Market Timing 07 (Nov 22 - Dec 25)

[winston]

Sell in June?

by Jeff Clark

In its most recent survey, released yesterday, the American Association of Individual Investors (AAII) reported that the percentage of respondents expecting the market to rally over the next six months shot all the way up to 45%.

That’s the highest level in a year, and a sharp increase from the previous week’s reading of 29%.

Meanwhile, the percentage of respondents leaning bearish for the next six months dropped to 24%.

That’s the lowest number of bears in a year, and a steep decline from the previous reading of 37%.

And, the Volatility Index (VIX) just generated a broad stock market sell signal.

Folks… this is NOT the time to be committing new money to the stock market.

And, for aggressive traders, maybe consider adding some short exposure.

It looks to me like the bear is gearing up to take another swipe at stock prices.

Stocks are likely to be lower a few weeks from now than where they are today.

Source: Jeff Clark Trader

https://dailytradealert.com/2023/06/10/sell-in-june/

[winston]

'We Have A Storm Coming': — Here Are 3 Defensive Moves He Likes Now

by Jing Pan

“The probability of a recession is much higher in mid-2023 than it was in 1994”.

Now that the borrowing limit has been increased, the government will issue new Treasury securities to finance its operations.

Buy equal-weight S&P 500, which gives each company in the index an equal weight. This means the performance of each individual company has the same influence on the overall index value. Invesco S&P 500 Equal Weight ETF (NYSEARCA: RSP).

Selling cap weight: The standard S&P 500 Index is market cap weighted, so larger companies with higher market capitalizations have a greater impact on the index’s performance. Knapp suggests selling this index.

Reduce tech exposure

Source: Benzinga

https://finance.yahoo.com/news/storm-co ... 42635.html

[winston]

We Want to Own Stocks Right Now

by Brett Eversole

Nasdaq 100 Index took the worst beating in 2022. It dropped a crushing 33%.

The index is up 34% this year. That’s nearly triple the gain of the S&P 500 Index.

It’s easy to look at the boom in the Nasdaq 100 and assume you’ve missed it – or that it’s a false rally after a punishing year, with more pain on the way. But history disagrees.

Instead, the recent setup tells us that the bear market is likely done for good… that more gains are on the way… and that we want to own stocks right now.

Source: DailyWealth.com

https://dailytradealert.com/2023/06/14/ ... right-now/

[winston]

Don’t Be Left Holding the Bag When S&P 500 Tops Out

By Avi GilburtStock

For those that have a sense of market sentiment and market history, you would know that when Barron's comes out with such a bullish cover, it often marks a topping in the market, as it displays the generally bullish sentiment of the general market.

For those that have a sense of market sentiment and market history, you would know that when Barron's comes out with such a bullish cover, it often marks a topping in the market, as it displays the generally bullish sentiment of the general market.

As the market seems to be turning quite bullish, I am starting to turn quite cautious.

The market still has more room for the upside, but I think it is time for everyone to be tightening their risk management. Once this rally completes, I am expecting a sizable drop in the market.

Source: investing.com

https://www.investing.com/analysis/dont ... s_headline

[winston]

JPMorgan says stocks to suffer US$150b rebalancing sales

By Denitsa Tsekova

JPMorgan Chase & Co projects real-money portfolios, including those of sovereign wealth and pension funds, will tilt back in favour of bonds to meet allocation targets, in the largest rebalancing flows to the asset class since the fourth quarter of 2021.

The periodic rejigging could knock off as much as 5% from the price of global stocks,

Source: Bloomberg

https://theedgemalaysia.com/node/671412

[winston]

A $4.2 Trillion Options Event Looms for Newly Minted Bull Market

by Lu Wang

An unusually big pile of options expires Friday.

About $4.2 trillion of contracts tied to stocks and indexes are scheduled to mature. That’s 20% more than a year ago.

It also happens to coincide with the quarterly expiration of index futures and the rebalancing of benchmark indexes including the S&P 500.

Source: Bloomberg

https://finance.yahoo.com/news/4-2-tril ... 32259.html

[winston]

Interest Rate Hikes Are Only Half the Story

by Adam Galas

Since WWII, there hasn’t been a single recession in which earnings didn’t fall. Even when inflation was sky-high, earnings still declined in recessions.

Goldman Sachs is forecasting an 11% recession-fueled market decline this year.

Piper Sandler thinks earnings will fall 15%, Bank of America thinks 16%, and Morgan Stanley thinks it will be a 20% drop. The Fed’s own bank lending data is currently consistent with -13% earnings growth.

The bottom line is this: The Fed’s actions are leading us into a recession… But the market is not paying attention at all.

And that’s not all. Corporate profits are almost certain to miss expectations by 10% to 20%.

All told, that means the S&P is likely to hit a new bottom of 3,000 to 3,400 – a 20% to 35% drop from here.

In other words, the S&P is extremely overvalued, and almost all the risk is to the downside.

And if a recession hits, it’ll be average investors who piled into this frenzy that will end up getting burned.

Source: Wide Moat Research

https://dailytradealert.com/2023/06/16/ ... the-story/

[winston]

S&P 500 Above 4,400 Leaves No Room for More Gains, Citigroup Says

Bank initiates 2024 mid-year target of 4,400 on US stock index

Firm admits it missed AI euphoria, but still wary of recession

By Alexandra Semenova

Source: Bloomberg

https://www.bloomberg.com/news/articles ... #xj4y7vzkg

[winston]

US profit recession will persist, says Morgan Stanley’s Mike Wilson

Reiterated his year-end target of 3,900 on the S&P 500 Index, warning that a profit recession is still underway.

“It’s going to get worse before it improves next year”.

Meanwhile, Goldman Sachs Group Inc’s David Kostin raised his year-end forecast for the S&P 500 to 4,500.

Source: Bloomberg

https://www.thestar.com.my/business/bus ... ike-wilson

[winston]

What the Fed’s Latest Announcement Means for Traders

by Imre Gams

The S&P 500 is trading at levels it hasn’t seen since April 2022.

And with the VIX trading where it was right before the Coronavirus Crash of 2020, the conditions are certainly there for a disappointing surprise that sends the market lower.

All this tells me is that we’re still in a trader’s market.

As the market is now reaching bullish extremes, it’s time to be on high alert for mean reversion opportunities as well as exit points on those breakout trades. It’s all about adapting to the market that’s in front of you right now.

Source: Jeff Clark Trader

https://dailytradealert.com/2023/06/20/ ... r-traders/