Simply put, there is no support or interest in buying oil at this time, and that means oil prices could realistically hit $40.00 a barrel. Oil prices that low could cripple the global economy. Let me explain... The Decline in Oil Prices When the West Texas Intermediate (WTI)…
The Shanghai Composite Index (SCI) has been rallying and is up 9.3% this year as of Thursday, which is ahead of the Dow Jones Industrial and just below the S&P 500. However, playing the Chinese capital markets involves excessive political and economic risk. The country is also stalling,…
The fact that consumer spending has not tanked in spite of unemployment being at over nine percent and expected to stay around this level through 2012, and continued weakness in housing is encouraging. When consumers are cautious, they tend to hold back on any major purchases, such as…
We have a likely debt default in Greece, pegged at a whopping 98%. Ireland and Portugal continue to struggle with muted growth and massive debt. Spain may be needing help. Bond yields are rapidly increasing in Europe in line with the risk levels. You can get a whopping…
I must admit the fact that consumers continue to spend despite any strong or sustained job growth and continued weakness in housing is encouraging. With consumer spending accounting for two-thirds of GDP, retail sales will eventually be stronger when the jobs and housing areas improve, albeit it will…
The overall stock market bias continues to be bearish. The selling capitulation remains in effect. Just take a look at what happened on Wednesday: DOW down over 500 points S&P 500 down over 100 points NASDAQ down over 50 points The fact that we have yet to see…
This is not a market for the risk-adverse. Watching the key stock indices plummet over 10% in less than a week is scary and nerve-wracking. But the world is not ending. That I can say. My best investment advice at this time is to remain calm, but at…
— reporting from Modena, Italy I’m in Modena today, home of the iconic “Ferrari” brand. My mind is wandering quickly…thinking about Europe and America. Invariably, I wander off to government austerity measures. I apologize in advance to my readers if I have been talking too much about this…
Consumer spending drives the economy and gross domestic product (GDP) growth, accounting for about 70% of GDP in the U.S. The retail sector has been rebounding in spite of the lack of jobs and the declining home prices. The S&P Retail Index (RLX) is trading near its 52-week…
On July 19 and 21, the key stock indices surged towards their respective multi-year highs. The key stock indices have shown some resilience after battling back from being down nearly 10% this year to the point where the S&P 500 is less than two percent from its multi-year…
Since the financial crisis, the global equity markets have shown a solid turnaround before witnessing some sort of risk aversion during 2011, as the European problems continued to worsen. Asian equities have been the worst-performing markets year to date, whileU.S.markets ranked amongst the top performers. The year also…
During the technology euphoria in late 1999 and early 2000, I recall that a friend of mine had taken out a massive loan against the value of his home and bet on several high-risk micro-cap stocks. I remember his position surging from $100,000 to nearly two million dollars…
The current market bias is positive, but there’s some concern about the chart. The S&P 500 breached its 50-day moving average (MA) on Monday before rallying, but has failed to mount any sustainable rebound, currently stuck around its 50-day MA. My concern is that failure to edge higher…
Stocks are in rally mode, with the key stock indices battling back to above their respective 50-day moving averages. There is some euphoria surfacing, but I believe it is somewhat overdone. My investment advice is that, before you get too ambitious and chase stocks higher, you need to…
We are at the mid-point of the year. The year started with a bang, but reversed course in May and early June, with stocks trending down on rising global risk. At the mid-year, the key indices are up between four and seven percent in the first half, with…
So far, even without strong job growth and with continued weakness in housing, consumers continue to spend, which is helping to drive the economic renewal, albeit sluggishly. This is positive and clearly encouraging once the jobs and housing areas improve. The Fed realizes this. The headline Retail Sales…
China was the party capital of investment growth in 2009; but in 2010 and so far in 2011, it’s turning out to be quite the opposite as far as performance goes. In 2010, the Shanghai Composite Index (SCI) fell 14.31%. In 2011, the SCI had been up over…
A month ago, I expressed my concerns with the S&P chart and thought stocks were set for additional weakness. My investment advice was to be careful and not to chase stocks. Even after the one-day surge last Tuesday, I thought it was largely due to an extreme oversold…
Stocks surged on June 14 after the release of the May Retail Sales reading. The buying on the news would make you think it was a strong reading; but, in reality, the headline number fell 0.2% in May. Investors apparently were excited that it was not as bad…
The six-day losing streak finally came to an end on Thursday, but I sense that the buying was likely more to do with oversold buying than a change in market sentiment. The charts continue to show fragility and exhaustion, with the near-term view being bearish on weak Relative…
