrial, and material stocks. Financial stocks also fell hard on Tuesday as sellers showed up and continued to relentless sell nearly every sector in the market. Oil prices fell hard on Tuesday and tanked over 11% in the past two trading days alone! That’s a very big decline for a major commodity like oil and tells you everything you need to know about the slowing economy.
Stocks opened lower but closed near their highs as the US dollar fell and oil continued trading like a penny stock, jumping 8% on Wednesday. The weaker dollar helped many commodity areas of the market (gold, silver, oil, etc). Economic news was mixed. ADP, the country’s largest private payroll company, said private employers added 205k new jobs in January, beating estimates for 190k. Elsewhere, more weakness emerged from the service sector of the US economy. The PMI Service index rose to 53.2, missing the Street’s estimate for 53.7. The ISM service index also missed estimates for 55.5, and came in at 53.5.

Thursday-Friday’s Action: Stocks Fall After Jobs Report
Stocks opened lower on but closed higher on Thursday as the US dollar continued to fall gold continued to bounce. Oil prices fell and closed lower on Thursday after encountering resistance near January’s high. More stocks gapped down after reporting lousy numbers. Shares of Ralph Lauren plunged over 20% after reporting a disappointing quarter. Shares of GoPro (GPRO) tanked over 7% after the company lowered their 2016 outlook. In Europe, Shares of Credit Suisse ($CS) plunged to the lowest level since 1991 after the bank posted its first full-year loss since 2008. Shares of Deutsche Bank ($DB) also plunged to the lowest level in over a decade and both stocks are trading below their 2008 lows! That’s with the European Central Bank printing billions of dollars every week to stimulate markets and their lackluster economy. Stocks fell hard on Friday after the government said U.S. employers added 151k new jobs in January, missing estimates for 188k. Meanwhile, the unemployment rates (a level the Fed watches) fell to 4.9% which is the lowest level since the financial crisis.

Market Outlook: A Big Top

From where we sit, this aging bull market is over or on its last breath. The last two major bull markets ended shortly after their 5th anniversary; 1994-2000 & 2002-Oct 2007. The market is deeply oversold so keep in mind the strongest rallies in history occur during bear markets (a.k.a bull traps). As always, keep your losses small and never argue with the tape. If you want exact entry and exit points in leading stocks, or access more of Adam’s commentary/thoughts on the market – Join FindLeadingStocks.com.

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22 Jan

Daily Market Commentary

Week in Review: Stocks Bounce After The Dalio Low

January 22, 2016
By info@50park.com

Stocks Bounce After The Dalio Low

It was another wild week on Wall Street as A near term low was put in on Wednesday. The operative word is A, not THE, near term low. I’m calling last week’s low “The Dalio low” because legendary investor Ray Dalio went on TV last Wednesday (the exact low of the week) and said we might be headed for a depression. On Wednesday, the Dow turned higher after plunging 565 points intra-day and has been edging higher since. Interestingly, on September 29, 2015, Carl Icahn, released his doom and gloom video (I agree with his points) and that marked A near term low for stocks. Over the next five weeks, immediately after the video was released, the S&P 500 soared over 13%! That’s a huge move for the S&P 500. At this point, stocks are deeply oversold and way over due to bounce. Until Wednesday’s lows are breached we have to expect the market to bounce (or at the very least move sideways from here). Oil prices also placed A (not THE) new near term low last week which also helped sentiment. Central banks interfered again this week. China injected $50B to stimulate their market and the European Central Banks (ECB) hinted at more easy money in March. Central banks love interfering with markets and have distorted the playing field for years. Stepping back, any near term rallies (or more easy money aside), the market remains in lousy shape and we feel it is just a matter of time until the major indices fall 20% from their 2015 highs which officially defines a bear market. From our point of view, stocks topped out in 2015 and we are in the early innings of a new bear market (and a global recession). Several important areas of the market are already in a bear market (defined by a decline of 20% or more from a recent high) which means it is just a matter of time until the major indices play catch up to the downside. These are some of the important areas that are already in bear market territory: Commodities, The Small Cap Russell 2000 ($IWM), Transports ($IYT), Biotechs ($IBB), Retail ($XRT), Junk Bonds ($JNK), Materials ($XLB), just to name a few. Finally, if markets can’t bounce from here… Good Night Irene.
Monday-Wednesday’s Action: Stocks Bounce After Dailo Low

