Connect with us

Company

This stock market is starting to look like that of a year ago — but it’s still too early to sell

Published

on


All of the major stock-market averages — the S&P 500
SPX,
-0.22%
,
the Dow Jones Industrial Average
DJIA,
-0.22%
,
the Nasdaq-100
NDX,
+0.04%

and the Russell 2000
RUT,
-1.85%

— traded at new all-time intraday highs on Monday and all but the Russell 2000 closed at a new all-time high as well.

In addition, we are in a period of bullish seasonality: the “Santa Claus rally” encompasses the last five trading days of this year and the first two of the next year. With that kind of momentum, we don’t want to fight it. The trend of the charts is still higher.

However, there is some weakening in the indicators, so we want to pay attention to that as well. First, the Santa Claus seasonal period — as defined by Yale Hirsch years ago — is normally bullish for the market. However, if it should turn out that the market declines over that seven-trading-day period, then usually January is a bad month.

The last times that the Santa Claus period ended with a decline were in early January of 2016, 2015, 2008, 2005, and 2000. All led to sharp declines in January, and two of them — 2000 and 2008 — were the beginning of severe bear markets.

For now, though, the S&P is moving higher. There is tentative support at the prior December highs around 3,720, and then there is strong support in the 3,630–3,650 area. That area has been a daily low for seven trading days so far this month. Hence, it is important support, for every time it is tested and holds, more and more people will rely upon it. If it is broken, there will probably be instant selling.

However, we are still viewing 3,550 as the more important support area, for if that were broken, then the S&P chart would take on a bearish aura.

Equity-only put-call ratios have begun to turn upward, and that is a sell signal. However, it is coming from such a low (overbought) position on the put-call ratio chart that it could merely be a reversion to the mean sort of move and not a strong sell signal — yet. It certainly will eventually be a strong sell signal, but we would want to see some confirmation via a price breakdown in the S&P before acting on this potential sell signal. There are so many analysts who seem to be aware of this overbought condition in the put-call ratios (just read an issue of Barron’s) that one thinks the massive call buying might continue for longer than expected — just to confound those who are already shorting the market based on this extreme amount of call buying. We will wait for confirmation.

Market breadth has begun to slip. This was the strongest indicator for the market’s most recent rise since the election. However, on Dec. 22, the breadth oscillators rolled over to sell signals. Those were quickly stopped out by an improvement in breadth on Dec. 23, but the warning shot has been fired.

These breadth oscillators have been very reliable indicators over the past few months, so — even at the risk of some whipsaw losses — we will be following their lead.

In “stocks only” terms, Cumulative breadth and cumulative volume breadth (CVB) have not made new all-time highs since Dec. 17, but that is too short of a time for them to be considered negatively divergent — yet.

New highs continue to dominate new lows in a spectacular fashion. This indicator remains bullish.

Volatility, while remaining high, has recently issued a new buy signal. On Dec, 21, S&P futures fell about 70 points in overnight trading on news that the coronavirus had developed a new strain, and the U.K. was imposing new restrictions. VIX
VIX,
+6.36%

spiked up nearly 10 points on that news — a seeming overreaction. As the day wore on, stock prices recovered and VIX began to fall. By the end of that day, VIX had generated a new “spike peak” buy signal.

That buy signal will remain in place for 22 trading days (until late January) or unless it is stopped out by VIX once again entering “spiking mode.” Coincidentally, the nearly 10-point rally in VIX on Dec. 21 took it almost exactly to its now-declining 200-day moving average.

Historical volatility has continued to drop, even while implied volatility has not. The S&P’s 20-day historical volatility is now down to 9%. A move below 8% would be an extreme overbought condition and would be the precursor to another sell signal.

The construct of volatility derivatives has remained bullish, too. The front end of the VIX futures term structure remains bullish in that January VIX futures (now the front month) are trading at lower prices than the February VIX futures. If that should invert, it would be an immediate sell signal.

