The Rally Has Paused

I update each Saturday with my view of the stock market for the next few weeks (if occupied with family or travel, rarely I am a day or two late, just check back).  The monthly “Long Term” update will be on a Wednesday soon after the 15th of each month, and this supports investors who want to buy and hold, but want to sell to avoid the bulk of a primary bear market, and buy back in for most of the next bull market.  You can always scroll down a few weeks and find the latest “Long Term” update.

If you lose your bookmark to the blog, google “Rich Investing” and it should show up on the first page or so.  The more often you google it and hit the link, the higher it will show in your results.

The monthly Long Term update will be posted on Wednesday the 19th.

Economy:

The CPI rose a scant 0.1% in April, the smallest increase since January, while the increase in the cost of living over the past 12 months slowed to 1.8% from 2%.  Initial jobless claimed rose by 3,000 to 222,000 in the seven days ended June 8.  U.S. retail sales increased 0.5% in May, with broad-based gains, and the weak April data was revised up considerably.  The University of Michigan said its consumer-sentiment index in June fell to a reading of 97.9 from 100 in May.

There are no concerns looking at these numbers.

Geo-Political:

The geo-political backdrop for the US is a mess.  We are involved in a yearlong trade war with China that shows no sign of resolving.  Trump and President Xi of China are not scheduled to meet at the G20 summit in Japan on June 28-29.  Negotiating with China is different than with the Atlantic City city council.  Trump threatened Mexico with tariffs over the transit of asylum seekers through its country, which could have been done silently, if at all.  That could have been quietly negotiated but Trump seems to want the publicity.  Trump has threatened the EU with tariffs that would hurt our best allies in Europe, primarily Germany and France.  Trump pulled out of the Iran nuclear deal and now tensions in the Middle East are increasing.  Iran is refusing to even speak to Trump and it appears he has started a diplomatic conflict without a plan to end it.

The international economies are all slowing, including the US.  US GDP won’t be announced until late July, but CEO’s report business is slowing.  We have a year and a half until the presidential election and I think the democrats are timing out their investigation into Trump’s 2016 activities with the Russians to do maximum damage to his campaign.  I’m not sure what the timetable looks like, but that would be my bet.  My guess would be that they do impeach him in the House and of course the Senate will not convict him, but he will be damaged.  That is what the Republicans did to Hillary with the ten Benghazi investigations that ended without finding anything substantial that she did wrong in the matter.

The US budget deficit is out of control and obscene.  We will end this fiscal year with a deficit of nearly a trillion dollars, ten years into the recovery with a still expanding GDP, near record high stock market, low unemployment rate, and low inflation.  You are supposed to run large deficits at the bottom of recessions as income tax receipts fall due to layoffs, and government spending or tax cuts are used to stimulate the economy.  You are not supposed to run large deficits at the top of expansions when government stimulus should not be needed to drive the economy and everyone has a job.  With the total US debt at $22 trillion, I fail to see how this ends well.  I don’t know when the tipping point will come, but I believe one is out there.  I think the only reason interest rates are not driven higher by the bond traders is that so much European and Japanese debt is at negative interest rates, which steers their bond buyers into the US bond market.  As near as I can tell, the multi-year experiment with negative interest rates internationally has been a failure, as all those economies still perform worse than the US economy, and savers the world over are punished.  They should have positive rates and let the savers draw a safe monthly income, and maybe they would take a vacation or go eat out a bit more and stimulate their economy.

On the plus side for the market, the Fed Chairman recently said he was open to a rate cut if the economy needed it to continue its expansion and the market has rallied for two weeks.  GDP for Q2 is expected to be weaker than the last two years, but positive.  Earnings are expected to be flat in Q2 vs. last year, but last year was exceptionally strong.  The bond market has been bidding bonds up in value and yields have been falling.  That is bad for savers, but good for home buyers as mortgage rates have come down.

That’s my general view of the backdrop we live in.

Technical Analysis:

Market action this week was flat.

Technically, the market is neutral to mildly positive.  RSI at the top of the chart is at 58 and flat for the week.  Momentum shown by MACD at the bottom of the chart is positive with an upward trend, but it might be flattening out.  Price action is positive, but flat for the past week.  We are not extended too far above the 50-day moving average, which indicates we don’t need to correct for being over extended.

I think the story of this market is not garnered from the technical right now, rather it is being told by events in the US and around the world.  That has me cautious.

2019 06 14

Click THIS LINK to open the chart in a separate window.

What am I doing?  Not much.  June 21 I have several option contracts expire and I will keep some premiums and have a few stocks called away at nice short term profits (AMD, ILMN, and MRK).  I hold lots of cash and will deploy some on pullbacks using low ball buy orders to pick up quality stocks at good prices, but it would take a substantial pullback to get me to commit larger amounts to the market.  I don’t like the backdrop.  In place of some lowball buy orders, I have been selling Puts, which act like a lowball buy, but you can collect the option premium for committing to a particular buy price by a certain date.  I should collect a Put premium on an XOM 6/21 $70 put next Friday (I collected the premium when I sold the Put, but I will no longer be obligated to buy the stock if it falls below 70 after Friday).

If you enjoy these updates, please tell your friends and family who are interested in the stock market about this blog.

Your comments and questions are always appreciated, so feel free to comment using the “Leave a Comment” feature just under the title of the post, or send me an email, my address is on the “About” page at the top of the blog.

You can use the hyperlink below the chart of the S&P that will open a larger picture of the chart in a separate window.  The reader who suggested this wants to look at the chart side-by-side with the blog text so he can look at the chart while reading the text.  To do this in Firefox you can open a “private window” from the browser menu and have two instances of Firefox up, then size each window to about half of your monitor size.  If you bookmark the link to the chart you can look at it each day of the week to see how the market is progressing to certain milestones.  The picture in this post is a static .jpg so it does not update, but if you bookmark the link to the live chart on stockcharts and look at that daily, it does update.

Rich Comeau, Rich Investing

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A Miracle Has Occurred – The Fed Has Spoken

I update each Saturday with my view of the stock market for the next few weeks (if occupied with family or travel, rarely I am a day or two late, just check back).  The monthly “Long Term” update will be on a Wednesday soon after the 15th of each month, and this supports investors who want to buy and hold, but want to sell to avoid the bulk of a primary bear market, and buy back in for most of the next bull market.  You can always scroll down a few weeks and find the latest “Long Term” update.

