From the Desk of Kimmy Sokoloff
So, either the $VIX is broken or the market is.
The VIX was down more than 15% over the past few days, whereas the market isn’t really moving.
Expert technical analysis of financial markets by JC Parets
by David
From the Desk of Kimmy Sokoloff
So, either the $VIX is broken or the market is.
The VIX was down more than 15% over the past few days, whereas the market isn’t really moving.
by David
From the Desk of Kimmy Sokoloff
So many names were running higher today, but $SPY just kind of stood still while $QQQ had lift off.
Stock selection is key.
by David
From the Desk of Willie Delwiche
Last week was the first time in 45 weeks that the weekly AAII survey showed more bulls than bears. The most recent stretch of pessimism did not eclipse the Financial Crisis in terms of intensity (the bull-bear spread bottomed last year at -43%, versus -51% in March 2009). But it did set the record for persistence.
Why It Matters: This newfound optimism is leading to some concern that the rally off of last year’s lows has run its course. This is based on the idea sentiment is always best used as a contrarian indicator. Leaning against sentiment tends to be most successful after it has reversed at extremes. The path higher for stocks becomes more clear as bulls replace bears. Rallies that are accompanied by rising optimism tend to be more sustainable. Optimism becomes a headwind after it becomes excessive and begins to fade. While on the watch for excesses, mostly we are seeing investors finally beginning to embrace stock market strength. At this point in the cycle, strength fuels optimism and optimism fuels strength. Increasing optimism after persistent pessimism is a welcome sight.
In this week’s Sentiment Report we take a closer look at how we need bulls to have a bull market and where to look for early signs that optimism could be getting excessive.
by David
This is the video recording of our February 15, 2023, Inside Scoop Weekly Strategy Session.
by David
The most significant insider transaction on today’s Hot List is a Form 4 filing by Coliseum Capital Partners.
The hedge fund reported a purchase of roughly $26 million in Purple Innovation $PRPL, increasing its ownership stake to 51.20%.
by David
From the Desk of Kimmy Sokoloff
We saw a lot of volatility yesterday.
And the indices managed to hang on to their eight-day moving averages.
[Read more…]
by David
From the Desk of Kimmy Sokoloff
The January CPI data came in a bit warmer than expected, and the market went every which way.
We also had a few Fed speakers today, so that added to the volatility.
by David
From the Desk of Willie Delwiche.
The market has been focused on the headline CPI and eager to declare the inflation battle won. The Fed is less concerned with changes that are fueled by outliers and focuses more on the central tendency and underlying trend in inflation. The median CPI in January posted its third largest 1-month change on record and the 12-month change climbed to a new high. So long peak inflation – we hardly knew you.
Why It Matters: With the market focused on the pullback in headline inflation, bond yields pulled back from their recent highs expectations of rate cuts later this year became more widespread. As it has become clear that the Fed is focused on still-persistent underlying inflation, the market has had to play catch-up. Fed funds futures now match the Fed’s expectations that rates will finish this year above 5% and today for the first time in 15 years we have Treasury yields with a 5-handle. While inflation expectations are on the rise and the underlying trend in yields remains higher, we are not seeing signs of macro-related stress. That keeps the path of least resistance for the Fed and bond yields higher.
Inside we take a Deeper Look at what continues to fuel inflation, how the market is getting on the same page as the Fed and what that all means for bonds going forward.