U.S., stocks were closed on Monday in observance of the MLK holiday. Stocks traded between positive and negative territory on Tuesday as the S&P 500 retested Aug’s low. Oil negatively reversed and closed down on the day which is not ideal. Overnight, China said its GDP grew by 6.9% for 2015 which was the slowest pace since 1990! Additionally, China said Q4 2015 GDP grew by 6.8% year-over-year which matched estimates. In the U.S., December retail sales grew by 11.1%. Meanwhile, industrial production rose by 5.9%. Both came in below estimates. In other news, The International Monetary Fund (IMF) cut its global economic growth forecast for 2016 on Tuesday. The IMF now believes the global economy will grow by 3.4% in 2016, lower than the last forecast of 3.6%. The fact that the market can’t bounce from these deeply oversold levels continues to show you how weak the market is right now.

At one point, the Dow fell 565 points on Wednesday before reversing around noon and rallying sharply into the close. Oil prices fell to $27/barrel, plunged over 6% and hit a fresh multi-decade low but also bounced and closed off their lows. Japan’s stock market officially entered bear market territory (decline >20% from a recent high) and MSCI all-country world stock market index is also flirting with a bear market as well. In the U.S., the economic data was relatively light. The consumer price index (CPI) fell -0.1%, missing estimates for a reading of 0% which clearly shows that deflation remains more of a threat than inflation right now. A separate report showed that Housing Starts came in at an annualized 1.149 million rate in December for a 2.5% monthly dip while permits came in at 1.232 million for a 3.9% decline. That compares with estimates for 1.200M and 1.217M respectively. Overall, the stock market remains very extended to the downside and is way overdue to bounce in the near term.

Thursday-Friday’s Action: Stocks Bounce From Deeply Oversold Levels

Stocks tried to rally but closed mixed on Thursday after China injected nearly $17B into the system to boost markets and The European Central Bank hinted at more money printing.. Oil prices are trying to stabilize and (so far) are trading above the $30 level. Stocks rallied on Friday as more buyers emerged and oil soared over 7%! Short term rallies aside, the bigger picture still looks very weak for stocks.

Market Outlook: A Big Top

From where we sit, this aging bull market is over or on its last breath. The last two major bull markets ended shortly after their 5th anniversary; 1994-2000 & 2002-Oct 2007. The market is deeply oversold so keep in mind the strongest rallies in history occur during bear markets (a.k.a bull traps). As always, keep your losses small and never argue with the tape. If you want exact entry and exit points in leading stocks, or access more of Adam’s commentary/thoughts on the market – Join FindLeadingStocks.com.

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15 Jan

Daily Market Commentary

Week-in-Review: Stocks & Oil Mauled As We Enter A Bear Market & A Global Recession Nears

January 15, 2016
By info@50park.com

Ask Your Portfolio Manager:
What Are You Going To Do In The Next Bear Market?
If You Don’t Like The Answer, Get In Touch Now

Stocks Mauled On Global Recession Fears

Markets across the globe plunged last week which reiterates our cautious stance. As a quick refresher, we first turned cautious last summer – BEFORE the big crash in Aug 2015 and have been very selective since. Thankfully, we entered the year with a very strong cautious stance and FindLeadingStocks.com’s Model Portfolio actually locked in profits and is now in cash while the market has plunged. The fact that sellers continue to relentlessly sell nearly everything they can get their hands on clearly shows you that we are in the early stages of a new bear market for stocks and a global recession is imminent. Several important areas of the market are already in a bear market (defined by a decline of 20% or more from a recent high) which means it is just a matter of time until the major indices play catch up to the downside. These are some of the important areas that are already in bear market territory: Commodities, The Small Cap Russell 2000 ($IWM), Transports ($IYT), Biotechs ($IBB), Retail ($XRT), Junk Bonds ($JNK), Materials ($XLB), In the short term, the markets remain deeply oversold and way overdue to bounce. The fact that they can’t bounce speaks volumes to how weak the market is right now.
Monday-Wednesday’s Action: Sellers Shows Up With A Vengeance