In summary, the market seems to be setting up in a very similar fashion to year-end 2017 and year-end 2019. The euphoria of those periods eventually unleashed a nasty market decline in the following February.

It appears that the market can’t help itself and is likely headed for a similar result.

However, the momentum is still strong to the upside, so remain long and tighten stops, while rolling calls up to higher strikes if appropriate. Eventually, it will be time to short this market, but it’s too soon to do so right now. So we remain bullish, but will certainly trade sell signals when and if they occur.



Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Company

No, you’re not crazy. Yes, CDC mask guidelines are confusing — should you stop wearing a mask in public or not?

Published

on

By


Wear a mask. Don’t wear a mask. Make one. Buy one. Wear it outdoors. Wear it indoors.

Confused? You’re not alone.

So what’s the deal with the CDC’s new guidance? “Anyone who is fully vaccinated can participate in indoor and outdoor activities, large or small, without wearing a mask or physical distancing,” Dr. Rochelle Walensky, the director of the U.S. Centers for Disease Control and Prevention, said on Thursday. “If you are fully vaccinated, you can start doing the things that you had stopped doing because of the pandemic.”

Vaccines have helped to slow the spread of the coronavirus, and this appears to be a natural next step for Americans tired of masking up. “We have all longed for this moment when we can get back to some sense of normalcy,” Walensky said.

We are still far, far away from normal. You can take off your mask “except where required by federal, state, local, tribal, or territorial laws, rules and regulations, including local business and workplace guidance,” the CDC says. You still need a mask on buses and trains, in museums and most stores, possibly at your place of work, but not inside restaurants, except when you’re going to the rest room.

How do you know a maskless person is vaccinated? It’s an honors system. The CDC guidance gives less reason for people to abide by that old American Express slogan: “Don’t leave home without it.” People are leaving home without their masks, even in states that still require everyone — vaccinated or not — to wear them in outdoor public spaces, including on the streets of New York.

Many people are fed up, it seems. Little wonder: The CDC’s announcement took many health professionals by surprise: According to a New York Times survey, 29% of epidemiologists surveyed thought people would be wearing masks in public spaces for at least aanother year, while 26% said they believed people would do so for another year, and 26% said they thought mask wearing would continue in some form from now on.


‘You still need a mask on buses and trains, in museums and most stores, possibly at your place of work, but not inside restaurants, except when you’re going to the rest room.’

The change in CDC mask guidelines comes just over a year since the CDC said everyone should wear masks. In April 2020, the Trump administration and the CDC reversed their policies on face masks, and said all Americans should wear cloth face coverings and not — as officials previously said — just medical workers. Trump cited “recent studies,” while the CDC cited “new evidence.”

Fast-forward to Thursday. “I think it’s a great milestone, a great day. It’s been made possible by the extraordinary success we’ve had in vaccinating so many Americans so quickly,” a maskless President Joe Biden declared in the White House Rose Garden declared, citing the vaccines from Johnson & Johnson
JNJ,
+0.15%

Pfizer-BioNTech
PFE,
-0.20%

and Moderna
MRNA,
+7.68%
.

“It’s going to take a little more time for everyone who wants to get vaccinated to get their shots. So all of us, let’s be patient with one another,” the president said.

Forgive the public for having mask rules fatigue. We’ve been on quite a journey. Studies earlier in the pandemic suggested that adopting the practice of mask wearing, one that was already accepted in many Asian cultures, would have saved tens of thousands of lives. Many Americans were understandably frustrated, but also eager to do anything they could to stop the virus.

‘So what’s the deal with the CDC’s new guidance?’


MarketWatch illustration

Flashback: Dr. Nancy Messonnier, director of the Center for the National Center for Immunization and Respiratory Diseases, said in a briefing on Jan. 30 last year, “The virus is not spreading in the general community. We don’t routinely recommend the use of face masks by the public to prevent respiratory illness. And we certainly are not recommending that at this time for this new virus.”

