Rounded Bottoms For Many Stocks and Sectors There is increasing evidence that the sharp and short BEAR MARKET of 2018 ended on Christmas Eve. Until recently, the rally had the hallmarks of a typical BEAR MARKET rally: excruciating volatility, illiquidity, and poor volume. For more on the characteristics of BEAR Market rallies: “Characteristics of […]
Post-Christmas Rally Stalling The stock market has been on a tear since Christmas. In the last 19 trading days, the Dow Jones Industrials (Dow) have gained 2800 points or nearly 13%. Other key indexes have generated equally impressive gains: Nasdaq 100 (+13.5%), Russell 2000 (+15%) and S & P 500 (+12.5%). The belief that a […]
Volatility And Liquidity Since the Bull Market peak last fall, volatility has gone through the roof. “Volatility” is how market traders describe and measure the variation in prices or returns. Higher volatility is a direct reflection of greater investor uncertainty AND less liquidity. Volatility determines investor perception of risk. “Liquidity” is related to volatility, but […]
The 3 Minute Ramp In the final 3 minutes of trading for 2018, the Dow Jones Industrials (Dow) gained an amazing 177 points (0.76%). The chart of the Dow on the left is for the period between 11:45 am EST and 4:00 pm EST on Monday. Each bar represents ONE minute. The stock market’s fireworks […]
Asset Re-Balancing To the Rescue? Asset allocation is nothing fancy. Certain investors, especially Pension Funds, routinely target a specific stock-to-bond ratio for their portfolios, for example 60/40. Since stocks and bonds will have different returns, the portfolio is brought back to its target ratio at the end of each quarter. If the equity portion of […]
Characteristics of Bear Market Rallies We started to cover the topic of “Bear Market Rallies” in Mondays’s piece, “Mr. Market’s Bear Market Rallies” (https://markonomics101.com/2018/10/14/mr-markets-bear-market-rallies/). Their behavior differs so much from the type of trading in Bull Markets, that they have their own signature. This is quite valuable because of its informational content, but also provides […]
