About Me

Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Saturday, April 20, 2013

Stock Market -- Weekly

Fundamental
My weekly cyclical fundamental indicator (WCFI) hit a cyclical peak in the latter part
of  Mar. It has been weaker since then, and so it may be noteworthy that the stock market
has adjusted back down to levels seen a month or so ago. The coincident indicator
portion  of the WCFI has been advancing over the past year, but its momentum has been
slight compared to the first three years of recovery. The forward looking component of
the WCFI rose sharply over the late Nov. '12 - late Mar. '13 interval but has been weak
and volatile since reflecting the unsettled readings on jobs loss claims. However, on a
more heavily smoothed basis, the leading economic indicator component of the WCFI
is also around a cyclical high. Even so, the choppy week-to-week action of the WCFI
reduces visibility for the stock market and has induced some edginess among players.

The mild pullback in the market since the Apr. 11 all time high does bring it back
more in line with the evidence of a slowing economy and also goes to somewhat
assuage my concern that the big QE program would drive stocks up willy nilly even if
the tempo of the economy had slowed.

Technical
The weekly chart shows that the cyclical bull market continues to move along. It does
remain extended vs. the 40 week m/a and sits about 7% above the trendline underscoring
advances since the early autumn of 2011. the indicators are deteriorating, and without
another positive whipsaw soon, there will be an intermediate sell signal forthcoming for
the market. SPX Weekly

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