What do the indicators say this morning?
CNN Fear and Greed Index crossed into Extreme Fear about 6 a.m. CNBC premarket data shows NASDAQ down 95 points at 6:54 a.m. The Mannarino Risk Indicator is at its high over the last 12 months.
The safe haven selling on Friday has not reversed. Premarket opens in 3 minutes, so I’ll pause for a few. Nothing on the economic calendar Monday, and not much until Thursday. No Fed speakers this week.
My stocks down mostly 1 to 1.5%, but SPG and VFC down just 0.1%. Not much on earnings front today. Tuesday, however, has MSFT, GOOGL, KO, DOW, MMM, GE, VISA and an old friend, TDOC.
I am firmly in the wait-and-see mode. Will NASDQ hold or is this the down draft some of us have been waiting for?
KC
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Quite a few macro gurus i follow seem to think recession is coming here in q4…so a pivotal 2 months.
All the macro/TA guys think we fall a bit further in 4100’s here, then scream to 4400 for a last hurrah, and then the bottom falls out.
I can sort of see that latter scenario, but just skipping the foreplay and going straight into a waterfall would not shock me either.
There are still some who think we hit new highs first. Of course, things always seem to go higher or lower than I think.
If we crash to or below the 2022 lows, without hitting new highs first, then this whole move since late 2022 has been nothing but a giant BMR.
Dreamer
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Main TA guy who was targeting this, claimed the 4190 or whatever we hit today was close enough and thinks it triggered a buy signal. Certainly acted that way since.
So if TA is truly magical and predictive, then I guess we see if this goes to around 4400 (not necessarily today, of course) before dropping off a cliff after that, around 1st/2nd week of Nov.
GLTA, and go PTLO!
Dreamer
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It did not hold, The last 12 sessions, 8 have been down for a net minus 1,000 points. But hardly a rout. Bifurcated market, mega’s versus the cigar stubs in opposite directions each day. Friday was a marginally up day, I was 87% cash, and I still had a noticeable loss. Heck of a stock picker, am I. Or, I am yet to be vindicated.
The Fear/Greed settled into extreme fear territory. Of the indicators, I pay more attention to price momentum, price breadth, and price strength (all at extreme fear). Less important to me are put/call ration and volatility. Safe haven (bond versus stock returns) is of some interest. What stands out to me, though, is Junk Bond Demand. Shows extreme greed, meaning the premium return on junk over treasuries is very small. To me that means that the market considers U.S. treasuries and investment grade to be pretty close to junk status.
I am out of touch on earnings dates. Had a list, somewhere. I guess having only 12% invested, spread over 17 positions does dampen interest. SPG at 2% is my “overweight”.
Enjoy the weekend if you can,
KC
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O.k., so it is not Monday morning. I get the KBRA “3 Things in Credit” pod cast on Fridays. It is, of course, a macro sort of thing, which many feel is best ignored as far as investing decisions are concerned. This podcast is recession oriented. My view, we will have one so let’s get to it. Then, Dreamer and I may find entry points. Recessions haven’t lasted forever, yet.
Enjoy. Be warned, refresher course on SLOOS and Sahm ahead.
KC
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