If you lose your bookmark to the blog, google “Rich Investing” and it should show up on the first page or so.  The more often you google it and hit the link, the higher it will show in your results.

Economy:

American manufacturers said business in May grew at the slowest pace in two and a half years, reflecting disruptions caused by the trade standoff with China as well as softer auto sales.  The ISM manufacturing index slipped to 52.1% last month from 52.8% in April.  Anything over 50 shows growth, but growth is slowing as a year ago this number was up at 60.  The ISM services index (which now is much larger than the manufacturing sector) rose to 56.9% last month from a two-and-a-half-year low of 55.5% in April.

Factory orders in the U.S. fell sharply in April for the second time in three months, declining .8% and adding to mounting evidence of a broad slowdown in a key segment of the U.S. economy.  Initial jobless claims were flat at 218,000 last week.

The U.S. created just 75,000 new jobs in May and employment gains earlier in the spring were scaled back, a worrisome turn that points to a slowing economy and is likely to put more pressure on the Federal Reserve to cut interest rates.

There are a few more negative stats than positive ones, and that is a cause for concern, in addition to the “news” items on trade.

Geo-Political:

After some agreement between Mexico and the US to stem the flow of asylum seekers from Central America to the US, Trump has suspended the 5% trade tariff.  The stock market had tanked two weeks ago on the Mexico tariff threat, and it recovered nicely last week.  It was like someone in the administration signaled to Wall St. not to worry, the tariffs would not be imposed, as they seemed absurd.

Regarding the China trade war, it grinds on.  When Trump ran for president, he said he wanted to bring down the trade deficit with China.  One year into the trade war, it is apparent that the objective has changed (or we were lied to in the first place), and the objective has more to do with hobbling China as an economic competitor to the US.  Read the piece below from a Chinese news outlet owned by Alibaba, about 9 months ago:

Aug. 19, 2018 – For nearly two weeks, China’s top leaders disappeared from public view as they gathered at a secluded beach resort in eastern Hebei province this month. Though the heavily guarded gathering in Beidaihe was secret, their agenda was likely dominated by the trade war with the United States – and the emerging view that the nations’ escalating tensions go beyond trade and economic disputes.

There are signs of a new resolve that sees the trade conflict as part of Washington’s design to temper China’s rise to greater power. While Beijing is willing to continue engaging the US – it has dispatched commerce vice-minister Wang Shouwen to the US for talks this month – the earlier optimism of finding a quick solution has been replaced by a grittier determination.

Observers said Wang was unlikely to achieve any breakthroughs other than paving the way for more negotiations.

“Trump is very confident now, and China should not appear weak,” a former Chinese trade official said, referring to US President Donald Trump. “China has to appear confident and stand firm, resisting the maximum challenges by Trump. Making too many concessions at an early stage will only push Trump to be more provocative.”

Leading up to and during the Beidaihe meeting, state media published a series of editorials and commentaries casting a harsher light on Sino-US relations. A signed commentary published by party mouthpiece People’s Daily on August 10 said the Trump administration had continued the “engagement plus containment” approach to China, hoping to significantly reshape China’s development in America’s image.

“A review of the trade negotiations with the US shows the American government has been inconsistent, ambivalent and capricious,” it said. “But the behind-the-scenes logic is pretty clear – it is never just about narrowing trade deficits, but to contain China in much broader areas.”

<snip>

Observers pointed out that Beijing’s attitude towards the US began a delicate shift after the Trump administration billed China as a strategic competitor and rival power in December.

“That’s a big blow for China,” Li said. “For Beijing, everything can be discussed as long as it was treated as a possible partner or a friend. But many things can’t be negotiated as enemies.”

https://www.scmp.com/news/china/diplomacy-defence/article/2160375/more-tariffs-china-sees-trade-war-new-us-containment

Bottom line, there is no agreement, and the likelihood of an agreement is diminishing.  In warfare, there are casualties on both sides, and while the US has more economic power, with more economic diversity, wider number of trading partners, and a much stronger middle class that can keep consuming our goods, there are certain sectors such as agriculture that are dangerously exposed by their dependence on China as a consumer.  The administration may say “just move your supply chain to Vietnam or Indonesia”, it clearly is not that easy to do.  If you are just buying raw materials, you can move it, but if you have located a plant in China and trained a workforce, it can take years of planning to build a new factory, train a new workforce, and then the government is asking you to abandon a factory building of yours, like it had been destroyed by a bombing raid; just another casualty of war, but it hurts.

For the stock market, expect more turbulence, and more volatility.  To the extent that the trade war has spillover effects regionally and possibly globally, it imperils all of our economies with recession.  I am not saying that a recession must occur, but I am saying the possibility of a recession is increased by the China trade war.  I don’t think it would start in the US as we have a strong economy, but watch other nations as it would start in weaker economies.  Venezuela is toast, we are stepping on Iran, China is slowing, Europe is sluggish.  Will that eventually backup into the US economy?  It could.

Technical Analysis:

The stock market rallied the same 2.5% up that it lost the week before.

The market rallied on Fed Chairman Powell’s statement that the Fed was willing to act to support the US economy, if needed.  In this 10 year old secular bull market, every time the Fed has expressed willingness to be accommodative, the market has rallied.  However in 2007, even the Fed rate cuts were not sufficient to ward off that severe recession.  So, the promise of a rate cut is not a silver bullet.  Of most concern is that the US economy might be weakening enough to warrant a rate cut; that’s not a good thing.  At the end of the day, it is not what the market thinks, it is what do YOU think!

Technically, last week the market was oversold and I said if the bull market remained in effect, we should get a bounce, and we did.  We have moved up to neutral territory.  RSI at the top of the chart is in neutral at 55, and momentum measured by MACD at the bottom of the chart is turning up showing a short term buy signal.  The price action is positive on a short term basis.

2019 06 07

Click THIS LINK to open the chart in a separate window.

I am not comfortable with the economy or the market these days.  A year ago it was all about the “global synchronized recovery”, but no longer.  Now it is about trade wars and global slowdown.

I do not like it when the market rises or falls “on the news”.  It is supposed to trade on corporate profits, and after the government gift to corporate America in 2018, growth in profits is negligible right now, and for the next 2 quarters at least.  When it looks like we are going to get a deal with China, the market goes up, when it looks like we won’t, the market goes down.  The Fed Chairman says he’s open to a rate cut, the market goes up.  I don’t think it is healthy for the market.

