stock market

Stock Market: Lots Of Outflows. Need A Washout.

Money’s flowing out of the stock market (NYSEARCA:SPY).

Almost $50B exited equity markets in the last few weeks according to Lipper.

Tech’s been a leader. So when you have negative announcements and negative reactions this could feed on itself.

Tech’s been the support for markets helping it move higher, leading it higher. When that turns investors need to turn somewhere.

What’s interesting is the outflows predicted the negative reactions.  Or, because of the outflows the market didn’t have the buying support to scoop up down stocks. We think it’s the latter.

While the market acted like a champ through all the tweets and tariff calls, outflows could be signaling a lack of support.

We’d like a washout, frankly to make it a little easier to pick up great stories on the cheap.

Looking For Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

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All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Stock Market: Siegel Says Second Half Risk

Wharton Professor Jeremy Siegel, no relation to Elazar Advisor’s Chaim Siegel (that we know of) said today that the second half stock market has some risks.

By the way we think that he’s generally been spot on.

2019 S&P 500 Estimates Too High

Siegel pointed out in a Bloomberg interview that S&P 500 estimates are too high for 2019. 2018 earnings benefited from the one-time tax cut benefits that won’t see the same lift to 2019 earnings.

Siegel said “guidance is going to be a little more challenging” as we report Q3 numbers and companies start to give their 2019 outlook. We’re not there yet but it’s coming.

That in combination with more Fed rate hikes, Siegel says, can “keep a lid on prices” for the stock market in the second half.

Trade War 10% Pop?

He did say that “earnings are blow out” and that if we get trade war resolution you’ll get a “pop 10%” in stocks.

Earnings Starting To Report: Watching Reactions

We’re still very bullish on earnings for tech stocks which are starting to report. We’re also paying attention to how stocks react to earnings reports. Reactions have been mixed.

We want to see if great reports are turning into a sell the news as managers sell protecting gains ahead of trade war risk.

Hitting Tech Stock Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

We’re about to hit our prime time, earnings season.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Stock Market Holding Up Like A Champ

The stock market is up slightly as we write this despite trade war concerns and a US brush with Iran.

What’s going on?

When you’d expect down and get up that’s called “bad news good action.” It’s a trading signal that bodes well for the stock market.

This market has weathered a lot.

For the S&P 500 ETF (NYSEARCA:SPY) 280 looks like a critical support-resistance level. A decisive close above or below is a key hint to follow through in that direction.

The way the market is swallowing up all negative news and holding up anyway looks very bullish. That’s what a bull is. It licks up everything in its path. That’s why they call the stock market a bull. Not much can stop it.

Earnings Likely The Driver

We are hardly in earnings season but we’d guess that strong earnings reports to come and strong guides are what investors are holding on for despite the negative macro news.

We’re bullish on our coverage and think tech earnings reports, many of which are soon to report can support this market.

Earnings start in earnest tonight and this week.

Hitting Tech Stock Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

We’re about to hit our prime time, earnings season.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Second White House Stock Market Warning This Month

second warning from white house on stock market

The White House has now made two clear stock market warnings in July. President Trump hinted to CNBC that he has wiggle room with stock market gains to take on trade war risk.

It was the beginning of the month that US Commerce Secretary Wilbur Ross made similar warnings.

Trump told CNBC late last week, “This is the time, this is the time, you know the expression we’re playing with the banks money.”

Trump knows casinos and being up on the “house’s money.” He expressed that the stock market being up a lot since his election win affords him some room to take on some trade war risk.

That should be taken as a clear warning of more market risking tweets and decisions coming in the future.

Wilbur Ross said earlier this month the stock market will have some “hickups” thanks to trade and that the “level of the stock market” is not going to affect their trade policy. Trump’s calls last week echo Ross’s warnings.

Sure enough Trump tweeted on Friday that China and the EU are manipulating their currencies. China has been letting their currency drop which has led to global market risk and currency contagion risk in the past.

So far the stock market has taken the warnings in stride but we’re keeping a close eye. For now earnings are what appears to be supporting stock markets. We are bullish on earnings.

