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What’s Next, Break Out Or Breakdown?

  • Written by Syndicated Publisher 2 Comments2 Comments Comments
    February 23, 2014







    Other Voices:

    Ben Levisohn, Barron’s: “Some 166 companies in the S&P 500 have offered guidance for 2014, and just 25% said they’ll earn more than analysts had predicted, down from 36% a quarter ago, according to Wolfe Research data. At the same time, analysts have been cutting their earnings-growth forecasts, so they now expect 9.5% median earnings growth this year, down from 11.5% at the start of 2014.”

    Tobias Levkovich, Citigroup: “Our Panic/Euphoria model bounced higher and is in euphoria territory. This week’s Panic/Euphoria reading was 0.56; versus last week’s revised number of 0.50. Euphoria readings indicate the market may retreat with an 83% historical probability of losses in the next 12 months.”

    Market Sentiment


    Wall Street Journal: “Small Investors Are Back in the Trading Game.” Individuals are ramping up trading at discount brokerages. . . . . They also are borrowing more against their portfolios to increase their bets. In December, margin debt hit an all-time high of $444.93 billion, not adjusted for inflation, up 35% from a year earlier, according to the New York Stock Exchange. Analysts said the 30% jump in the S&P 500 index last year, the biggest since 1997, and a strong run of initial public offerings rekindled interest in stocks. The increased trading activity reflects “a level of engagement we have not seen for quite some time,” said Matthew Audette, chief financial officer at E*Trade. . . . . The risk is that investors are barreling into stocks at the tail end of a historic rally. The S&P 500 has risen 171% since its March 2009 low. . . . Individual investors “systematically over the last seven years have bought high and sold low,” said David Edwards, president of New York-based Heron Financial Group LLC.”

    Market Watch: ‘Risk On! Investors Run Back Into Stock Funds At Fastest Pace In 3 Months.’ “Investors, including mom and pop, came running back to the market after its late-January/early February stumble, with data on investment flows showing that risk appetite is once again on the rise.  . . . . Emphasizing the “risk-on” theme, Bank of America Merrill Lynch noted that flows into high-yield bonds were also the strongest in 17 weeks at $2.4 billion. And money-market funds saw a $40.45 billion outflow versus an $11.55 billion inflow the previous week.”

    To read my weekend newspaper column click here: Markets Are Still Loving The Economy’s Increasing Problems

    Images: Flickr (licence attribution)

    About The Author – Sy Harding, Street Smart Report

    Sy Harding publishes the financial website Street Smart Report Online and a free daily Internet blog at Sy’s Free Blog. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!

    It includes our research and analysis on the economy and markets, and provides charts and buy and sell signals on the major market indexes, sectors, bonds, gold, individual stocks and etf’s, including short-sales and ‘inverse’ etf’s.

    It provides two model portfolios as guides. One is based on ourSeasonal Timing Strategy, one on our Market-Timing Strategy.

    In depth updates are provided every Wednesday, with interim ‘hotline’ updates every time we make a trade. An 8-page traditional newsletter Street Smart Report is provided on the website every 3 weeks, in pdf format for viewing or printing out.

    There is the Street Smart School of online technical analysis ‘seminars’,commentaries to keep you ‘street smart’ about Wall Street, and much more. 


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