Meanwhile interest rates are falling in the bond markets because the bond traders see weakness in the economy, they anticipate the Fed will cut rates if the weakness persists, and so far the bond market has been getting it right.

But don’t take it just from me:

June 7, 2019 – Billionaire hedge fund manager Stanley Druckenmiller told CNBC on Friday that while the Trump administration’s tariffs may not appear that damaging on paper, their chilling effect on business sentiment could have an even greater impact on the economy and financial markets.

“Animal spirits is something you can’t measure, but confidence matters,” he said on “Squawk Box. ” “And you do wonder whether this is enough to kill animal spirits.”

“If you’re a company and you’re thinking about building a plant or doing capital spending — I mean really? Aren’t you going to wait now? See how this thing is resolved, what’s going on?” he added.

Equities slid in the month after Trump’s May 5 tweet sparked renewed angst surrounding U.S. trade with China. The Dow Jones Industrial Average fell more than 1,700 points in May following the president’s tweet and threats of retaliation from Beijing. The S&P 500 fell 6.5% during the month.

Druckenmiller says he’s unsure about the direction of markets right now. He’s not overly bearish or bullish on stocks.

“If you calculate the tariffs, at least the one we’ve had just in and of themselves, it doesn’t look like it’s that damaging. But at the same time, Ben Bernanke — who’s a great, great mind, got a lot of IQ points on me — he thought subprime was contained,” Druckenmiller said.

“If you just do the math, same thing: The tariff thing doesn’t look that damaging. But if you take all of the other effects in confidence — we’ve had a few more things down the road since then,” he said. “Huawei and 5G was going to be one of the great engines of not only U.S. but global growth. That’s challenged now. We’ve interrupted that supply chain. Supply chains all over the world have been sort of twisted around.”

Earlier this week, Druckenmiller got flat in his investment portfolio and bought Treasurys after President Donald Trump’s May tweet reignited U.S.-China trade hostilities.

“When the Trump tweet went out, I went from 93% invested to net flat and bought a bunch of Treasurys,” Druckenmiller said. “Not because I’m trying to make money, I just I don’t want to play in this environment.”

https://www.cnbc.com/2019/06/07/stanley-druckenmiller-fears-tariffs-could-kill-the-markets-animal-spirits.html

What am I doing?  I still hold lots of cash, but from the fully oversold level of late May, and the monthly Long Term report shows we’re still in a bull market, I was willing to make some short term commitments to the market on an individual stock basis.  I had a low ball buy in for Luminate (ILMN) and got some at 315.  I also picked up some AMZN on the pullback; it is dicey as the DOJ will investigate whether AMZN, GOOG, and FB are monopolies and should be broken up and they all fell substantially.  OK, we’re going into a trade war with China and we are considering hobbling 3 or our largest most innovative corporate giants.  Yep, that makes sense.  I am trying to pick up quality names that are oversold, ride them for a swing up, and sell them if they go to overbought levels.  These are relatively small positions, and if the market goes down, I may add another small piece.  I am doing this because I don’t trust the overall backdrop of the market right now.  There are large cross currents and things are complicated right now.  Even Stan Drunkenmiller says so.

This has been a hard report to write, because of the cross currents, took me till noon.  I’m sorry to give you so much to read, but it’s complicated right now.

If you enjoy these updates, please tell your friends and family who are interested in the stock market about this blog.

Your comments and questions are always appreciated, so feel free to comment using the “Leave a Comment” feature just under the title of the post, or send me an email, my address is on the “About” page at the top of the blog.

You can use the hyperlink below the chart of the S&P that will open a larger picture of the chart in a separate window.  The reader who suggested this wants to look at the chart side-by-side with the blog text so he can look at the chart while reading the text.  To do this in Firefox you can open a “private window” from the browser menu and have two instances of Firefox up, then size each window to about half of your monitor size.  If you bookmark the link to the chart you can look at it each day of the week to see how the market is progressing to certain milestones.  The picture in this post is a static .jpg so it does not update, but if you bookmark the link to the live chart on stockcharts and look at that daily, it does update.

Rich Comeau, Rich Investing

Correction Worsens on Mexico Tariff Threat

I update each Saturday with my view of the stock market for the next few weeks (if occupied with family or travel, rarely I am a day or two late, just check back).  The monthly “Long Term” update will be on a Wednesday soon after the 15th of each month, and this supports investors who want to buy and hold, but want to sell to avoid the bulk of a primary bear market, and buy back in for most of the next bull market.  You can always scroll down a few weeks and find the latest “Long Term” update.

If you lose your bookmark to the blog, google “Rich Investing” and it should show up on the first page or so.  The more often you google it and hit the link, the higher it will show in your results.

Economy:

Initial jobless claims rose by 3,000 to 215,000 in the seven days ended May 25, still in the low range.  Gross domestic product, the official scorecard for the economy, grew at a 3.1% annual pace in the first quarter, marked down from an initial 3.2% estimate.

Geo-Political:

Trump roiled the markets this week with more threats of tariffs, both against China and Mexico.  This is a really big deal to US business, forcing them to increase their production cost for raw materials and either suffer reduced profits or pass the price increase along to consumers.  The use of tariffs against Mexico is a particularly bad idea since they have nothing to do with trade, rather they are a response to the flow of immigrants from Honduras and El Salvador across Mexico to the US.

May 21, 2019 –  U.S. President Donald Trump says China pays the tariffs he has imposed on $250 billion of Chinese exports to the United States.

But that is not how tariffs work. China’s government and companies in China do not pay tariffs directly. Tariffs are a tax on imports. They are paid by U.S.-registered firms to U.S. customs for the goods they import into the United States.

Importers often pass the costs of tariffs on to customers – manufacturers and consumers in the United States – by raising their prices.

U.S. business executives and economists say U.S. consumers foot much of the bill through rising prices.

White House economic adviser Larry Kudlow has acknowledged that “both sides will suffer on this,” contradicting the president.

The tariff bill is set to rise further. Trump this month directed U.S. Trade Representative Robert Lighthizer to launch the process of imposing tariffs on the remaining $300 billion of goods from China. That includes products ranging from cellphones to baby pacifiers.

That would mean almost all imports from China would be subject to a 25 percent import tax.

U.S. COMPANIES SEE RISING CONSUMER PRICES

A growing number of U.S. companies has warned about the negative impact of the tariffs on U.S. consumers.

Nike Inc and 172 other footwear companies have urged Trump to remove footwear from a list of imports facing a proposed extra 25% tariff, warning the move could cost consumers an additional $7 billion a year.

