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Recent Postings

  • People are getting anxious on both side of the ticket

    Posted by Larry Berman

    Volume was about 11% less than the 3 month average yesterday, which was an amazing feat considering the huge volatility swing on the day. The opening gap was completely reversed and then the market ra...

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  • People are getting anxious on both side of the ticket
    Posted by Larry Berman on 
    Tuesday, April 15, 2014 9:56 AM

    Volume was about 11% less than the 3 month average yesterday, which was an amazing feat considering the huge volatility swing on the day. The opening gap was completely reversed and then the market rallied violently into the close. Increased volatility like this is often a negative indication, not a positive one unless the market is deeply oversold, which it is not. It means people are getting anx...

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  • Help me "Stick it to Alzheimer's!"
    Posted by Larry Berman on 
    Tuesday, April 15, 2014 8:48 AM

    January is Alzheimer’s awareness month and all may recall that last year I participated in a brain study at Baycrest Hospital to benefit victims of brain injury. This year I’m creating a study that compares individual investors’ (largely BNN viewers) cognitive and emotional investing choices against trained industry professionals. The goal is to determine where professionals make better cognitive ...

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  • Key support levels broke last week
    Posted by Larry Berman on 
    Monday, April 14, 2014 4:00 PM

    Key support levels broke last week and there is likely more downside to go in the coming weeks. The market is not oversold enough to generate much more than a few days of support and much of that will depend on earnings from key companies like INTC, CSX, JNJ, KO, IBM, GOOG, DD, GE, SLB, and GS. Not that the others aren’t important, but category leaders are trendsetters. Futures gapped down overnig...

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  • Yesterday’s S&P 500 decline was on only slightly elevated, but not extreme volume
    Posted by Larry Berman on 
    Friday, April 11, 2014 9:57 AM

    Bearish=A massive down day taking out all support reversing the weak bounce of the past few days. The last time we broke the 50-day average there were at least two waves of high volume selling to follow. Yesterday’s decline was on only slightly elevated, but not extreme volume. It was a 90% plus downside day meaning most stocks went down. There is extreme valuation and speculation in the high flyi...

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  • World trade is slowing and commodities demand is likely to be soft
    Posted by Larry Berman on 
    Thursday, April 10, 2014 10:08 AM

    The Chinese trade numbers were very weak last night—it is clear that world trade is slowing and the demand side for commodities is likely to be soft for the next few years until China settles to a new equilibrium. It is likely to be a challenging few years for China managing a cooling of their real estate bubble and higher risk corporate bond market. Recall that Chinese demand for stuff drover the...

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  • The 50-day average was tested and held
    Posted by Larry Berman on 
    Wednesday, April 09, 2014 11:05 AM

    The 50-day average was tested and held as per typical playbook. Now here are the questions to consider. Is the selling done? Have the somewhat exuberant “fast money” stocks settled? Will there be a rotation to selling in other sectors? When will the much overdue 10% correction come? One big concern for us is that the NASDAQ is trading at 32x earnings and earnings growth in tech is expected to be m...

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  • Initial test of support at the 50-day average at 1840 should hold
    Posted by Larry Berman on 
    Tuesday, April 08, 2014 11:23 AM

    After two days of higher volume selling, the S&P 500 initial test of support at the 50-day average at 1840 should hold. In late January, we saw some buying for an intra-day bounce, but once it broke it broke hard. We suspect a similar price behavior this time around. The relative rotation in sectors and around the world suggests there has not been a capitulation yet and before this market can ...

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  • S&P 500 chart showed a very bearish failed breakout to new highs
    Posted by Larry Berman on 
    Monday, April 07, 2014 4:17 PM

    The weekly S&P 500 (SPY, IVV) chart showed a very bearish failed breakout to new highs and a close below where it opened the week. The Russell 2000 (IWM) had a more bearish pattern failing to make a new high and closing near the low of the past month, where the NASDAQ 100 (QQQ) was as negative as small caps and closed even lower. Often when a market fails to hold a breakout and closes well bac...

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  • Canada’s employment numbers were good, but most were part-time jobs
    Posted by Larry Berman on 
    Friday, April 04, 2014 9:35 AM

    Canada’s employment numbers were good, but most were part-time jobs. The biggest impact is likely to be seen in the Canadian dollar strengthening a bit in the coming days, but we would not expect it to change the trend. The good employment report in the US in theory should continue to break the S&P 500 to the upside, but the divergences are building. Very few sectors are confirming the breakou...

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  • The energy sector outlook is improving
    Posted by Larry Berman on 
    Thursday, April 03, 2014 9:04 AM

    Despite the new highs for the TSX, the sum of the parts analysis suggests we need to raise cash as it goes higher. The energy sector outlook is improving as we wrote about 18 months ago when the sector was very depressed. The expectation of selling Canadian O&G at world prices would change. Our expectation was that it was a 2015/2016 event, but the market appears to be pricing this in now. Tha...

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