Stocks traded all over the map on Monday. Overnight, Chinese stocks plunged another 5% which was not idea. US stocks opened higher but quickly turned negative after new sellers showed up and distributed stock. Crude oil plunged over 6% and hit the lowest level since 2003! Copper prices plunged to a fresh 6 year low which illustrates the market’s concern about weaker global demand. The JP Morgan ($JPM) health care conference started which is the biggest health care conference of the year. Biotech stocks ($IBB) fell over 4% and took out September’s 2015’s low which is not ideal for the bulls. In M&A news, Shire ($SHPG) said it will acquire drug maker Baxalta ($BXLT) for $32 billion in cash and stock. Stocks ended higher after vacillating between positive and negative territory on Tuesday as oil prices traded all over the map. In the morning, oil prices up nicely but turned negative and actually fell below $30 a barrel for the first time in 12 years! Stocks turned higher after oil prices stopped falling. Stocks are trying to bounce from deeply oversold levels.The inability for stocks to bounce speaks volumes at how weak the market is right now. Stocks plunged on Wednesday as a new round of selling hit Wall Street. This time the bears went after almost all areas of the market including the big glamour names such as Amazon ($AMZN) and Netflix ($NFLX) that had been holding up rather well in late 2015. The fact that Wall Street can not bounce from deeply oversold levels clearly illustrates how weak the market is right now.

Thursday-Friday’s Action: Stocks Can’t Bounce From Deeply Oversold Levels

The long overdue pullback finally arrived on Thursday after the S&P 500 came within a few points of “retesting” Aug and September 2015’s low. The S&P 500 actually turned higher for the week which is a strong defensive stance in the near term. Several high beta stocks bounced after big investors showed up and defended their longer term 200 DMA lines (FB, HD, NFLX, just to name a few). The market is way overdue to bounce and the key now is to analyze the health of this bounce to see it it lasts more than a few days. That didn’t last long. Stocks fell hard on Friday as oil prices plunged nearly 5%. The fact that they can’t bounce from deeply oversold levels shows you how weak the market is right now. Stocks will be closed on Monday for the holiday but markets overseas will be open.

Market Outlook: A Big Top

From where we sit, this aging bull market is over or on its last breath. The last two major bull markets ended shortly after their 5th anniversary; 1994-2000 & 2002-Oct 2007. As always, keep your losses small and never argue with the tape. If you want exact entry and exit points in leading stocks, or access more of Adam’s commentary/thoughts on the market – Join FindLeadingStocks.com.

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08 Jan

Daily Market Commentary

Week-In-Review: Stocks Mauled On Global Recession Fears

January 8, 2016
By info@50park.com

The Most Important Question to Ask Your Advisor In 2016:
What Are You Going To Do In The Next Bear Market?
If You Don’t Like The Answer, Get In Touch Now

Stocks Mauled On Global Recession Fears

In our intra-week note we wrote, “Allow us to be clear, the major indices are in the process of topping out and barring some large unforeseen reversal to the upside – we are headed into a long overdue bear market for stocks (and possibly a global recession). A few of the major indices are now in correction territory (defined by a decline of 10% from a recent high) while several important sectors (transports, commodities, biotechs, just to name a few) are already in bear market territory. Thankfully, our defensive/cautious stance has been right on the money since last summer (for our newer members, we first turned cautious before the big crash in Aug 2015 and have been very selective since).” This was the weakest first week of a new year in Wall Street’s history. The popular indices were crushed this week with the small cap Russell 2000 breaking below last year’s low and it is now down 19% from its record high. Remember, the media defines a bear market as a decline of 20% or more from a recent high. Oil prices tumbled a whopping 10% last week and Chinese stocks continued to plunge which triggered fresh concerns about a slowing global economy. Meanwhile, several important sectors are already down over 20% from their highs such as the Transports (IYT), Biotechs (IBB), and Retail (XRT), just to name a few.
Monday-Wednesday’s Action: Sellers Shows Up With A Vengeance
Stocks tanked on Monday after a new round of selling began in China. Overnight, Chinese stocks plunged a whopping 7% which triggered a worldwide sell-off. Stocks in China were halted after new circuit breakers were introduced. Monday was the first trading day for the month, quarter and year and the worst opening day for Wall Street since 1932! Stocks were relatively quiet on Tuesday as the market paused to digest Monday’s very sharp sell-off. Reuters reported that the People’s Bank of China (PBOC) injected nearly $20 billion into money markets to help calm markets. That was the largest cash injection since September 2015. This led people to be concerned that China’s central bank was interfering with markets again and using state banks to prop up the yuan at the same time. In the U.S., motor vehicle sales pointed toward a record year. Stocks tanked again on Wednesday as the selling continued to hit markets across the globe. Oil prices plunged over 5% and Gasoline futures plunged over 8% which illustrates how weak global demand is right now. On the economic front, the ADP said private employers in the U.S. added 257k new jobs in December, beating estimates for 190k. Factory orders slid by 0.2% in November matching Briefing.com’s consensus estimate. Finally, the ISM Service Index fell to 55.3 in December missing estimates for 56.4.