DO CHINESE SUPPLIERS BEAR THE COSTS OF U.S. TARIFFS?

Chinese suppliers do shoulder some of the cost of U.S. tariffs in indirect ways. Exporters sometimes, for instance, are forced to offer U.S. importers a discount to help defray the costs of higher U.S. duties. Chinese companies might also lose business if U.S. importers find another tariff-free source of the same goods outside China.

But U.S.-based importers are managing the higher tax burden in a number of ways that hurt U.S. companies and customers more than China.

Such strategies include accepting lower profit margins; cutting costs – including wages and jobs for U.S. workers; deferring any potential wage hikes, as well as passing on tariff costs through higher prices for U.S. consumers or companies.

Most importers use a mix of such tactics to spread the higher costs among suppliers and consumers or buyers.

Higher duties on imports of metals and Chinese products, for example, increased Caterpillar’s production costs by more than $100 million last year. In response, the heavy-duty equipment maker increased prices for its products.

https://www.reuters.com/article/us-usa-trade-china-tariffs-explainer/who-pays-trumps-tariffs-china-or-u-s-customers-and-companies-idUSKCN1SR1UI

Technical Analysis:

In another poor week for the S&P, it lost 2.6% for the week, while the DJIA was down for the sixth straight week, the first time it has done that since 2011.  Most of this is in response to harsher threats on trade with China, with the added threat of tariffs on Mexico.  But corporate profits have stalled and globally there is an economic slowdown.  There is just not much to get excited about to cause the stock market to rally.  Many expect the next move by the Fed to be a rate cut in the fall, but even that would be an admission that the economy is weakening and would probably not cause more than a temporary rally in the stock market.

Technically the chart is a disaster.  RSI (Relative Strength Index) at the top of the chart has fallen to 30 and if fully oversold.  If this remains a long term bull market, we should get a rally up from oversold.  I will not commit funds until the market shows a bounce.  Momentum shown by MACD at the bottom of the chart is falling, a short term negative.  Price action is poor so there is nothing to like about the chart currently.  The price has broken below potential support at the 200 day moving average at 2775, a bad omen.  There is possible support at 2725 from the early March low, and stronger potential support at 2630 from the old double bottom last fall (see the lower green line).  I added the second aqua line on the early May peak, making a large potential double top with the peak last fall.  These peaks being seven months apart is a large formation and if we don’t get out of this market funk and go on to a new high, the correction from the double top could be equally large.  That is a big risk given the picture painted by everything else.

Bonds have rallied and yields have fallen.  Investors are selling stocks and going to bonds, not good for the stock market.  There have been minor inversions of the yield curve which can signal a future recession, usually six months or a year ahead.

2019 06 01

Click THIS LINK to open the chart in a separate window.

In a bull market, when the market gets down to fully oversold levels, it does not usually stay there long.  I will be watching to see how long we remain oversold.  I will be watching to see if the nature of the market action is changing.

I didn’t do much last week.  I sold a few covered calls on stocks I hold and one low ball buy hit and I picked up a few shares of AMZN.

If you enjoy these updates, please tell your friends and family who are interested in the stock market about this blog.

Your comments and questions are always appreciated, so feel free to comment using the “Leave a Comment” feature just under the title of the post, or send me an email, my address is on the “About” page at the top of the blog.

You can use the hyperlink below the chart of the S&P that will open a larger picture of the chart in a separate window.  The reader who suggested this wants to look at the chart side-by-side with the blog text so he can look at the chart while reading the text.  To do this in Firefox you can open a “private window” from the browser menu and have two instances of Firefox up, then size each window to about half of your monitor size.  If you bookmark the link to the chart you can look at it each day of the week to see how the market is progressing to certain milestones.  The picture in this post is a static .jpg so it does not update, but if you bookmark the link to the live chart on stockcharts and look at that daily, it does update.

Rich Comeau, Rich Investing

Correction Continues

I update each Saturday with my view of the stock market for the next few weeks (if occupied with family or travel, rarely I am a day or two late, just check back).  The monthly “Long Term” update will be on a Wednesday soon after the 15th of each month, and this supports investors who want to buy and hold, but want to sell to avoid the bulk of a primary bear market, and buy back in for most of the next bull market.  You can always scroll down a few weeks and find the latest “Long Term” update.

If you lose your bookmark to the blog, google “Rich Investing” and it should show up on the first page or so.  The more often you google it and hit the link, the higher it will show in your results.

Economy:

Existing-home sales ran at a seasonally adjusted annual 5.19 million rate in April, 0.4% lower than March and 4.4% lower than a year ago.  New-home sales were at a 673,000 seasonally adjusted annual rate in April and the trend remains upward.  Minutes from the last Fed meeting were released on Wed. and indicate the Fed remains on hold.  Initial jobless claims dipped by 1,000 to 211,000 in the seven days ended May 18, near a 50 year low.  Orders for durable goods dropped 2.1% in April; if cars and planes are stripped out, orders were flat.

Home sales were mixed despite mortgage rates backing down in recent months and we are in the middle of the spring selling season, that is poor.  The Fed is on hold, employment is high and steady, and durable goods orders are steady.  It’s a stagnant situation, but further escalation of the China trade war could cause degradation of the economy.

Geo-Political:

The latest on the China trade war:

May 20, 2019 – Trade tensions between the U.S. and China stalled a global recovery and are continuing to endanger investment and growth, the secretary general of the OECD warned Monday.

We were in the middle of a recovery when all these decisions about trade started and not only did it stifle the recovery, it basically has produced the slowdown and the potential for greater damage is still there,” Angel Gurria told CNBC.

“Everybody is betting today… on a deal between China and the U.S. but the problem is that on the face of it the tensions are getting greater and, second, the problem – the spillover effect of this tension – is becoming more and more evident,” he told CNBC’s Joumanna Bercetche at the start of the OECD’s Spring Forum in Paris.

https://www.cnbc.com/2019/05/20/us-china-trade-uncertainty-is-the-enemy-of-growth-oecd-warns-as-it-slashes-forecasts-trade-tensions-between-the-us-and-china-stalled-a-global-recovery-and-are-continuing-to-endanger-investment-and-gro.html

The above suggests stagnation.  CEO’s will be hesitant to commit to any long term major investment until they can clearly see the environment into which such an investment would be made.

