Last Friday (Sept. 9), the market saw its biggest drop since Brexit and the same psychological pattern happened again: A huge spike in fear. I have said this over and over for the past few years. The market will have pullbacks and shakeouts, but it will not see a SUSTAINED correction if everyone is expecting [...]
One part of my investment philosophy is to gauge investor sentiment. Specifically, I like to use it from a contrarian point of view. In other words, I don't want to be bullish when everyone else is and vice versa. One problem that occurs frequently is there are so many different sentiment surveys that they often [...]
In early July, I mentioned a stock on my blog called Acacia Communications (Symbol: ACIA). I bought it for my clients and the stock has more than doubled since then. I received many emails asking me what I saw in the stock, so here is the anatomy of my trade: 1) (see chart) ACIA came [...]
Jesse Livermore was one of the greatest traders who ever lived. You can read more about him here. He has so many great quotes, but here are a few of my favorites: 1) The stock market is never obvious. It is designed to fool most of the people, most of the time. 2) Play the market [...]
Last Friday afternoon, Reuters ran a story about Jeffrey Gundlach, the chief executive of DoubleLine Capital. He is advising people to "sell everything" because "nothing here looks good." While I have tremendous respect for Mr. Gundlach, I completely disagree with this statement for the following reasons: 1) For a guy who is nicknamed the "Bond [...]
At the beginning of the month, I posted my 2016 Second Half Outlook. I know it is VERY early, but so far the blueprint is working out well: 1) The Brexit decline at the end of June may have been the last shakeout before the market finally breaks out of its two-years range. Many times before big [...]
I keep reading that we are in the 7th year of a Bull Market. I don't buy it! Why? Because we have been in a Bear Market for the past year. Although the S&P 500 didn't correct by the popular "Bear Market definition" of -20%, the majority of stocks got decimated beneath the surface. Energy [...]
In the past two years, the S&P 500 has essentially gone nowhere, frustrating the majority of investors. We have seen three "V bottoms" (shown in the chart below) where the market shoots down about -10% (resulting in losses), only to grind right back up as if nothing happened. Also, beneath the surface, many sectors corrected [...]
The market has bounced nicely the past two days after the Brexit selloff. Now, here's the biggest question on traders' minds: Is this just a normal oversold bounce before the market heads lower? Or was the Brexit selloff just an overreaction and a non-event before we go higher? Of course, no one knows the answer [...]
I always keep an open mind when it comes to the stock market. I look at the positive and negative signs and adjust my client's investment levels accordingly. I was fairly constructive on the market coming into last week, mainly because the price action was very strong. Unfortunately, the Brexit vote caught many people off [...]