My Thoughts on Wednesday’s Fed Meeting
The Fed is NOT going to raise rates anytime soon. In their statement on Wednesday, I feel their language will remain dovish. Here are my reasons: 1) There is no question that some parts of the economy have improved over the past 5 years, but there are other parts that are still fragile (specifically wage growth, housing, and the retail sector). The last thing the Fed wants to do is raise interest rates too soon [...]
Crazy Prediction
1) During the 2008 financial crisis, the Federal Reserve stepped in to provide liquidity and took measures to possibly prevent the US from experiencing its worst depression since the 1930s. Whether we agree with what they did is not the point. In their view, the Fed did what they had to do to keep the banking system from collapsing and to help the economy get back on its feet again. 2) Now, in 2014, many [...]
2 Stocks That Could Be Higher By Year-End
Readers of my blog know that I have liked Netflix $NFLX for a long time. I continue to feel it will move higher over the next 6-12 months for the following reasons: 1) Fundamentals - The company has posted triple-digit earnings growth for the past 6 quarters. Their revenues have accelerated to a 25% growth rate and their margins continue to expand. Their subscriber growth still has huge potential, especially when they enter countries such [...]
Sentiment Turns Negative…Again!
For the past 2-3 years, a similar pattern has repeated itself in the financial markets. The major indexes start to break down towards their 50-day moving averages, the overall market starts to weaken (usually sparked by a geopolitical event), and then sentiment turns EXTREMELY BEARISH in a short period of time. It happened again over the past 2 weeks. Here are 3 examples: 1) The CNN Fear/Greed Index (measured from 0-100) moved from 95 to [...]
Reviewing Market Positives and Negatives
It’s important to keep an open mind when evaluating the stock market. It doesn’t make sense to always be Bullish or Bearish because the market is not always in an uptrend or a downtrend. It's simply best to do your homework, look objectively at both the positive and negative signs, and invest accordingly. That being said, let’s review the market’s recent action. NEGATIVE SIGNS: 1) All the major averages are below their 50-day moving averages [...]
A Great Time To Be Patriotic
I was very pleased to see the stock market make new highs today, but I still can't believe the misery I keep hearing. Instead of finding people encouraged by this rally, this seems to be the most depressing celebration of new highs I have ever seen in my 18 years of trading. I have a bunch of thoughts, so I'll just rattle them off: 1) For the first time in history, the majority of Americans [...]