The trade war is also impacting Europe as this report shows (it’s two weeks old):

The European Commission cut its growth forecasts for the euro area and slashed its projection for Germany as it warned that escalating trade tensions threaten to make the outlook even worse.

Most of the downgrades were less severe than in the previous report in February, apart from Germany, where the 2019 prediction was slashed to just 0.5 percent from 1.1 percent. Officials in Brussels warned that downside risks to the region’s outlook remain “prominent.”

https://www.bloomberg.com/news/articles/2019-05-07/eu-cuts-german-growth-outlook-sees-pronounced-euro-area-risks

Technical Analysis:

The stock market was down a bit this week and the 5-week losing streak is the longest since 2011.

Technically the chart shows we remain in correction mode.  Last week’s rally attempt failed.  At the top of the chart, RSI has weakened to 40, a low neutral level.  Momentum shown by MACD is weak and falling, not a good sign for the short term.  The price action is down, also a negative.  With Trump making threats to escalate the trade war again by placing tariffs on an additional $300 billion of Chinese imports, after he raised the tariff on the first $200 billion from 10% to 25%, and a new round of talks not scheduled, things look poor on the trade front.

2019 05 24

Click THIS LINK to open the chart in a separate window.

What did I do this week?  I went to visit family and I did very little trading.  I remain cautious on the market and I hold lots of cash.  I had bought some TGT a few weeks ago, they reported good earnings and the stock popped up, so I sold it and took that profit.  My thinking is short term in this downtrend and I am only buying stocks that have sold off significantly.  If they pop significantly I will probably sell them, since even good stocks can get pulled down by a bad market.  I had sold a May 70 XOM put that expired without being exercised, so I kept that option premium, and I sold the June 70 XOM put.  I would not mind picking up some XOM at 70, and if not then I get to keep the option premium.  If you don’t have the money to buy the stock shares and the price drops below the strike price on your put option, you will have to “buy to close” an offsetting number of options, at a loss to you.

I keep my eye on the Oct. / May potential double top.  I think about the P/E ratio on the S&P that I post each month on the Long Term update (2 weeks ago, down below), which is moderately overvalued.

If you enjoy these updates, please tell your friends and family who are interested in the stock market about this blog.

Your comments and questions are always appreciated, so feel free to comment using the “Leave a Comment” feature just under the title of the post, or send me an email, my address is on the “About” page at the top of the blog.

You can use the hyperlink below the chart of the S&P that will open a larger picture of the chart in a separate window.  The reader who suggested this wants to look at the chart side-by-side with the blog text so he can look at the chart while reading the text.  To do this in Firefox you can open a “private window” from the browser menu and have two instances of Firefox up, then size each window to about half of your monitor size.  If you bookmark the link to the chart you can look at it each day of the week to see how the market is progressing to certain milestones.  The picture in this post is a static .jpg so it does not update, but if you bookmark the link to the live chart on stockcharts and look at that daily, it does update.

Rich Comeau, Rich Investing

Flat week

I update each Saturday with my view of the stock market for the next few weeks (if occupied with family or travel, rarely I am a day or two late, just check back).  The monthly “Long Term” update will be on a Wednesday soon after the 15th of each month, and this supports investors who want to buy and hold, but want to sell to avoid the bulk of a primary bear market, and buy back in for most of the next bull market.  You can always scroll down a few weeks and find the latest “Long Term” update.

If you lose your bookmark to the blog, google “Rich Investing” and it should show up on the first page or so.  The more often you google it and hit the link, the higher it will show in your results.

The monthly Long Term update was posted this week so if you follow those, just scroll down after this one.

Economy:

Retail sales dropped 0.2% last month for the second drop in three months, a caution sign on the consumer.  The U of Michigan’s consumer sentiment index in May climbed to a reading of 102.4, a 15-year high, out of character with the drop in retail sales.  The index of leading economic indicators for April reflected a 0.2% gain over March, following a 0.3% increase that month, and 0.2% rise in February, so there is little chance of a recession in the next six months.

The economy is chugging along, not too hot and not too cold, especially if you are lucky enough to not be in a sector that China is targeting or retaliation.

Geo-Political:

Status of the US / China trade negotiation:

May 17, 2019 – Negotiations between the U.S. and China appear to have stalled as both sides dig in after disagreements earlier this month.

Scheduling for the next round of negotiations is “in flux” because it is unclear what the two sides would negotiate, two sources briefed on the status of the talks said. China has not signaled it is willing to revisit past promises on which it reneged earlier this month, despite showing up for talks in Washington last week.

Both sides have dug in on their positions this week. China propped up its currency and cut U.S. pork orders, while state media took on an increasingly nationalistic message. The Trump administration, meanwhile, put Chinese telecommunications company Huawei and its affiliates on a business blacklist and banned it from the supply chain, actions it had shelved earlier in the trade talks to smooth relations.

China has invited the U.S. delegation to Beijing, and earlier this week, Treasury Secretary Steven Mnuchin appeared open to accepting the offer. But sources say scheduling discussions have not taken place since the Trump administration ratcheted up its scrutiny of Chinese telecom companies. The move was seen as a shot across the bow.

President Donald Trump on Friday again said the world’s two largest economies came close to a trade agreement before China backtracked.

“We actually had a deal and they broke it, OK?” the president told the National Association of Realtors.

A spokesperson for China’s Foreign Ministry said that China prefers to resolve disputes through dialogue. The countries’ two presidents have been in touch, the spokesman said, but the U.S. overall has been “insincere” in its position.

“Words must be matched with deeds,” spokesperson Lu Kang said at a daily briefing.

Reacting to U.S actions on Huawei, China’s Commerce Ministry said in a statement, “We firmly oppose the act of any country to impose unilateral sanctions on Chinese entities based on its domestic laws, and to abuse export control measures while making ‘national security’ a catch-all phrase. We urge the US to stop its wrong practices.”

https://www.cnbc.com/2019/05/17/us-china-trade-talks-have-stalled-sources.html

What is really going on?  Who knows, not me.  Usually what the sides are saying publicly is for show and has little bearing on what is REALLY going on.

