Category Archives: Forecasts

Rising Volatility In the Coming Weeks

Everything is going so well in the earnings season, the 10-year treasury yield has come down, the economy is on fire and the VIX has come down to pre-COVID level.  What could go wrong?  A lot could be wrong when everyone is so bullish.  The stock market is never without any worries.

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Calm Before Earnings Season

The NASDAQ (mainly supported by the big tech) broke out on the first day of April and continued to rally quietly last week.  The DOW and S&P 500 continued to make all time highs while the VIX dropped below the pre-pandemic level.  From the stock market point of view, COVID-19 didn’t happen.  Or it happened, but it was quickly erased from memory.

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Inflation and Tech Stocks

There are a lot of chatters about the coming inflation and higher interest rates as the reasons for the recent NASDAQ selloff.  Wall Street has been talking about the rotation from high priced growth stocks into value stocks which are cyclical and more closely connected to the state of the economy.  

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The DOW Is Curiously The Laggard

Last week the NASDAQ and small cap Russell 2000 had a great week, yet the DOW is lagging, just can’t breakout the 31,200 level on closing basis.  The weekly oscillators have turned down despite the DOW making a new intraday high last week.  The DOW’s highest weekly closing occurred two weeks ago.  Why the divergence?

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A Rare Regime-Change Economic Policy Is Under Way

On last Thursday (10/08/20200) we sent out a private note stating that the small cap Russell 2000 index is breaking out in the midst of fiscal stimulus package negotiation.  This is the first time ever that the Russell 2000 index is outperforming the Dow and S&P 500 since the Russell 2000 index topped in August 2018.

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