Last Week: The market continued its recent rebound, as the narrative has shifted to include a more dovish Fed policy as well as a positive resolution of the trade war with China. The momentum-based trading models (are there any other trading models these days?) all flashed “buy, buy, buy!” leading to a 2.9% gain for the week and a 6.5% rise for 2019, which is its best start since 1987. For [...]
Last Week: December 2018 was one of the worst months in history for the stock market, with the toxic combination of tax-loss selling and momentum trading driving stock prices down relentlessly. So far, the “January effect” in 2019 has been dramatic, as beaten down shares have bounced handsomely, recouping about half of the losses from December. There were no narrative-changing developments during the week, as fed policy remains data dependent, trade [...]
Last Week: Alongside the Chicago Bears, the Wall Street bears were major losers this week. It was the best of times, as there was news that moderated the bear market narrative driven by concerns over the economy, fed policy, and the trade war. As for the economy, job-growth surged in December, as nonfarm payrolls increased by 312,000 -- the strongest reading since February. As to fed policy, in a panel interview [...]