It is possible that the Trump administration views China as a strategic threat and they aim to throttle their progress economically.  In that case, tariffs and “no deal” would hurt China the most, economic warfare.  In shooting wars, people die.  In economic wars, companies earn less per share, or they may go bankrupt.  When we attack China economically, there will be casualties on both sides, US and China.  Who would you expect China to retaliate against when the US levies sanctions?  The farmers of course, since they account for the largest exports from the US to China.  Could the farmers be considered “collateral damage” in the trade wars, to try to stop the Chinese from stealing valuable intellectual property from our high tech sector?  That’s possible; I mentioned this scenario last year.  We still don’t have a deal, and one possible reason is that we don’t really want a deal from the Chinese because we intend to stifle their economy, and we realize there will be damage done to ours, but we think strategically it will help the US in the long run.  Nixon had Kissinger participated in the Paris Peace Talks with the N. Vietnamese for years before signing a deal.  The US presented one deal only, which we knew the N. Vietnamese would not accept.  Why?  We did not want to make peace, but the pressure was rising in the US and we had to make it LOOK like we were doing something to achieve a peaceful settlement.  It was only for show.  The peace was done after we had conducted a massive bombing campaign against the North that failed to break them in time, before the pressure from the public became too strong to resist.  Is that what is going on currently with China?  I don’t know, but it is one possibility.

There are other ways to proceed beside a trade war.  We could have assembled a broad coalition of our allies and all agreed to move our manufacturing elsewhere, without tariffs.  This administration has riled so many of our traditional allies that it does not appear likely that we could have lined up enough support.  Germany would not be likely to support a US initiative while the US is threatening tariffs on imported autos from there.

The other factor is the election in 18 months.  For Trump to have a chance to win, I think he must have a deal with China, or a damn good explanation why not.  Sectors of the US economy are suffering, and if this continues without the US getting something very valuable in return, voters will be angry at paying a price without a commensurate gain.  China is suffering, but Xi does not have to stand for election.  Most observers think we will get a deal, but they don’t know how many concessions we will extract from the Chinese.  I think we will get a deal, but I am still open to another possibility.  There are 1.3 billion consumers in China that US businesses want to sell their products to.  The CEO’s want a deal, they just don’t want to be forced to have a Chinese joint venture to do business in China.

Technical Analysis:

After some gyrations, the market ended nearly flat for the week.

Technically the chart is in a neutral mode.  RSI at the top sank briefly to oversold before rebounding to end the week in neutral at 47.  Momentum shown by MACD at the bottom of the chart is moving sideways.  The price action is mildly positive, rebounding from the recent 5% correction.

Earnings season is almost over, the Fed is on hold, and the trade talks are stalled.  The economies in Europe and China are sluggish.  The US economy is in good shape currently, but earnings on the S&P are uninspiring.  It’s hard to make a strong bullish case.

2019 05 17

Click THIS LINK to open the chart in a separate window.

What am I doing?  I still hold a lot of cash.  I’ve had some lowball buys hit.  I mentioned last week that I bought some ZM on a pullback at 75; I sold it this week at 86 and put the buy order back in at 74.  ZM is a recent IPO and has not reported earnings so I don’t consider it a long term hold yet.  I had sold a BA May 340 Put, and it expired worthless Friday, and the same with an XOM 70 Put.  I picked up very small starter positions in SPY, not expecting another correction as harsh as last fall.  I have a low ball buy out for AMGN, PE of 13 and dividend of 3.25%, currently oversold on the chart.

If you enjoy these updates, please tell your friends and family who are interested in the stock market about this blog.

Your comments and questions are always appreciated, so feel free to comment using the “Leave a Comment” feature just under the title of the post, or send me an email, my address is on the “About” page at the top of the blog.

You can use the hyperlink below the chart of the S&P that will open a larger picture of the chart in a separate window.  The reader who suggested this wants to look at the chart side-by-side with the blog text so he can look at the chart while reading the text.  To do this in Firefox you can open a “private window” from the browser menu and have two instances of Firefox up, then size each window to about half of your monitor size.  If you bookmark the link to the chart you can look at it each day of the week to see how the market is progressing to certain milestones.  The picture in this post is a static .jpg so it does not update, but if you bookmark the link to the live chart on stockcharts and look at that daily, it does update.

Rich Comeau, Rich Investing

Long Term – May 2019

Once a month, on the Wednesday following the 15th of the month, I will put up a long term view of the market.  This is provided for investors who don’t want to trade secondary swings in the market, but would like to exit the stock market relatively soon after a bear market begins, or enter the market after a new bull market begins (change in the primary trend).  In the blog, they will always have a title called “Long Term (month) (year)”, so you can use your browser “Find” function and easily find them.

Economics:

GDP – First quarter GDP first estimate of +3.2% was released on 3/28.  The inflation number used for Q1 was light compared to Q4, and that accounts for much of the GDP increase quarter over quarter.

Annual GDP growth had been stable for a few years at a 2% annual rate and moved up a bit to 2.6% in 2017 and 2.9% in 2018.  This GDP number supports the assertion that the bull market continues.  

Year Quarter GDP %
2019 Q1 3.2
2018 Year 2.9
2018 Q4 2.2
2018 Q3 3.4
2018 Q2 4.2
2018 Q1 2.0
2017 Year 2.6
2017 Q4 2.9
2017 Q3 3.2
2017 Q2 3.1
2017 Q1 1.2
2016 Year 2.0
2016 Q4 2.1
2016 Q3 3.5
2016 Q2 1.4
2016 Q1 .8

 

Fed interest rates –  The Fed left the Fed Funds Rate at 2.0 – 2.5% in March as expected.  Commentary from the Fed has been dovish and the markets have liked that, helping fuel the stock market rally so far this year.

The Fed has moderated their stance substantially since the last rate hike in December, indicating they will pause the rate hikes and watch the data for a while.  For now, rates still support the long term bull market. 

Date Fed Funds Rate 5 Year Treasury 10 Year Treasury 30 Year Treasury
May 15, 2019 2.4 2.2 2.4 2.8
Apr 17, 2019 2.4 2.4 2.6 3.0
Mar 20, 2019 2.4 2.4 2.6 3.0
Feb 20, 2019 2.4 2.5 2.7 3.0
Jan 16, 2019 2.4 2.6 2.7 3.1
Dec 19, 2018 2.4 2.6 2.8 3.0
Nov 21, 2018 2.1 2.9 3.1 3.3
Oct 17, 2018 2.1 3.0 3.2 3.3
Sep 19, 2018 1.9 3.0 3.1 3.3
Aug 15, 2018 1.9 2.7 2.9 3.0
Jul 18, 2018 1.9 2.8 2.9 3.0
2018 Q2 1.7 2.8 2.9 3.1
2018 Q1 1.5 2.6 2.8 3.1
2017 Q4 1.2 2.1 2.4 2.8
2017 Q3 1.1 1.8 2.3 2.9
2017 Q2 .9 1.8 2.2 2.8
2017 Q1 .7 2.0 2.5 3.1

 

Valuation:

PE on S&P 500 – The current 12 month trailing GAAP PE on the S&P 500 is 21.4, down from 21.8 last month.  I used 4 quarters of earnings with the most recent being Q1 2019 (90% reporting).

