Is Einhorn Right About a Tech Bubble? Here's Some Perspective.

Dec 11, 2020

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01:43 AM PST

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Looks like traders were still on the fence through Thursday's close. Can't say I'm surprised. Not only did the market dole out an oversized 3.5% gain in just six days over the course of late last week and early this week, but there's a HUGE technical ceiling right where most of the major indices seem to be stalling this week. We have to respect that reality, and not become presumptuous here.


We'll look at the details of the dilemma below, as we always do. The first thing I want to do today is talk about David Einhorn's recent call - and letter - suggesting we're in the midst of a tech bubble.

Coal Clears the Hurdle, But This Could Make or Break the Budding Rally

Jul 9, 2020

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01:13 PM PST

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Looks like the bulls just weren't able to go seven for seven. Still, a solid six-day gain for stocks left the market knocking on the door of a major technical ceiling. Better still, past that line are new record highs. So, while this is an exciting time, it's also a tense time just because traders are torn here... the market's hesitant to tiptoe into new-high territory, but traders are also ready to pounce at the first sign of a breakout.


We'll detail the psychological tug-of-war in a moment. Let's first update our real estate trend chart with this morning's new data, which - bluntly - confirmed our worst suspicions.


It's Confirmed - Real Estate is Bogged Down

Worried About Zillow's "Overheated Housing" Theory? Don't Be.

Jul 9, 2020

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01:13 PM PST

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Happy Tuesday, folks. And if you were long or net-bullish on stocks, Tuesday was a pretty good day for you. The market just logged its sixth straight daily gain, and though it feels a little overbought as a result, the more distance we can put between where the indices are now and the hurdles they cleared late last week, the better. In other words, there's a little wiggle room now - if the market stumbles from here, it's a lot less likely to trigger a selling avalanche.


I'll give you the details of that idea in a moment. First we need to get on the soapbox (just for a couple of minutes) in response to something I'm guessing at least a few of you saw today.


Housing Overheated? I Don't Think So.

Q1 Earnings Scoreboard, So Far

Jul 9, 2020

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01:13 PM PST

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That's day five of the rally, but even though the advance was solid (and ended the day stronger than it started it), wise traders will still be skeptical here. We can tell you exactly why in a moment, but first we want to go ahead and deliver the Q1 earnings update we promised last week.


Q1 Earnings Scoreboard

Stocks End Week on a High Note, But They're Hardly Bulletproof Here

Jul 9, 2020

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01:13 PM PST

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Hello folks. As expected, today's (Thursday's) action was on the lethargic side, though we ended up getting the bullishness I was hoping we wouldn't get. Now we're going to come back from the long weekend with stocks a little overbought, and a lot of traders waiting on the sidelines for the proverbial "other guy" to make the first move. Had we pulled back a little bit today, we probably would have come back at the beginning of next with either the bulls taking a convincing hold right off the bat or the bears taking a convincing hold right off the bat. Now all we have is a market on the fence.


Our usual chart of the S&P 500 illustrates all of this. The index put a little more distance between itself and its two key short-term moving average lines, but it was a half-hearted effort. On the other hand, the volume behind today's forward push was not only strong, but it was very high considering this was the last day before a long weekend.

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