Nine years ago, on March 9, 2009, the stock market bottomed as plans to end overly strict mark-to-market accounting rules took shape. Banks were no longer forced to write-down assets to illiquid, un-traded market prices. Since then, profits have soared as entrepreneurs and innovators have overcome the headwinds of two tax hikes and a rise in regulations. Starting last year, these government-created headwinds began to shift, as deregulation and tax cuts became tailwinds for the economy and the ma… View More
February has kept investors on their toes. Just before the month began, Amazon, Berkshire Hathaway, and JP Morgan Chase announced their entrance into the Healthcare Market. The S&P 500 Healthcare Sector traded down 12% after the news broke. In February, the VIX (volatility measurement) climbed 176% and then fell off sharply to end the month at a more normal level. The S&P 500, Dow Jones, and Nasdaq were all down more than 8% for the month by February 8th, but ended the month down… View More
For the last few years we have been lulled into a false sense of security that no matter what happened in the world, the Market would continue to go straight up. All you needed to do is look at the VIX Index over the last few years to confirm my comments. VIX is the ticker symbol for the Chicago Board Options Exchange (CBOE) Volatility Index, which shows the market's expectation of 30-day volatility. It is constructed using the implied volatilities of a wide range of S&P 500 index options… View More
While we are unsure of what the next few weeks look like for the stock market as we work through putting in a tradeable low, we feel confident that when the fog clears, the trend will ultimately resume higher. The average S&P 500 decline in midterm election years is 18%. Midterm election sell-offs have proven to be great buying opportunities with stocks up an average of 36% one year later. We are very bullish on the economy, moderately bullish on equities (the economy could outperform the … View More
Markets rebounded Last week on positive economic data and stable interest rates. The CBOE Volatility Index (VIX) fell 33% as a sense of calm followed the recent selloff in stocks. Already, the 10% market correction has been cut in half; the S&P 500? Index ended the week down just 4.9% from its January 26 high. The recent pullback was exacerbated by strategies betting on low volatility; the 250% spike in the VIX triggered trading algorithms to unload stocks. That selling pressure app… View More