This metric is moderately elevated relative to my trimmed 30 year average of 19.

This indicator is supportive of the bull market since the valuation is not extreme.

S&P earnings – For Q1 2019, the blended earnings decline for the S&P 500 is -0.5% which marks the first year-over-year decline in earnings since Q2 2016.  Earnings had been projected to fall -4% y-o-y as of March, so we got a modest positive earnings surprise.  Earnings estimates for Q2 (-1.7%)and Q3 (+.6%) are also poor.  The most often cited factors in the earnings decline are the strong US dollar and higher wages.  The low unemployment rate is leading to many employees being enticed to leave an employer for higher wages, and employers responding by raising wages to retain their staff.

This indicator is neutral to the bull market, but if estimated earnings for 2019 are continually marked down, volatility will continue.

Age of primary move, bull or bear market – The bull market is 10.2 years old, which is a long bull market by historical standards.  In and of itself, this is meaningless.  It does provide some perspective that one should keep in mind.

Geo-Political:

Tension between Saudi Arabia (Sunni center) and Iran (Shiite center) has reached a level that bears watching, centered in the Yemen conflict (noted Dec. 2017).  The US has ratcheted up pressure on Iran, sending a carrier group to the region (May 2019).

Robert Mueller has issued his report and no serious indictments came out after Roger Stone.  The report was made public on 4/18/2019.  This will be kept alive through the 2020 election in my opinion.  If the House decides to impeach, it will put a drag on the stock market.

Trade wars are in effect with China and the EU.  This is causing serious pain to some segments of the economy, notably anyone that uses steel to make their products, and for farmers trying to sell their products to China.  Growth is slowing in both Europe and China.  This is already a small negative for the economy.

Global geo-politics is supportive of the bull market, currently.  The trade issues are less supportive of the bull market than a year ago.

Technical:

May has been a corrective month, primarily on disappointment over the breakdown in China / US trade talks.  S&P earnings are weak, stalled versus last year’s earnings.

Technically, the chart looks rather suspect.  RSI at the top of the chart has come down marginally to 60, high neutral.  Momentum measured by MACD at the bottom of the chart is still trending down on the long term basis.  The price action is declining a bit, but nothing serious, and the price remains solidly in the channel it has been in for years and that is good.

2019 05 15 Long Term

The market’s technical indicators support the thesis that the long term bull market remains in force.

Conclusion:

The stock market remains in a long term bull market technically, and there is nothing in the general economy, in Fed policy, or in the global geo-political realm to overturn that conclusion. 

The earnings projections from Factset for 2019 Q2 and Q3 are negative to low single digit increases vs. the prior year’s respective quarters.  That will limit upside progress in the stock market this year.

 

Long Term Issues to Keep in Mind:

Federal Deficit:  (Negative – Noted Jan. 2018)  It will go up despite the republicans saying that if the tax cut bill is “dynamically scored” using “possible” increases in economic activity, it will hold down the deficit by increasing tax receipts.  This has not been shown to work in the past.  With the Fed no longer buying the US government debt that is currently running at $650 billion per year, and will likely expand to $750 billion per year, who is going to buy that debt, and what interest rate will they demand before committing their capital to that investment?  If that causes interest rates to rise unexpectedly fast and high, that would pose a significant risk to the US economy.

With the ECB ending their QE bond buying by the end of 2018, and probably beginning to raise rates in 2019, this may divert some buyers of US treasury bonds to Euro bonds, and that would put upward pressure on US interest rates (noted June 2018).

The total national debt exceeds $22 Trillion (early 2019), and as interest rates rise, the component of the annual budget allocated to “interest on the debt” will increase, putting pressure on existing programs, or increasing the deficit.  If the deficit is allowed to rise too much in good economic times, the value of the dollar will fall and that is inflationary which is usually bad.

Rich Comeau, Rich Investing

Trade Correction

I update each Saturday with my view of the stock market for the next few weeks (if occupied with family or travel, rarely I am a day or two late, just check back).  The monthly “Long Term” update will be on a Wednesday soon after the 15th of each month, and this supports investors who want to buy and hold, but want to sell to avoid the bulk of a primary bear market, and buy back in for most of the next bull market.  You can always scroll down a few weeks and find the latest “Long Term” update.

If you lose your bookmark to the blog, google “Rich Investing” and it should show up on the first page or so.  The more often you google it and hit the link, the higher it will show in your results.

The monthly Long Term update will be posted on Wed. the 15th.

Economy:

Initial jobless claims fell by 2,000 from a seasonally adjusted 230,000 in the prior week, still on the low end of the historic range.  The consumer price index rose 0.3% in April, the core CPI was only up .1%, and the 12-month rise in inflation was 2%.  It was a light week for statistics, but all of the data was tame.

Geo-Political:

The big news of the week was Trump scolding the Chinese for pulling back on trade commitments and raising the tariff on $200 billion of goods coming in to the US from 10% to 25%.  Trump says that China is paying the tariff, but US business says they pay the tax in the US and pass on what they can to US consumers in higher prices.  Farmers in the Midwest are facing a second summer of weak sales to China, and they are concerned that a market they have worked to develop for 20 years may permanently find a new source in Brazil and not return to purchasing US products.  The stock market did not like it and ended down for the week, but it was a rare down week in 2019 so far.

UBER went public with its IPO on Friday.  The advertised price was $45 per share, but it ended the day down at $41.57  per share.  That’s uninspiring, like the LYFT IPO before it.  What’s going on here?

Over the last 20 years with tax cuts from both Bush and Trump, the top 1% and particularly the top .1%, have gotten much richer much faster than the rest of us, while the middle class has shrunk a little as CEO’s offshored much of our manufacturing to China.  The ultra-wealthy have pooled their money into venture capital (VC) pools and they are sought out by entrepreneurs, both for their funding and management help.  The VC’s can pick and choose from the best startup ideas, get in early, and ride the venture to its IPO when they get their big payback.  What is different today is that 20 years ago, companies needed to IPO soon to get the funding they needed from the public market.  UBER is a ten year old company!  UBER did not need to IPO for funding as it had all the backing it needed from the VC’s.  The VC’s decided, why IPO these startups early and watch the public investors ride the growth phase of the company to big gains?  Let’s keep the company private longer, let us capture the phenomenal rise in value from the rapid growth, and when the growth slows down we’ll IPO the company and get the liquidity to cash out our positions.  The company will be growing much more slowly, the public won’t be rewarded so richly like they were from the Amazon IPO, and us VC’s will keep most of the capital gain for ourselves.  It’s the new model.  There is nothing wrong with it, I just always try to understand how the game is being played.

