All week long the markets played cat and mouse with support. Finally on Friday, it looked as though the bears had won as they drove the S&P 500, Dow and NASDAQ below their various support levels. It was not a pretty picture. And yet, the bulls rallied back. (more…)

It was a short week on Wall Street in more ways than one. The Dow joined NASDAQ in Bear territory (20% off their peaks) and the S&P 500 is perilously close to making it a trio. Crude oil, on the other hand, continues to break records driving the markets even lower as well as General Motors. The automaker hit historical lows as investors sold its stock fearing GM might not survive in the face of higher gas prices. As of Thursday, the S&P 500, after testing support at 1256, finished the day at 1262 on thin pre-holiday volume. It was not at all convincing. (more…)

My answer in one word is no. That’s not to say the markets won’t go lower. They will. But it appears to me that we are testing the bottom for the third time this year and three is usually a magic number.

It appears the “sell in May and go away” slogan was simply postponed a month this year. June witnessed over an 8% decline so far in the Dow Jones Industrial Average reaching a level last seen in 2006. On Friday it crossed into official bear territory with a full 20% decline from its peak in October of last year. That’s important because once an index declines 20% it is officially in a bear market. The NASDAQ has already attained that dubious position leaving only the broader, more representative S & P 500 still officially “only” in a correction although it was down almost 9% in June. (more…)

Oil has held the world’s stock markets hostage for several weeks now and this week was no different. What is different however is that the S&P 500 broke a key support level at 1325 on fairly heavy volume However, Friday was also an options expiration date when funny things happen to stocks that have nothing to do with valuations. So I’ll give the market the benefit of the doubt until Monday’s close. If the market regains support and moves higher that would be a good sign. If it doesn’t the next stop will be 5-6% lower. (more…)

Pity poor Ben Bernanke and his men of the Federal Reserve! Caught between rising inflation and a declining dollar on one hand and an economy teetering on the edge of slow to no growth he has few options. This week he tried one time-honored approach—jawboning. (more…)

It was a “Back to the Future” week on Wall Street. Reminiscent of this winter’s wild swings in the averages, investors were running first for their foxholes and then a day or even a moment later buying at the market in an effort to get in on the upside. On the surface, there were many reasons for the volatility–oil, the dollar, the unemployment data, European interest rates and the Federal Reserve’s worries about the economy. But to me it all comes down to one word: stagflation. (more…)

A few columns ago I suggested that investors would be better served by moving out of Treasury bonds, CDs and money markets into higher yielding instruments. My motivation for that advice was two fold: the Federal Reserve had cut rates as far as it thought reasonable and my conviction that inflation was moving higher. That proved to be the correct call. Today I am sounding a warning that the price of 30 year Treasury bonds (called the Long Bond) are poised to move lower. It will be the first of many moves as interest rates climb higher. (more…)

In homage to Jack Kirby, the creator of one of my favorite comic book heroes, the Fantastic Four, we took the liberty of casting oil as Doctor Doom, the Fab Four’s arch nemesis in this column. Given the monumental angst over black gold all week it is appropriate. (more…)

Ever notice that when the stock market goes up the number of negative stories dwindle while those with titles like “Recession? Not So Fast, Say Some” or “Why Inflation May Not Get out of Control” pop up daily? I call it the “confirmation effect” meaning that the media needs to justify why markets do what they do. (more…)

The markets spent the week trading in a tight range with only one day recording more than a one percent swing in prices and that day was down. After the bull run of the last few weeks a period of consolidation is not surprising. It is actually encouraging since a lot of stocks and sectors were getting “over bought” as traders would say. (more…)