Hitting Tech Stock Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

We’re about to hit our prime time, earnings season.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Kudlow Said 4% GDP Or Did He Hint To 5%

Larry Kudlow, President Trump’s top economic advisor said a lot today. It all appeared very bullish. There could be more tax cuts, he hinted to China melting, and he hinted to 5% GDP? Did I hear that right? He also compared now to the ’90s. Very bullish.

In his Jim Cramer interview, Larrow Kudlow said about GDP, “It may be four for a quarter or to two. It may be plus.”

Did I hear that right? Plus? Does that mean Four-plus or something higher than four, like five? Not sure but it’s sure not bearish.

He also said they are designing economic policy to drive an 1980s-1990s-style multi-year period of prosperity.

CNBC also quoted him as saying about China, “They know they’re wrong.”  I expect some agreement at some point.

All bullish.

Hitting Tech Stock Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

We’re about to hit our prime time, earnings season.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Yield Curve Looks Very Bullish For Stock Market

yield curve bullish for stock market
Source

Are you worried about the stock market because of the yield curve? Don’t.

Before the yield curve inverts (which means the two-year yield would be higher than the ten year yield) it has to approach zero.

That approach to zero as you see in the chart here is amazing for the stock market.

The blue line represents the yield curve. The red line is the stock market. Just about every time the yield curve shrinks to zero the stock market rips higher.

Low rates act as the denominator to value future cash flows. As that denominator shrinks the present value of future cash flows races higher. Also a low yield alternative encourages investment. Bitcoin wishes it had this setup.

So before you worry about the yield curve there’s reason to be very bullish about the yield curve’s impact on the stock market.

Hitting Tech Stock Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

We’re about to hit our prime time, earnings season.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Earnings Led Stock Market Breakout This Week?

S&P 500 SPY ETF
Source

The stock market (NYSEARCA:SPY) is approaching a key level at 280. A close above it would be a breakout signaling the market can move higher.

So far the stock market has looked through trade concerns and Fed rate hikes and we’re about to enter earnings season.

Now that we’re moving into earnings season the fundamentals should matter more than the macro.

Earnings matter for stocks. Starting this week earnings reports and guidance are the stock market’s next cue.

Bullish For Tech Stocks For Q2

We’re bullish about tech stocks for Q2 and, maybe more importantly Q3 guidance.  If correct that may have been the reason for the stock market’s strength despite negative “macro” news.

So far our work says that Q3 business has not been affected yet by trade concerns. If that shows through in strong guidance we should continue to higher highs for the stock market.

Hitting Tech Stock Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

We’re about to hit our prime time, earnings season.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Stock Market: Will US-China Trade Talks Resume?

The stock market has been hit on negative trade news days but bounces with a lack of news. Any positive developments could break this market out.

Bloomberg reported that both US and China officials are considering returning to negotiations. A top trade official from China said, “when we have a trade problem we should talk about it.”

China’s economy is probably more at risk to a trade war, their stock market is likely more volatile and President Xi Jinping has more to lose having risen to power thanks to a strong economy.

While President Trump wants to balance trade he also has his sights set on big goals like fixing the problem of China taking technological intellectual property.

With approval ratings moving up President Trump’s voter base probably gives him support to be aggressive. He won votes due in-part to his plans to win back American jobs from China. Trump feels empowered and probably knows China needs to negotiate.

Some advisors in China have recently said China needs to make some concessions. Our guess is something like that doesn’t slip out said within China unless given approval.

The winds are changing potentially where Trump’s momentum of voter support, tax wins, regulatory wins, and North Korea wins drives him to bring China to the table.

Any concessions and agreements would likely be a shock to markets taking us closer to new highs and beyond.

Hitting Tech Stock Earnings Home Runs

We spoke to the top tech companies over the last few months to identify what tech stocks have home run earnings potential. Earnings are what drives stocks, especially tech stocks. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

We’re about to hit our prime time, earnings season.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We have no holdings in the stocks mentioned unless otherwise noted.

Stock Market’s Next Move

The stock market has been on a roller-coaster ride the last two weeks but has shown some support. We still see a downtrend but we’re going to let the market tell us what it wants to do next and we’ll tell you what we’re watching.

The S&P 500 ETF SPY (NYSEARCA:SPY) closed yesterday just below June 25th’s open when we turned cautious. That’s when trade war news intensified.  Since then China’s vowed to strike second, not first.

