This may be the week we look back and say ‘the bull started to tire here’ … there was a great point made by somebody on a comment area to a Seeking Alpha post … buying the dip and catching falling knives are going to get much more complicated and there will be many people with bloody hands. i agree and introduced a new mataphor – no more knives, i will be looking to catching balloons after the knives fall all the way and stick into the ground. Missing the absolute bottoms is not a concern at this phase … watch for baloons
Some highlights from Jeff Miller’s WTWA
- Weekly S&P snapshot
- This was an interesting data set … the inferences are difficult to make but one favorite opinion is that middle class folks can no longer afford investing and more and more capital is concentrated (i prefer this); but others are using it as a retort to bull market insanity (i cannot buy this fully)
- I love this analysis of labor market and i find it skewed to the younger side of the employee base. this same data (i believe) would look very differently by age groups (<40 and >45)
- Weekly indicators … look at the 10 yr; higher at same time anticipated inflation is lower … key question is are rates a blip up and opportunity for bond purchases or is this a directional confirmation (higher rates)
Other sources and thoughts
- S&P earnings keep powering ahead and forecasts https://seekingalpha.com/article/4123936-s-and-p-500-earnings-update-forward-4-quarter-estimate-continues-climb
- A simple explanation of resistance to higher rates https://www.blackrockblog.com/2017/11/06/interest-rates-normal/
- A counter point to rate increase difficulty https://www.advisorperspectives.com/commentaries/2017/11/09/the-feds-long-unwinding-road
- this is pretty superficial analysis and i am sure there are deeper data dives behind this, i do agree and i am looking at 3 places for new long term equity positions: China, S Korea and India. I am looking to build up my ETF positions in those countries in non-taxed accounts – favorites are: IEMG and EFV. https://www.advisorperspectives.com/commentaries/2017/11/09/international-equities-are-en-vogue-and-could-stay-that-way
- I filled my position in PEGI across all accounts. The earnings conference call was compelling to me and especially their strategy and emerging success in Japan.
- I closed my open trading position in IOTS after earnings report for a decent profit. I really like this company and will buy more as the price stabilizes … a very small company with a growing design win pipeline in the IOT low power memory segment. This is another piece of my IOT narrative for which i am thinking of an EOY post on all the components and associated investments.
- The week ahead will be fully focused on GE and their strategy update