Thursday-Friday’s Action: Jobs Report Beats Estimates; Stocks Fall

Stocks opened sharply lower on Thursday after China’s stock market was closed 29 minutes after the when it plunged another 7%, triggering circuit breakers…for the second time this week. China removed the circuit breakers which was just put in place on Monday. Around mid-day Reuters reported that China may devalue its currency by another 10-15% (a huge amount) to help stimulate their lackluster economy. Before Friday’s open, the government said U.S. employers added 292k new jobs, beating estimates for 200k. The stronger than expected jobs report is normal for this point of the cycle (late stage).

Market Outlook: Bull Market Continues To Top Out

This bull market is aging by any normal definition and will celebrate its 7th anniversary in March 2016. The last two major bull markets ended shortly after their 5th anniversary; 1994-2000 & 2002-Oct 2007. As always, keep your losses small and never argue with the tape. If you want exact entry and exit points in leading stocks, or access more of Adam’s commentary/thoughts on the market – Join FindLeadingStocks.com.

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31 Dec

Daily Market Commentary

Year-in-Review: Stocks End 2015 Mixed To Mostly Lower; Commodities Tank

December 31, 2015
By info@50park.com

Stocks End 2015 Mixed to Mostly Lower

Stocks ended 2015 mixed to mostly lower. The S&P 500, Dow Jones Industrial Average, DJ Transports, Small Cap Russell 2000, Mid Cap S&P 400, NYSE Composite all closed in the red. Meanwhile, the Nasdaq composite and Nasdaq 100 ended 2015 higher. The move in the latter two indices was largely due to big moves in a very concentrated area of the market that continues to lead (for now). For the year, the big (deflationary) take-away was that the huge multi-year bear market continued for a slew of commodities. In fact, nearly every major commodity in the world except for Canola, Cocoa and Orange Juice futures ended the the red. That typically is not a healthy sign for other asset classes, like U.S stocks. Remember these are not one-off declines. Gold and silver have been falling since 2011, Oil is down for the second straight year. A slew of other commodities like: Soybeans, wheat, sugar etc are all down for several years and in steep bear markets. All this clearly shows you that demand is waning across the globe. Looking forward, the bullish argument for stocks is twofold: 1. Valuations remain fairly attractive: Bull markets rarely end when the P/E ratio for the S&P 500 is 19 (the last few bull markets ended when the P/E ratio was in the 20’s). 2. Easy Money continues from global central banks. So far, we have never seen a bull market end with the Fed keeping rates at 0.25% and other central banks printing billions of dollars everyday to “reflate” markets. That doesn’t mean the bull market can’t end now – just that we haven’t seen it happen before. On the other hand, the bears argue that the bull market is nearly 7 years old and the market is forming a large topping pattern as leadership dries up. Both factors are classic signs of late-stage toppy action. What does all this mean for you? A defensive stance is prudent until more cards come out of the deck. We remain flexible and will be prepared for either scenario to unfold. If the major indices breakout of their year-long trading ranges (S&P 500 2,134) then odds favor we head higher. Conversely, if we break down below Aug’s low (1867), odds favor we head lower. Until then, we have to expect this choppy action to continue.
Monday-Thursday’s Action: Final Week Of Year Is Quiet on Wall Street

