China plans to let its main state pension fund invest in the stock market for the first time, the country’s official news agency, Xinhua, has reported. Technicians know that the an oversold and wash-out market combined with signs of reversal is a powerful buy signal. As well, the market discussion has moved on from the timing of the first rate hike to the pace of the rate hikes. Ned Davis Research showed that the stock market has historically reacted much better to a slow pace of rate increases than a fast pace.
The market will undoubtedly shift its focus to the evolution of the dot plots to see how quickly the Fed is likely to raise rates. Both my inner investor and inner trader are bullishly positioned, with exposure to the market and in the commodity sensitive sectors of the market. The new site will be located at We are scheduled to go live in about a week and the readers will be able to subscribe on December 1st. As a result, stock begin to rise, led by interest sensitive sectors, such as Financial and housing related stocks.
I have therefore decided to open the site to subscribers as of December 1, 2015 and stop accepting new members on January 15, 2016 to better control the growth of this community (day passes will still be available). Large caps dramatically outperformed small caps during the Tech Bubble of the late 1990s and underperformed in the bear market afterwards – which were false signals. Mid cycle: Some analysts split this part of the cycle into several pieces, but here is roughly how market expectations change. Bear phase: The stock market falls because of the expectations of higher interest rates and falling growth.
During this part of the market cycle, Consumer Discretionary, capital equipment sensitive sectors like Technology and Industrial stocks lead the market higher. Examples include record levels of Mergers and Acquisitions ; wounded and dying unicorns and the growing sense of panic in Silicon Valley (via Luke Kawa ), as exemplified by Fidelity`s 25% writedown of its Snapchat stake ; and the frothiness seen in the art market. Synthetic credit is trading tighter than cash credit, which is also a sign that the market is paying for liquidity in the form of tighter spreads. History shows that rising spreads have been a precursor to economic recessions, which are bull market killers.
Market moves that aren’t supposed to happen keep happening, which can be caused by illiquid markets failing to clear at critical periods. A good analogy might be riding around in a motorcycle at high speeds without a helmet on. Nothing will happen to you unless your crash. At 570bp ex-energy spreads, the market is well ahead of what would normally be considered sufficient compensation for defaults that are still tracking sub-2% in this segment of our markets. Your financial goals should be in sync with stock-picking strategies and market trends.