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Retrenchment

Thank you Veterans.

And for the rest of us market jocks, what’s the scoop for the week?  Look for retrenchment above SPX 2750.  In fact, look for 2800 this week as markets seek to find footing.

While the 200-day moving average should form some support, futures trading has been eradic over the weekend.   At first, futures showed a higher open.  But things swung to the downside as Europe opened and oil prices pushed higher.

This kind of pricing behavior is not necessarily predictive of anything other than folks repositioning over the weekend.  And since the range for the repositioning was relatively narrow, it may simply be noise.  Given last week’s strong move higher — after a 10% correction for most indexes — and a ‘nearly’ completed election — it looks like the markets are poised to start reclaiming some of their last ground from October.

One of the growing concerns is in the housing market.  Keep an eye on that in the coming months.  While stocks remain attractive relative to everything else, the housing market slow-down may be a sign that this almost-10-year economic expansion is feeling the affects of higher interest rates more than folks may care to admit.

It may sound funny, because mortgage rates in the 5’s are still historically low.  But, compared to mortgage rates in the 3’s, they’re some 30% higher than they used to be.  For folks that have never known higher borrowing costs in their lives (save credit cards), this could be a legitimate point of contention.

As a housing market aside, it’s going to be very interesting to follow what comes out of the massive forest first in California.  Not only has there been loss of life.  There’s been massive loss of property (which may actually be stimulative for the housing market).  There’s been massive strain on infrastructure.  And it’s called to the forefront some of the questionable Federal forest management policy that’s lead to these massive fires.  (Admittedly, this is something personal for me as the Pacific Northwest experiences fires every summer.  However, with only 4 million or so people in Oregon, there are not enough votes to seem to move the needle much in Washington.  But have this happen in California, and now we have your attention.)  Federal changes in forest management could potentially unlock a lot of value in timber.  If this were to happen, the housing markets would need to be reexamined.

Look for some early volatility this week as markets find their footing.  As long as the SPX stays above 1750 or so a recovery trend is still probable.  A close below this level and we’ll have to reconsider whether the Santa Clause rally is really coming to town.

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different
types of investments involve varying degrees of risk, and there can be no assurance
that the future performance of any specific investment, investment strategy, or product
(including the investments and/or investment strategies recommended or undertaken by
BigFoot), or any non-investment related content, made reference to directly or indirectly
in this blog will be profitable, equal any corresponding indicated historical performance
level(s), be suitable for your portfolio or individual situation, or prove successful. Due
to various factors, including changing market conditions and/or applicable laws, the
content may no longer be reflective of current opinions or positions. Moreover, you
should not assume that any discussion or information contained in this blog serves as the
receipt of, or as a substitute for, personalized investment advice from BigFoot. To the
extent that a reader has any questions regarding the applicability of any specific issue
discussed above to his/her individual situation, he/she is encouraged to consult with the
professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified
public accounting firm and no portion of the blog content should be construed as legal
or accounting advice. A copy of the BigFoot’s current written disclosure statement
discussing our advisory services and fees is available for review upon request.

Guess Week

Markets are yet to commit to anything from a technical perspective.  The SPX downtrend may extend toward 2532 (February’s SPX low), or it could rebound toward the 2800 resistance level.  That’s an election for you.  At this point, things are so tight we have little more than a guess to go on.

So for the week, hang on tight.  We could see anything.

Next week, we’ll get back to work.

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different
types of investments involve varying degrees of risk, and there can be no assurance
that the future performance of any specific investment, investment strategy, or product
(including the investments and/or investment strategies recommended or undertaken by
BigFoot), or any non-investment related content, made reference to directly or indirectly
in this blog will be profitable, equal any corresponding indicated historical performance
level(s), be suitable for your portfolio or individual situation, or prove successful. Due
to various factors, including changing market conditions and/or applicable laws, the
content may no longer be reflective of current opinions or positions. Moreover, you
should not assume that any discussion or information contained in this blog serves as the
receipt of, or as a substitute for, personalized investment advice from BigFoot. To the
extent that a reader has any questions regarding the applicability of any specific issue
discussed above to his/her individual situation, he/she is encouraged to consult with the
professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified
public accounting firm and no portion of the blog content should be construed as legal
or accounting advice. A copy of the BigFoot’s current written disclosure statement
discussing our advisory services and fees is available for review upon request.

Correction Territory

Last week the SPX officially crossed into correction territory.  For those of you unclear what that means, it was a full 10% drop from the high-water mark set at the beginning of October.  This also send the major indexes into negative territory for their year-to-date return figures.  So it’s been a rough month.

Is there an end in sight?  Maybe.  But it’s always tricky catching a falling knife.

Currently, futures are pointing to a higher open this week.  But frankly, there’s little reason for markets to move significantly higher at this point given this week is election week.  Now next week on the other hand?

At this point there are no well defined support or resistance numbers, as the markets do not seem to be playing by technical levels at this point.  A different set of trading algo’s seems to be driving the day – that of underlying moving averages.  And there are lots of individual positions out there we negative moving price averages.

Post-election is an appropriate time to take stock of where we’re at and whether or not there’s much chance to salvage 2018.  For the time being, expect continued volatility.

On the plus side, at least the futures are indicating a higher open for today.  The question is, will this be another dead-cat bounce, or the beginning of a bottom to this market?  We shall see…

IMPORTANT DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results. Different
types of investments involve varying degrees of risk, and there can be no assurance
that the future performance of any specific investment, investment strategy, or product
(including the investments and/or investment strategies recommended or undertaken by
BigFoot), or any non-investment related content, made reference to directly or indirectly
in this blog will be profitable, equal any corresponding indicated historical performance
level(s), be suitable for your portfolio or individual situation, or prove successful. Due
to various factors, including changing market conditions and/or applicable laws, the
content may no longer be reflective of current opinions or positions. Moreover, you
should not assume that any discussion or information contained in this blog serves as the
receipt of, or as a substitute for, personalized investment advice from BigFoot. To the
extent that a reader has any questions regarding the applicability of any specific issue
discussed above to his/her individual situation, he/she is encouraged to consult with the
professional advisor of his/her choosing. BigFoot is neither a law firm nor a certified
public accounting firm and no portion of the blog content should be construed as legal
or accounting advice. A copy of the BigFoot’s current written disclosure statement
discussing our advisory services and fees is available for review upon request.