Stocks fell on Monday as concerns regarding the global economy resurfaced. Oil prices slid over 3% after jumping 9% in the prior week. The fact that oil prices are trading like a penny stock (wild swings, up and down) bodes poorly for U.S. stocks. In the U.S., the Dallas Fed manufacturing index plunged to -20.1 in December, missing estimates for -6.0. The index slid 15.2 points following the 7.8 point improvement to -4.9 in November. That was the lowest reading since May’s -20.8, and the index has been in contraction territory all year thanks to the oil-related recession. Furthermore, the index has not been above zero since December 2014. In other news, distressed debt levels jumped to the highest level since the Great Recession. The number of companies with the lowest credit ratings and negative outlooks vaulted to 195 this month which is the highest level since March 2010.
Stocks rallied sharply on Tuesday after investors moved money into a slew of big cap glamour stocks. Amazon.com (AMZN) and Alphabet (GOOGL) broke out to new highs and have enjoyed very strong gains in 2015. On the economic front, the S&P Case-Shiller index rose by 0.9%, beating estimates for a gain of 0.6%. A separate report showed consumer confidence rose to 96.5, also beating estimates for 93.5.
Stocks were relatively quiet on Wednesday as oil prices fell over 3%. Just to put that move in the proper perspective, that translates to over 530 Dow points. Imagine the Dow swinging 500-1000 points a day. That is roughly what oil has been doing over the past few months. Remember, oil is in a steep bear market and wild swings (up and down) are common in bear markets. Elsewhere, Pending home sales fell by 0.9%, missing estimates for a gain of 0.5%. This was the third decline in the past four months. Stocks slid on Thursday which was the final trading day for the month, quarter and year. Stocks were closed on Friday for New Years.

Market Outlook: Aging Bull Market

This bull market is aging by any normal definition and will celebrate its 7th anniversary in March 2016. The last two major bull markets ended shortly after their 5th anniversary; 1994-2000 & 2002-Oct 2007. The fact that easy money is here to stay (for now) is all that matters. Everything else is noise. Eventually that will change, but for now the bulls remain in control. As always, keep your losses small and never argue with the tape. If you want exact entry and exit points in leading stocks, or access more of Adam’s commentary/thoughts on the market – Join FindLeadingStocks.com.

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24 Dec

Daily Market Commentary

Week-In-Review: Santa Visits Wall Street Early On Shortened Holiday Week

December 24, 2015
By info@50park.com

Stocks Back To Break-Even For The Year

Stocks rallied sharply last week, led by beaten down areas (energy, materials, transports, etc) that bounced from deeply oversold levels. Not much changed last week as the same underlying conditions, we have outlined for you in recent months, continue to exist beneath the surface. The S&P 500 is back to breakeven for 2015 and the best trade of the year has been a counter-trend mean-reversion trade. Meaning, short the index when it is in positive territory and buy it when it dips into negative territory. This year has been an anomaly because most years we see the market trend (either up or down), rarely does it finish flat the year. The last time it was flat for the year was 2011 and that led to a strong rally 2013-2015. The big difference was that in 2011, the bull market was only two years old and it is turning 7 in March 2016. Clearly, we are very late in the game. That doesn’t mean the bull market has to end, just that odds favor we are getting closer to the inevitable end. The bullish argument is twofold: 1. Bull markets rarely end when the P/E ratio is 19 for the S&P 500 (the last few bull markets ended when the P/E ratio was in the 20’s) and 2. We have never seen a bull market end with the Fed keeping rates at 0.25%. That doesn’t mean the bull market can’t end now – just that we haven’t seen it happen before. On the other hand, the bears argue that the bull market is nearly 7 years old and the market is forming a large topping pattern as leadership dries up. Both factors are classic signs of late-stage toppy action. What does all this mean for us? We remain flexible and will be prepared for either scenario to unfold. If the major indices breakout of their year-long trading ranges (S&P 500 2,134) then odds favor we head higher. Conversely, if we break down below Aug’s low (1867), odds favor we head lower. Until then, we have to expect this choppy action to continue.
Monday-Thursday’s Action: Stocks Bounce From Deeply Oversold Levels

