The Quick Takes Pro blog by Michael Kahn, CMT about anything that might affect your portfolio.
Michael, Given the light volume and tepid action, and in light of your preceding posts over several days seeming to foreshadow a plunge, what is your take on where equities are headed, the uptake on this week's treasury auction and the ultimate resolution of the EU quandary (in no particular order)?
Michael,These might not qualify as completely technical, but...1. Like TomOfTheNorth mentioned, any updates to your Feb. 15th(?) drop?2. In regards to volume ... can the usual volume movers be separating their orders into smaller chunks (ie. US and CitiGroup)? As you have mentioned since the past technicals are not working we have to change, so maybe the volume movers have changed how they buy/sell.3. During the last big drop I believe you mentioned about P/E and P or E is going to change. Are bulls winning because:a. Short floats are highb. P/E is changing c. Or everyone is waiting for directionJust some thoughts
Hey Michael,It seems like the average investor out there is moving into bonds not stocks.Can you apply TA to the bond market?Is this a bubble or just plain good sense in a deflationary environment?Paul O'Cuana
Michael, your second comment hit my concern directly: the slowing of economic growth in the US (in fact, globally) and when will the market recognize this. Punits from Bill Gross to you have written about this and yet the market seems to be looking back at growth/PE ratios from last year to this year. For years a PE of 15 made sense for the S&P 500, with slower growth seemingly in the cards for at least the first half of this decade, will investors continue to pay slower growth?
Tom,It would give me no greater pleasure and certainly relieve my stress if I could short everything. But the trend is still up, stimulus or no stimulus. Trade what you see.As for Treasuries, don't know what top do about auctions but I see a monster support in the long bond than must, must hold.EU? The ultimate resolution is to let capitalism and free markets work. Of course, "they" won't let that happen and things just drag on.
jdesko,You can appreciate that I cannot really update forecasts here. Paying subscribers would not like that. However, I ran a piece ion the newsletter Tuesday suggesting that volume really is working - if we pull out to the big picture. It was pretty heavy on the January decline.Finally, P/E - it looks like E was reduced so /E ratios expanded. That supports the rally/OK, I lied, one more - yes everyone is waiting for direction. If the market starts to crack, I will bet anyone that volume soars.
paul,TA works great on bonds. Indeed, it works better on anything that is not stocks (and is liquid). John Murphy defines deflation as everything doing down except case. that means bonds sag, too, as rates go up.Corporate bond bubble? Same as stocks.
Steven,You are too deep into the fundamentals for me but the public i not really buying anything. Institutions will run to the hills when the Fed steps out.
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