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  • Most strategists we follow believe the longer-term trend it up

    Posted by Larry Berman

    Opinions on the outlook for the S&P 500 from the strategists we like to follow are similar. Most believe the longer-term trend is up, which we agree, but almost all concede that a 10%+ correction ...

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  • Most strategists we follow believe the longer-term trend it up
    Posted by Larry Berman on 
    Tuesday, April 22, 2014 1:06 PM

    Opinions on the outlook for the S&P 500 from the strategists we like to follow are similar. Most believe the longer-term trend is up, which we agree, but almost all concede that a 10%+ correction can’t be ruled out. The best bet is that the next few months will see lots of sideways chop as the bulls and bears battle it out. There are 153/500 S&P 500 stocks that are already 10% off 52 week ...

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  • Help me "Stick it to Alzheimer's!"
    Posted by Larry Berman on 
    Tuesday, April 22, 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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  • The increased choppiness in the S&P 500 is troubling
    Posted by Larry Berman on 
    Monday, April 21, 2014 3:08 PM

    The increased choppiness in the S&P 500 in recent weeks without a material change in volatility is troubling. Sentiment readings remain remarkably benign. We expect to see a break of the 200-day average in the next few months. How it plays out is hard to know with certainty. Enthusiasm for better earnings could lift the market to new highs first, but that is a lower probability right now. Shif...

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  • The energy sector continues to grind higher
    Posted by Larry Berman on 
    Thursday, April 17, 2014 10:49 AM

    The energy sector continues to grind higher. It's frustrating at times understanding when the longer term fundamentals will kick in as we are watching the somewhat irrational near term behaviour. Yesterday we saw a news story suggesting crude oil prices were rising due to tension in Russia and Ukraine. That reporter should be charged with a complete lack of due diligence and the analyst or trader ...

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  • The S&P 500 tested 1815 support three times in three days
    Posted by Larry Berman on 
    Wednesday, April 16, 2014 9:14 PM

    The market is still in breakdown mode. We tested 1815 support three times in three days and it held. For the next few days the market could continue to bounce on earnings, but it should not bounce too hard. We covered half our short position yesterday because the price action suggests as much. Volume was up a bit, but unusually low for such a violent intraday swing. VIX is low and volatility is hi...

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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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  • 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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