Three months later, New York Gov. Andrew Cuomo, a Democrat, ordered all New Yorkers to cover their faces in public when they can’t maintain a proper social distance. “You’re walking down the street alone? Great! You’re now at an intersection and there are people at the intersection, and you’re going to be in proximity to other people? Put the mask on.”


‘These are just guidelines from the CDC. It’s up to the states to decide what to do next. New Jersey and New York still maintain their mask guidelines in public spaces.’

The CDC’s latest mask announcement are just guidelines. It’s up to the states to decide what to do next. And that’s a whole other story. New Jersey and New York still maintain their mask guidelines when in public spaces. Gov. Phil Murphy, a Democrat, is examining the guidelines, a spokeswoman for his office said in a statement. Murphy, like many governors, wears a mask in his Twitter profile. Perhaps that tells us all we need to know.

Roughly half of U.S. states have some mask mandate. Alabama, Louisiana, South Carolina, Florida, Mississippi, Nebraska, and Texas, among others, had already removed their statewide mask mandates in public spaces and/or had not instituted one. Florida Gov. Ron DeSantis, a Republican, said Thursday he would grant clemency to gym owners who broke the mask mandate.

Texas Gov. Greg Abbott, a Republican, officially ended his state’s face-mask mandate in March, and allowed businesses to reopen, despite opposition from rival lawmakers and health professionals at the time. Gilberto Hinojosa, chairman of the Texas Democratic Party, described the move as “extraordinarily dangerous” and said it “will kill Texans.”

Cuomo, meanwhile, perhaps still reeling from this time last year when New York was the epicenter of the pandemic in the U.S., was definitive in maintaining current policy. Keep your masks on. “In New York, we have always relied on the facts and the science to guide us throughout the worst of this pandemic and in our successful reopening,” he said in a statement.


‘People take off their masks to make phone calls on the street in states where there is a mandate to wear them in public places, and they take them off while they are sitting outdoors eating.’

Vermont Gov. Phil Scott, a Republican, said his state will follow the CDC guidelines. “Later today, we’ll be updating Vermont’s mask mandate following the CDC’s updated guidance, announced yesterday,” he tweeted Friday. “This will mean those who are fully vaccinated no longer need to wear masks — indoors or outdoors — nor do they need to be concerned with physical distancing.”

In Nevada, Gov. Steve Sisolak, a Democrat, said the state updated its own policies on mask wearing to follow the CDC’s guidelines with immediate effect. Nevada Health Response added: “COVID-19 is still very much a threat in our State and many Nevadans may choose to continue using masks based on their and their families’ personal health concerns. Others should respect this choice.”

That statement, perhaps more than any other, illustrates the tension, fear and frustration not only with state laws and changing guidance, but with each other. People take off their masks to make phone calls on the street in states where there is a mandate to wear them in public places, and they take them off while they are sitting outdoors eating. Most people are doing the best they can.

In California, Gov. Gavin Newsom, a Democrat, said people should still wear masks in public spaces for now, but likely not after June 15 when the state fully reopens. “Only in those massively large settings where people around the world, not just around the country, are convening and where people are mixing in real dense spaces,” Newsom told KTTV.

“Otherwise we’ll make guidance, recommendations, but no mandates and no restrictions in businesses large and small.” Is that all crystal clear? I’ll leave that for you to decide.





Source link

Continue Reading

Company

My friends raised $15,000 on GoFundMe while I was comatose after an accident. But I inherited $1 million, and my insurance covered the costs

Published

on

By


Dear Quentin,

Last month, I was in a terrible accident. Most of the expenses are covered by insurance and a couple months before that, I received almost $1 million from a relative. I had not told anyone about my good fortune nor made any purchases (yet!) that would indicate a change of status. While I was in the ICU and comatose, a friend started a GoFundMe for me.

By the time I found out about it, it was up to $15,000 and over 300 friends, even strangers, had contributed. Several friends gave hundreds of dollars. I asked several more knowledgeable friends about somehow canceling it, and they discouraged that action. Too late! Now not only am I racked with guilt, but I am afraid to make improvements on my house.

