Sunday, May 8, 2016
Friday, May 6, 2016
Small caps, dominated by technology stocks, have a more serious problem than the mid caps. However, it is clearly time to take profits and initiate protective strategies.
Aggressive traders should consider shorting or buying put options on high-P/E technology stocks. More conservative investors may still find bargains in the higher-yielding defensive sectors like utilities.
Thursday, May 5, 2016
Although the higher-quality stocks are comparably stronger, the Nasdaq and Russell 2000 led most of last year's powerful move to new highs. Now they are victims of profit-taking, poor earnings and a fearful public — a recipe for lower prices.
The January/February lows are not yet in jeopardy. But May is upon us and, whether or not you believe in "Sell in May and go away," stocks were under broad selling pressure Wednesday that was increased by weaker-than-expected economic data.
Wednesday, May 4, 2016
It has been an epic melt-up since the bears exhausted themselves in February. But given the structural, cyclical, seasonal and technical headwinds we face, traders are likely better off selling into this rally.
Longer-term investors should wait for much lower levels before legging back into quality growth stocks.
At the very least, I think the S&P 500 will retest its February lows near 1,800. But a decline to the 1,600 to 1,700 area is probable before a continuation of this secular bull market can take hold.


