Guillotined as the action in the bomb market indicating the economy is improving we dont need those kinds of stocks anymore the market is constantly trying to predict the future, takes inputs, aggregates them, the consistent growers are out and the cyclicals are in thats right, the companies that can build big numbers when the economy is in shape, theyre back theres just one problem, the random set of inputs and outputs is missing a key ingredient, emotion. If you want to be a successful investor, you need to check your emotions at the door and right now thats not happening. Let me show youwhat i mean why dont you take a stock we all know, merck, then amazeingl it spent two decades lots in the wilderness until they discovered keytruda mostly lung cancer, in trials for many types of tumors, the strength of keytruda breathed new life into merck stock. Now merck has dropped five bucks in two days with the darn thing coming back down to 81 at its hideous lows, it was down nearly 10 from la
Dow, it lost another 56 se7 pois this morning and rebounding like crazy in the afternoon. Same method it fell at the opening. S p falling. Nasdaq surging 3. 7 . How much can you trust this bounce get this, a report from snapple on top of last nights rocket fuel which was a perfect report from semiconductor sky work solution look, i think we cleaned out the bear den when we opened down that fabled 567 dow points i think we wiped out the weakhanded investors. We dealt with mechanical issues that exacerbated the decline even as the tape suddenly got a lot more bullish as we told members, the actual owners plus. Com club, you cant chase a flying market. And right now we have a flying market you need to understand where we are. What caused us to get hammered in the first place unfortunately many of these issues remain relevant even after todays rally. First yield sword thanks to fry fridays unemployment report investors become risk averse as they creep higher, treasuries represent a better
Points nasdaq 1. 8 . This was a vicious rotation powered by wall streets newfound love for the Big International industrials and the u. S. Bank. You really want to buy a bull market that has eyes only for a couple sectors, honestly you have no choice this markets been all about rotation for ages. Theres not enough new money coming into the equity markets to driver up everything at once. It migrates from one group to the next, following specific sectors by increasing dominance of eps so when a company like cat piller reports a magnificent quarter investors have no use for steady drug stocks like Johnson Johnson no matter how good they are. They are very good manage manage managers want more cap to blow more money they need to sell something to raise the cash meanwhile, Exchange Traded funds are perfectly placed off this dynamic. You can sell and use that money to buy cyclical etf and swap into a financial etf everything set up to compound the rotation and exacerbate it, that my friends
Advancing and new indices hit all time highs. That was easy. The bulls need to see a broadening outside of the winners. Todays rally encompassed more than a handful of stocks and internet darlings and tesla. A lot of investors have been worried this market was too narrow, it didnt have what we call the breath, the breath needed for a sustained advance. Todays rally was about as broadbased as weve seen all year. It has to be a tad disconcerting to the bears, who are betting we are on the verge of a sharp downturn. Because of a previous lack of upside participation. Here is what i mean. The other night i bemoaned the miserable performance of the dow transports and bellwether of weakness and sign the markets could be running on fumes. Today, they gave us exactly what we want. First, fedex United Parcel and stalled so badly of late, came out of the running blocks hot. We did see chattering after rallying a buck, 69 today is still up. And it made me feel we shouldnt give up on the commerce
Even when it looks like a company has already made a turn around, you need to stay close to them in order to know whether managementceed or fail. I mention this because when were dealing with a gigantic company, a turn around or a lack thereof can affect the entire stock market. Thats buy the dow jones fell 143 points. The nasdaq actually advanc advanced. 23 . What caused the dow to get clocked . This was all about ibms busted turn around story. The failu yes, 20 straight quarters of declining sales. Because of the way the dow is weighted, the downward tug of ibm stock, shaved more than 57 points off the dow, and i have been procuring some successful turn arounds, wall martimartwal mcdonalds and cocacola. Ibm is in the midst of an incredibly difficult turp around. While at the same time expanding into faster growing new tech areas that attract a different and morrow bust group of investors. Ibm wants to become known as the company that uses watsons platform. Watson wants to be viewed a