I make donations to every GoFundMe that I come across, and I made donations to my favorite causes, but meanwhile there is THAT money. I did one “status update” on Facebook, thanking everyone and mentioning my ego “accepting” help. I am afraid to even look at the total, and have not gone to the site. To make it worse, before this, I was lower-middle-class, and so are many of the friends who gave money.

I am sick at the thought of their sacrifice. I will buy them lunch and drinks when I am on my feet, but what else can I do? I can’t even enjoy the money I received before the accident for fear of upsetting someone.

Ask Before Funding Me

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Dear Funding,

You are still recovering from your accident, and no doubt traumatized by that ordeal. The last thing you need is this hanging over your head. It may have become a proxy for all of the emotional turmoil you endured during and after your accident.

That said, I suggest you rip off the Band-Aid and take action. Tell your friends that you appreciate what they did for you, but your insurance covered most of the costs, and you have an inheritance and more money than you need to get through this.

GoFundMe can also return the money to your friends. You can post another status update to say the gesture meant more than any monetary value, but the insurance has come through, and you have been very fortunate. GoFundMe makes it easy to refund donors.

And, yes, I take your point. Setting up a GoFundMe without the knowledge or permission of a friend or neighbor or coworker is a risky prospect, and should be avoided in most, if not all, instances. In this case, you were in the ICU and sedated, so they can be forgiven for that.

Godspeed with the rest of your recovery.

The Moneyist: My friend set up a GoFundMe to pay for her sick pet, instead of getting a refund on our vacation. I canceled the trip. Who’s right?

Hello there, MarketWatchers. Check out the Moneyist private Facebook
FB,
+0.90%

 group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.





Source link

Continue Reading

Company

My friend of 30 years owes me $20,000 after living in my apartment rent-free. She texted on my birthday to say she misses our friendship

Published

on

By


Dear Quentin,

One of my oldest friends of 30 years rented an apartment from me for 8 years. She stopped paying rent during the last year when she started her own business. She kept saying she would pay me back, but by the time she moved out 3 years ago, she owed me more $20,000 in back rent and stopped taking my calls when I tried to collect it.

Out of the blue she texted me on my birthday last week, and said she missed me, and would like to be friends again. However, her texts mentioned nothing about paying me back. I have already made peace with the lost money, and lost friendship, but I’ll bring up the back rent if we do speak again, which will probably be the end of that.

So what should I do? What should I say?

Bad Blood

You can email The Moneyist with any financial and ethical questions related to coronavirus at qfottrell@marketwatch.com, and follow Quentin Fottrell on Twitter.

Dear Bad Blood,

“…and I miss my $20,000.”

If your friendship is that important to your friend, she should have led with her amends. The price of that is $20,000. The most interesting, if not surprising, thing about her text message is that it focused on how she feels, and her needs. It does not address the harm she has done to your friendship — possibly irrevocably.

U.S. states have a dollar limit on small-claims court cases. Unless you live in Delaware, Texas or Tennessee, it seems that your dispute with this friend exceeds that amount in other states. But that also speaks to the amount of money she pocketed. It’s a lot of money, and it should not be brushed off so lightly. Think again about taking legal action.

Enough texting. Meet her face to face. Tell her that you had to pay the mortgage while she lived there rent-free, and remind her that she is not the only person with financial responsibilities, and that she abdicated her duty to you as a tenant and as a friend to pursue her needs. She used your friendship as leverage to scam free rent.

She cannot repair the friendship until she has repaid the debt.

The Moneyist: My boyfriend talked me into depositing my paychecks into his bank account, and paying for a car in his name. What can I do?

Hello there, MarketWatchers. Check out the Moneyist private Facebook
FB,
+0.98%

 group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

By emailing your questions, you agree to having them published anonymously on MarketWatch. By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.





Source link

Continue Reading

Trending