Trade War Summer Vacation?

Looking at the sequence of potential events, striking second could give the market a break from trade concerns for a few months.

This is what The Wall Street Journal said,

“Mr. Trump’s threat to levy tariffs on another $200 billion also won’t be ready to put into effect until the late fall because the U.S. has to clear a number of procedural requirements.”

That can act as good news especially since China said they will not strike first. If China has to wait for the fall for the next round of tariffs this trade war escalation could go on vaca.

So as China answers the current US tariffs, The US will not yet be able to implement the next round until the fall. That would mean that the tariff part of this story could take a break which could be good for markets.

S&P 500 SPY ETF Chart 

SPY ETF Chart levels
Source

We want to watch the stock market to see what it wants to do. For now we think we are still in a downtrend and so don’t want to say the market is turning up until we see it actually turn up.  We also see big resistance overhead as we drew in the chart.

Fundamentally a great case can be made that stocks should go down based on the trade war but so far the stock market is holding up very well.

We don’t want to think we can outsmart the market but rather want to try to understand where it’s going.

Market Action: Putting It All Together

When looking at markets you want to integrate what the market’s saying it wants to do with the news that it’s fed. The fundamentals are one thing but how the market responds to those fundamentals is ultimately what matters. Fundamentals alone don’t drive stock prices. Market participants reaction to those fundamentals drive stock prices.

For example, if shorts don’t see the market go down they’d need to cover which can cause the market to go up on bad news. If it happens that would be a bullish sign of bad news-good action. That would be a case that despite bad news the market couldn’t go down which could cause buying follow through.

For earnings events, the fundamentals are the over-riding driver to stock moves that day which is why we speak to so many tech companies to try and understand an individual company’s most important driver, earnings.

But for markets there are so many influencing factors and investors positioning. We want to understand what the sum total of all of those decisions are saying by watching the trend and reaction to the news.

By watching what the trend is and how the market consumes all that fundamental data you start to see what the market wants to do.

When you get bad news like a trade war and the market doesn’t want to go down, in essence it may be telling you it wants to go the other way, higher.

We’re not there yet. We still see those downtrends and that overhead resistance. But we want to always respect markets and the next few days are critical to see what the market wants to do.

Hitting Tech Stock Earnings Home Runs

Above we talked about our top down view. If you’d like to know about our bottoms-up work we have a free trial. We spoke to the top 60-70 tech companies over the last few months to identify what tech stocks have home run earnings stories. Finding those few tech stocks that have realistic earnings trajectories way above the Street can give you conviction to see a stock through to big upside. Dip your toe in the water with a free trial.

START FREE TRIAL

Read Reviews

All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless. We have no holdings in the stocks mentioned unless otherwise noted.

Trade Threat Peak This Week? Bullish

The initial $50B of tariffs that the US issued on Chinese goods was quickly answered by China with their own set of $50B of targeted tariffs.

What’s more interesting however is that the US’ latest threats of an additional $200B of tariffs have so far gone unanswered.

That is meaningful.

Cooler Heads?

President Trump’s negotiating tactics have been far from meeting traditional political protocol. Such a strategy worked to calm North Korea and may have settled China from upping the ante on trade tariffs.

China sits on a debt problem of their own. As tough as China talks they’d prefer to avoid an economic slowdown.

Negative Trade News Peak Behind Us?

We may be in the peak part of the tariff threats. If China can’t answer the $200B threat then hopefully the largest negative news hit is behind us.

Both countries are apparently racing to negotiate a trade accord ahead of month’s end.

So either we have a peak in the negative trade news cycle or the US and China could even come to terms some time in the next week. Both would be bullish for markets that sustained a tough weak following a cross fire of trade threats.

Tech And Trade

We pointed out that thus far tech companies’ goods have been mentioned far less in items listed for tariffs.

We also think we have increasing confirmation we are early in a tech boom. As long as trade tensions don’t escalate to much we think many tech stocks have big upside from here.

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All investments have many risks and can lose principal in the short and long term. The information provided is for information purposes only and can be wrong. By reading this you agree, understand and accept that you take upon yourself all responsibility for all of your investment decisions and to do your own work and hold Elazar Advisors, LLC, and their related parties harmless.

We are long QQQ.