June Swoon

 

This week the stock market was actually down three days in a row. It caught many investors off guard, but by the end of the week, traders were expecting the dip buyers to arrive. They did not disappoint. (more…)

 

Over the next decade roughly 75 million Americans will retire. While most of us are well-aware of the need to plan, save and invest for that momentous moment, very few of us are actually prepared for the non-financial challenges of retirement itself. (more…)

 

When the allies invaded the coast of Normandy on June 6, 1944, no one knew how much was at stake. It was a risky move that not only put an end to years of bloodshed within Europe but also ushered in a new world order that continues today. European leaders are hoping that their central bank’s actions this week will provide an economic D-Day of their own. (more…)

 

There is a growing national buzz among scientists and engineers over a driveway in Idaho.  This green-hued stretch of hexagonal tiles of hardened glass in an Idaho suburb represents one prototype idea for revolutionizing the nation’s highways. It could be a road to the future.   (more…)

The Last Hurrah

 

This holiday-shortened week saw all three market averages grind higher. At the same time, interest rates declined to levels not seen since the Fed announced their intent to taper stimulus last spring.  Welcome to the new world where both bond and stock investors make money. (more…)

Holy Cow

 

While shopping for my Memorial Day cook-out last weekend, I experienced a lethal dose of sticker shock.  Steaks, roasts, spare ribs, pork loin, even ground beef were commanding prices that were a good five to nine percent higher than they were at the start of the year.  Unfortunately, it appears prices will go higher still in the months ahead. Here’s why. (more…)

You can’t keep a good market down, so why is everyone so darn worried about the stock market? Could it be that too much of a good thing may be dangerous to your financial health? If so, someone should tell the bulls.

Truly, no one should be complaining. Here we are at the end of May, normally a month where the markets come under selling pressure, and we are a mere five points away from the S&P 500 Index’s all-time high. The contrarian in me says that too many people are waiting for the shoe to drop right now, so it probably won’t.

Officially, it is the Memorial Day weekend that kicks off the herd migration from Wall Street’s gray canyons and valleys to more amenable vistas. Highly-polished Wing-tips are exchanged for Gucci sandals, as the high and mighty head for the over-crowded beaches and multi-million dollar “cottages” of Long Island and the Hamptons.

Those who remain are the young and ambitious. Without much trading authority, they will have a hard time moving markets. Nonetheless, they will attempt to make a killing for their bosses at the expense of the rest of us. As market volume dries up this summer, it is a toss-up on whether markets become even more volatile or simply wallow in apathy and neglect.

In my career, I have seen both during the summer doldrums. In recent years, the markets have tended to be more volatile with fairly large declines in June and July. In other periods, you could hear a pin drop for weeks at a time on New York trading floors. I’m betting we see more volatility than less.

While the markets continue to grind higher so does the short interest in the stock market. Short interest is the quantity of stock shares that investors have sold short but not yet covered or closed out. Many strategists use short interest as a market-sentiment indicator, since it indicates how many investors think a stock’s price (or market) is likely to fall. Both the short interest aggregate dollar amount of the S&P 500 Index and short interest ratio (days to cover or buy back these shorts) are at levels not seen since mid-2007. We all know how that ended for investors. The markets continued to make new highs until the end of the year and then subsequently crashed in 2008-2009.

Last week the markets touched my S&P 500 Index target of 1,900—briefly.
It was so quick that I half hoped we would make another stab at that level and possibly break it. It appears we are trying to accomplish that as I write this. Markets are never neat and tidy so if we break this level to the upside, I would expect a bout of short-covering which could propel the markets higher by another 20-40 points quickly. At the same time, I think too many people are bearish for a sell-off right here and now. If we were to see a fast jump higher and a panic stampede into the market at that time we just might be set up for a last hurrah.

Have a happy Memorial Day weekend. But while you are grilling, swimming or just plain having fun, do me a favor. Take a moment to remember our servicemen and women both past and present. I know I will be remembering my buddies in Vietnam that didn’t make it. Semper Fi.

 

 

 

 

 

Financial gurus have come up short in explaining exactly why interest rates are going down, and not up, as everyone expected them to do. The same thing is happening overseas. What gives? (more…)

 

The S&P 500 Index hit 1,900 this week. The Dow Jones Industrial and Transportation averages also reached new historical highs but the euphoria lasted about a minute and a half. That’s about as long as it took for traders to sell into the move. Not good. (more…)

 

Can you count the number of potholes you hit or narrowly avoid every day?  Do they make your blood boil, teeth clench and trigger a choice euphemism or two during your commute?   Unless the Highway Trust Fund (HTF) receives a $302 billion injection of funds this year, it could get a lot worse. (more…)