Kudrna's Stock Market Talk

Last week started out with early consolidation as the bulls took a breather after the run we’ve had.  By Wednesday, the bulls took charge once again, catching many longs under-invested and frustrating the shorts even more.  The action has been so bullish that it has converted many capitulated shorts, usually a sign further upside may be limited in the short-term.  Many traders, myself included, are cautious of a pullback that we never seem to be receiving, but we logically believe is around the corner.  A pullback is actually quite healthy, not negative, but you can’t tell that to this market as the bulls continue to run and the euphoria seems to be reaching critical levels. (more…)

Another frustrating week for the bears.  Bears continue to pound their heads against the wall as nothing seems strong enough to take the markets down.  Weaker-than-expected GDP did not even phase the markets much on Friday.  With the FOMC keeping interest rates low until 2014 and reducing growth expectations in 2012, we not only have have a fragile economic recovery, but we are continuing to pressure the savers/retirees for at least a few more years. (more…)

The trend continues and bonds sold off this week helping fuel more upside gains in the stock market. As noted in last week’s homework, a weekly trend has developed in bonds as they strengthen one week only to sell off the next week. That would mean if the trend continues, bonds will strengthen once again this week which could limit upside gains or even create a stock market pullback. (more…)

Our first full week of the new year and even with some red flags, we ended the week slightly higher.  The Europe crisis has shown its face once again and Friday saw a list of credit downgrades dominate the headlines all day long.  Even as I write this days later, you can find articles galore discussing that topic.  The situation is not pretty, but these downgrades should not come as a shock.  (more…)

For the first week of 2012, it was not a bad week at all.  The action wasn’t overly impressive for the bulls, but considering most were expecting a pullback, the bulls held strong. The question everyone is pondering is whether we will have some sort of pullback or are we going to continue to rise.  Friday may have hinted at more upside in the short-term, but we may need bonds to sell-off faster for this to happen. (more…)

A new year begins and 2011 is old news, regardless if it was good or bad.  You must forget about it either way. If you had a bad year, learn from it and make 2012 better.  If you had a good year, figure out why it wasn’t better and don’t be overly confident/reckless going into 2012.  This will help ensure you have better odds of repeat success. This is the time to wipe the slate clean and focus on the upcoming 2012 performance.  This is not about what you did in the past, this is what you can do for me now. Short-term memory, forget the past outside the lessons learned.  (more…)

Right down Santa Claus Lane.  The big man has finally arrived and the markets have rewarded the bulls with profits this past week.  Light volume has continued, but the bulls have remained in control throughout the week.  Bonds have finally sold off, fueling the surge higher in equities.  The enthusiasm and optimism has increased, but this is no time to blindly buy without a plan.  What Santa has giveth, he can taketh away at any time.   (more…)

Santa may be late this year, if he comes at all. The anticipated Santa Claus rally that many were looking for has now seemingly become a myth that will not come true. I’ve noticed other traders have performed some research and they say typically the Santa Claus rally is active for the last five trading days of the year into the first two of the new year. After another week of flat action, the bulls are growing more cautious and less optimistic this rally will take place. (more…)

Over the past week, sentiment has gone from invincibly bullish to cautiously neutral.  Once again, the markets have begun worrying about the EU situation, as we have come to expect. After tentative action starting Tuesday, the markets rebounded on Friday after fluff headlines that an EU agreement is in place. Unfortunately, the agreement still does nothing to truly remedy the situation, but you wouldn’t know that from Friday’s strong action. (more…)

Building upon last week’s aggressive and profitable action, we will look to see if the positive sentiment can continue for another week. It has been a long time since the bulls have had consistent positive action to work with. The EU situation is still a large burden. No real solution has even been discussed. Currently the only plan is tossing more money at the problem to delay more pain in the short-term. With that being said, we must stay aware and ready to pull our trades off the table if the sentiment starts to turn negative once again, and it will. The only question is when. (more…)