Before Monday’s open, stock futures were up by over 100 points and that led to a nice open on Wall Street. However, the buying didn’t last and stocks turned negative by mid-day after several important areas of the market turned negative. To help offset China’s slowing economy, Chinese leaders said they intend to make monetary policy more “flexible” as the government prepares more stimulus measures. This may become a major shift in the easymoney period we have seen from global central banks. China’s Central Bank, The People’s Bank of China, is entertaining the notion of removing its benchmark deposit and lending rates. Instead, the Central Bank, will create an “interest-rate corridor” to guide borrowing costs after policymakers scrapped a deposit-rate ceiling in October. Never a dull moment in Central Bank land.
Stocks rallied nicely on Tuesday as the pre-holiday bump continued and investors digested the latest round of mixed economic data. The government said U.S. GDP rose by 2% in Q3 2015, beating estimates for a gain of 1.9%. Weaker data emerged from the housing market. Briefing reported that existing home sales fell by -10.5% to a seasonally adjusted annual rate of 4.76 million, missing their estimate of 5.30 million. The big drop followed a downward revision to sales in October from 5.36 million to 5.32 million and was the first time since January-February 2014 that existing home sales have declined in two consecutive months. Finally, the big drop in November left existing home sales down -3.8% from a year ago, which is the first year-over-year decline since September 2014. Energy and material stocks led Wall Street higher as they bounced from deeply oversold levels.
Before Wednesday’s open, investors digested a slew of economic data. Durable goods orders were flat (unchanged) in November, beating estimates for a decline of -0.5%. U.S. personal income increased by 0.3% beating estimates for a gain of 0.2%. In the 12 months through November, the personal consumption expenditures (PCE) price index rose by 0.4% after rising 0.2% in October. Core prices, which exclude food and energy, rose by 0.1% after being unchanged in October. Meanwhile, U.S. consumer spending grew by 0.3% last month after a flat reading in October. Consumer sentiment came in at 92.6, barely topping estimates for 92.0. Finally, new home sales came in 490k, missing the Street’s forecast for 503k.
Stocks were quiet on Thursday after jobless claims fell to a 42-year low and Wall Street closed at 1pm EST. Stocks were closed on Friday for Christmas.

Market Outlook: Aging Bull Market

This bull market is aging by any normal definition and will celebrate its 7th anniversary in March 2016. The last two major bull markets ended shortly after their 5th anniversary; 1994-2000 & 2002-Oct 2007. The fact that easy money is here to stay (for now) is all that matters. Everything else is noise. Eventually that will change, but for now the bulls remain in control. As always, keep your losses small and never argue with the tape. If you want exact entry and exit points in leading stocks, or access more of Adam’s commentary/thoughts on the market – Join FindLeadingStocks.com.

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04 Dec

Daily Market Commentary

Week-In-Review: Stocks End Volatile Week Mixed

December 4, 2015
By info@50park.com

Bulls Still In Control

Stocks ended a volatile week relatively unchanged as the bulls showed up on Friday and sent stocks soaring. Remember, we are in a bull market and the fact that stocks refuse to fall (even on bearish news: terror attacks, talk of World War III, lousy economic data, negative Q3 earnings comps, etc) reaffirms the view that weakness should be bought. Remember, it’s not the news that matters but how the market reacts to the news. At this point, the market is still range-bound as the S&P 500 is barely positive for the year. In the short term, support is the 50 DMA line and then Aug’s low while resistance is 2116 and then 2134. Until 1867 (important support) or 2134 (important resistance) is broken, by definition, we have to expect this sloppy/choppy action to continue. 2011 the S&P 500 was “flat” for the entire year and that set the stage for a strong 2012-2015. The big difference between 2015 and 2011 is that we are now 6.75 years into this bull market and in 2011 the bull market was only two years old. So far, all that matters is the free money that is sloshing around the world from global central banks. As long as stocks react well to the Free/Easy money, we do not want to fight this very strong tape.

