cme4pif Market Comment

December 28 2013 – U.S. stocks fell slightly Friday, with the Standard & Poor’s 500 Index trimming a weekly gain, after benchmark indexes rallied to all-time highs Thursday amid optimism over the economic recovery. The S&P 500’s retreat Friday halted a four-day rally that was fueled by improving economic data. A Labor Department report showed that jobless claims declined by more than forecast, boosting optimism. While the weekly jobless claims reading dropped this week, the four-week moving average rose from 343,800 up to 348,000 due to the 369k and 380k readings seen over the prior two weeks.  The current four-week moving average is now 43,000 above the post-recession low of 305,000 seen at the end of September.

The big push higher, though, has left the S&P 500 well above its 50-day moving average.  At more than two standard deviations above its 50-day, the S&P is actually the most overbought it has been since mid-May.  Investors celebrate 2013's big gains with m…

December 21 2013 – What can I say we are enjoying a fantastic Santa Clause Rally. All the charts look like clear sailing and no one has a negative thing to say. In short the markets at least in the USA are on a parabolic buying spree.
U.S. stocks rose, with the Standard & Poor’s 500 Index capping its biggest weekly gain since October, as data showing faster-than-estimated growth boosted confidence in the world’s largest economy.
The Standard & Poor’s/TSX Composite Index (SPTSX) increased 7.40 points, or less than 0.1 percent, to 13,399.60 at 4 p.m. in Toronto. That’s the highest level for the benchmark since Dec. 2 as it capped a gain for the week of 2.1 percent. The index trimmed earlier gains of as much as 0.8 percent in the final half-hour. Trading of stocks in the index was 75 percent higher than the 30-day average. Stronger-than-expected U.S. GDP is a positive for Canada and more so a positive for cyclical stocks like energy, materials and financials Energy and materials…

December 14 2013 – I am in Cancun Mexico and there are lots of folks at the bar talking to me and I am writing my blog, what dedication.  So this will be short. Besides are you really going to get much of an intelligent comment (or good spelling) after my fourth cerveza. Last week I said that a one-day bounce is not a trend and well now you know why, it was only a one day bounce. However expect the market to drop to the lows of the first few day of Nov. S & P 1750 and bounce up for a Christmas rally. The whole thing should dovetail nicely with the up coming Fed meeting, I am expecting no change and the markets will love it. Of course we wait to be sure that bounce happens.

If your trading account allows a buy on stop order, (Bank of Montreal does so most brokers should) you might want to follow the market down with a buy on stop set at three times daily ATR. Then when the turn comes your in. What to buy is still most of the things I mentioned last week.

Everything looks weaker, …

December 7 2013 – Well last week was going nicely according to plan -- gold continued to disintegrate, bond yield marched up to almost 4% and the markets sold off. Then Friday’s reports came out and we had a solid one-day bounce.  Of course a one day bounce is no reason to go back the truck up and load up on equities, we are still overbought here. But if this pattern continues into next week you may need to do some shopping.
For the week overall U.S. stocks ended their longest streak of weekly gains in a decade as data on economic growth and manufacturing stoked concern the Federal Reserve may reduce stimulus soon.
Equities rallied on the final session of the week, halting a five-day slide, as better-than-forecast jobs growth spurred speculation the economy may be strong enough to weather a potential reduction in Fed bond purchases.The 203,000 non-farm payrolls added in November showed an improving trend but in the view of many traders wasn't enough to push the Fed to slow its bo…