This month’s CPI reading of 9.1% marked a 40-year high, despite the Fed’s efforts to tame inflation. GDP numbers for Q2 were published and the US economy shrank for a second consecutive quarter. GDP US Chained 2012 Dollars QoQ SAAR (GDP CQOQ Index) 12-months Despite the general rule to identify a recession, the fall of Read More
From the Trading Desk: Six Months in Review
We are now halfway through 2022 and it has been such a wild start of the year. The S&P 500 Index had its worst half a year since 1970 with losses of over 20%, the NASDAQ Composite fell more than 29% and the Bitcoin Reference Rate was down over 60%. This environment is nothing like Read More
Spotting a Bear Market?
The bear market in stocks in 2022 began like most others in history: with a deterioration in the number of companies participating in the market uptrend. Initially weakness is seen in the smaller more speculative stocks and over time it migrates into the large capitalization companies. In the end, no stock is spared as selling Read More
From the Trading Desk: The Next Market Catalyst
Last week the S&P 500 Index experienced its 7th consecutive weekly decline while the list of companies reporting weaker Q2 forecasts keeps growing. Big retailers such as Walmart and Target slumped after cutting outlooks amid inflation pressure on future profits. As I write this, retailers have recovered some losses after Macy’s and Dollar Tree raised their Read More
A Fundamental Flaw: Psychology Trumps Fundamentals in a Bear Market
Psychology is the great underappreciated variable in investing and trading that magnifies the underlying fundamentals and consequently exacerbates price trends. Perhaps the following John Templeton quote states it best: “Bull markets are born on pessimism, grown on skepticism, mature on optimism and die on euphoria. The time of maximum pessimism is the best time to Read More