Monday-Wednesday’s Action: Stocks Trade All Over The Map

On Monday, stocks slid on the last trading day of November. In other news, shares of Staples (SPLS) slid by -2.0% after the New York Post reported the company’s acquisition of Office Depot (ODP) may likely hit a regulatory obstacle. On a separate note, the International Monetary Fund said they will include China’s currency (the yuan) to the special drawing rights basket, meaning five currencies will be represented in the SDR starting October 1, 2016. The move will allow the yuan to make up nearly +11.0% of the SDR, which is a smaller weighting than the currency had been expected to receive. U.S. economic news missed estimates: Chicago PMI came in at 48.7, missing estimates for 54. Pending home sales rose by 0.2%, missing estimates for a gain of 1%. The Dallas Fed Manufacturing survey fell to negative -4.9, which actually beat estimates for a negative -11 but the fact that it is still in negative territory signals contraction. On Tuesday, stocks rallied nicely on the first trading day of December. The PMI manufacturing index came in at 52.8, barely beating estimates by 52.6. The ISM manufacturing index rose to 48.6, missing estimates for 50.5. Construction spending in the US rose 1%, beating estimates for a gain of 0.6%. Stocks fell on Wednesday after ADP, the country’s largest private payrolls company, said US employers added 217k new jobs in November, beating estimates for 183k. Dr. Yellen spoke and made the case for raising rates in December. Separately, the Fed’s Beige Book was released which showed economic activity improved “modestly” across much of the country which will not prevent the Fed from raising rates.

Thursday & Friday’s Action: Stocks Fall Then Rally

Markets traded all over the map on Thursday because investors were disappointed that the European Central Bank (ECB) did not increase QE (print more money). The ECB took rates further into negative territory (to -0.3%, from -0.2%), extended QE from Sep 2016 to March 2017 but did not increase QE from their 60B monthly rate. The last point disappointed investors and sent stocks across the globe sharply lower. The USD plunged and the euro soared on the news. Economic data was not impressive. The ISM Non-Manufacturing Index for November fell to 55.9 from 59.1 while the Briefing.com consensus expected an increase to 58.3. Meanwhile, October Factory Orders rose 1.5% while the Briefing.com consensus expected an increase of 1.1%. Before Friday’s open, the Labor Department said US employers added 211k new jobs, beating estimates for 200k. US stocks rallied on the news which basically gave the Fed the green light to raise rates when they meet on Dec 15-16. On Friday, Mr. Draghi came out and juiced markets when he said “there is no particular limit to how we can deploy any of our tools.” He added the risk of deflation is “firmly off the table.” Stocks extended to gains on the news.

Market Outlook: Aging Bull Market

This bull market is aging by any normal definition and will celebrate its 7th anniversary in March 2016. The last two major bull markets ended shortly after their 5th anniversary; 1994-2000 & 2002-Oct 2007. The fact that easy money is here to stay (for now) is all that matters. Everything else is noise. Eventually that will change, but for now the bulls remain in control. As always, keep your losses small and never argue with the tape. If you want exact entry and exit points in leading stocks, or access more of Adam’s commentary/thoughts on the market – Join FindLeadingStocks.com.

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Oversold Bounce Continues…For Now

Market Outlook: Rally Continues On Wall Street

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Oversold Bounce Continues…For Now

Market Outlook: Bear Market Rally

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Stocks Bounce From Deeply Oversold Levels

Market Outlook: A Big Top

Earnings And Economic Data Continues To Slow

Market Outlook: A Big Top

Stocks Bounce After The Dalio Low

Market Outlook: A Big Top

Ask Your Portfolio Manager: What Are You Going To Do In The Next Bear Market? If You Don’t Like The Answer, Get In Touch Now

Stocks Mauled On Global Recession Fears

Market Outlook: A Big Top

The Most Important Question to Ask Your Advisor In 2016: What Are You Going To Do In The Next Bear Market? If You Don’t Like The Answer, Get In Touch Now

Stocks Mauled On Global Recession Fears

Market Outlook: Bull Market Continues To Top Out

Stocks End 2015 Mixed to Mostly Lower

Market Outlook: Aging Bull Market

Stocks Back To Break-Even For The Year

Market Outlook: Aging Bull Market

Bulls Still In Control

Monday-Wednesday’s Action: Stocks Trade All Over The Map

Thursday & Friday’s Action: Stocks Fall Then Rally

Market Outlook: Aging Bull Market

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Ask Your Portfolio Manager:
What Are You Going To Do In The Next Bear Market?
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