 And even if Uber were a decent business, which it is not…

Most of the upside is long gone. Early private investors have claimed it all.

For example, former cyclist Lance Armstrong is an early investor in Uber. He invested $100,000 around 2009 when the company was valued at less than $4 million.

Since then Uber has surged 25,000x in value! If Armstrong held onto his whole $100,000 stake, it’d be worth roughly $2.5 billion today.

As I said, the allure of buying a company when it goes public is “getting in on the ground floor.” You buy when a promising company is small and 20x gains (or better) are on the table.

But Uber is already HUGE. As I mentioned, it’s worth $100 billion. It’s already among America’s 100 largest companies.

Uber’s IPO is no ground-floor opportunity. Uber is a giant, overvalued, money-losing enterprise that early investors have already milked dry.

https://www.forbes.com/sites/stephenmcbride1/2019/05/10/investing-in-uber-is-the-dumbest-thing-you-can-do-with-your-money-in-2019/#1e7ac065648a

 

Technical Analysis:

It was a corrective week for the S&P, down 3%.

Technically the chart looks poor, but this correction has been necessary and expected.  I have said the market looked tired as it has labored for a few weeks without much progress.  RSI has fallen to 47 at the top of the chart, which is neutral territory.  Momentum shown by MACD at the bottom of the chart is negative and falling.  Price action is clearly negative.  I added an aqua blue horizontal line over the peak back in October.  It may turn out to be nothing, but we could be looking at a potential “double top” in the market with the peak we just had this month.  Nobody knows yet, but it bears watching.  Double tops are bad and spell a correction.  The longer apart in time that the double top occurs, potentially the larger the correction.  These are seven months apart, and that could mean a big correction lasting a few months.  Or, it could mean nothing if we go on and set more new highs.  We have to wait and see, but I am cautious and I hold plenty cash.  At least you are paid something to wait these days, 2% in the money market.

The poor earnings season is coming to a close.  The trade deal has been pushed farther out.  I see analysis showing that the good 3.2% GDP print for Q1 was helped by an unusually low inflation number used in the calculation, which when corrected could make Q2 look bad, and that could spook the market, but that won’t happen until late July when Q2 GDP gets announced.

Peter (Schiff) said he thinks we just delayed the day of reckoning by a quarter.

I think this time it’s going to be the second quarter that’s going to be a big disaster. I mean, we may even get a negative number in Q2.”

In the first place, we won’t likely get positive contributions from lower trade deficits and inventories. But Peter thinks the biggest problem is going to be the inflation number. According to the government, the annualized rate of inflation was 1.7% in Q4. That was the number they used to deflate the nominal GDP and arrive at the reported number. In Q1, the annualized rate of inflation was just 0.9. That means the nominal GDP number was deflated significantly less in Q1 than in Q4 2018, giving us a higher reported GDP. Had the deflator been the same in Q1 as it was in Q4, GDP would have come in at 2.4%, which would have been pretty close to the consensus.

https://seekingalpha.com/article/4257918-peter-schiff-going-gdp

Schiff is a perma bear since 2005, and I take him with a grain of salt, but he called the 2008 crash and made good money off his book talking about it before it happened.  He’s been wrong much of the last decade, but I like to listen to folks who are not in the consensus and who have knowledge, and Mr. Schiff has some credibility in my book.  The 3.2% GDP number for Q1 appeared to be too high to me when it came out, but I didn’t know what was the matter with it.  This is a plausible explanation and adds to my sense of caution as we move into the summer.

2019 05 10

Click THIS LINK to open the chart in a separate window.

So, what am I doing?  I hold a lot of cash, and I am SLOWLY building positions in “fallen angel” stocks, quality stocks that are being taken down by the correction.  It only costs me $5 to make an online stock trade at Fidelity.  I don’t know where the bottom is during corrections so rather than buying all of a stock that I want (known as a “full position”) in one purchase, I will break it up into 3 or 4 purchases.  If I buy 1/3 and the stock goes up to overbought, I may sell that third.  I didn’t make as much as if I had gone all in, but I was not exposed to large losses if the stock had continued down during the correction.  If the stock goes down significantly and I think it is a quality company I would then add another third to my position and I own a quality company at a lower cost.

I started a position in ZM at $75, a recent IPO that is already making a profit.  I sold an XOM June 70 put, so I will either collect the option premium, or own some XOM shares at 70 next month.  I sold my AMZN into strength a few weeks ago above 1950, now I have my eye on it at 1890 but I am not ready to pull the trigger until I think this correction is over.  It is a good time to be working on your buy list.  I have sold some well out of the money covered calls on positions I own.  They are cheap, I don’t make much, but if you add them all up over a month, it is a decent activity when the market is going down and you want to keep a stock.  I always put the strike price on a covered call at a level where I would be happy to sell the stock.  It limits the option premium, but you generally stand to make a lot more on the stock it it sells.  I have some low ball buy orders out there in case the market takes a real tumble, and I don’t expect them to hit, but occasionally they do.  It does not cost me anything to have the order out there.  You can’t catch a fish if your line is not in the water!

If you enjoy these updates, please tell your friends and family who are interested in the stock market about this blog.

Your comments and questions are always appreciated, so feel free to comment using the “Leave a Comment” feature just under the title of the post, or send me an email, my address is on the “About” page at the top of the blog.

You can use the hyperlink below the chart of the S&P that will open a larger picture of the chart in a separate window.  The reader who suggested this wants to look at the chart side-by-side with the blog text so he can look at the chart while reading the text.  To do this in Firefox you can open a “private window” from the browser menu and have two instances of Firefox up, then size each window to about half of your monitor size.  If you bookmark the link to the chart you can look at it each day of the week to see how the market is progressing to certain milestones.  The picture in this post is a static .jpg so it does not update, but if you bookmark the link to the live chart on stockcharts and look at that daily, it does update.

Rich Comeau, Rich Investing