Strong Technical Trend in Stock Likely to Continue

The weekend just got away from me once again so I apologize for my tardiness in publishing this week’s letter. Instead of writing another diatribe on why I think the economy remains strong I thought it might be more instructive to share a link to a video about how strong the technical trend in stocks are.

The video is from Chris Ciovacco on You Tube. He is completely unbiased and always focuses on the probabilities of what could happen. He keeps it very simple but the message in this week’s video is particularly poingiant. This is one of my resources that help me keep a pulse on the probably direction of the trend in stocks. Enjoy!

https://www.youtube.com/watch?v=TbUQMbv9Xa8&t=2s

Respectfully,

Mark Bern, CFA

Comments

Why I Still Like Certain Stocks

By Mark Bern, CFA The latest Durable Goods Orders report from the Commerce Department shows a spike of 4.5% in August, but that was primarily driven by an increase in orders for aircraft. When transportation is stripped out orders improved only 0.1%. Of course, trucks are also putting in a strong showing but autos are actually in decline. The takeaway is that Boeing (BA) remains a strong hold in our model portfolio (rated as a buy for new investors) as orders for new aircraft and the backlog of orders continue to pile up making the next several years look like we should see record sales and profits. The only thing that could dent the current trend would be for China to cancel orders. But that is unlikely because the main competitor, Airbus (AIR.PA) is behind in fulfilling orders and cannot keep up because of delays by it engine suppliers. It has fewer orders and is producing fewer airplanes and yet is falling behind on its production commit...

Is This The Bear Awakening?

By Mark Bern, CFA · The Dow falls 832 points in one day! · Plausible reasons why the market dropped. · Positives still outweigh the negatives. · Stick with quality and look for good buying opportunities. Short answer: Probably not. I know it feels horrible when we read the headlines like: “Market Falls 832 Points!!!” But let’s try to put that into perspective. Yes, it is a big point drop and more of a percentage drop, at 3.15%, in one day than we have had for some time. But it comes after the market has had a very strong run off of an intra-day low of 23,360 on February 9 th to a recent high of 29,951, or 15.37%. The Dow Jones Industrial Average Index (^DJI) had posted a respectable year-to-date gain of 8.5% before this latest down draft and remain about 3.56% ahead...

Household Debt in the US

By Mark Bern, CFA When we look at charts like the one below it is easy to become nervous about the implications. However, that isn’t the whole story. The economy has grown since 2007 and household have borrowed at much lower interest rates. The St Louis Fed has a chart that look more encouraging. As you can see, household debt compared to GDP (gross domestic product) is much lower. And then, if we drill down some more, we can see that when we measure average interest payments by households relative to income the picture looks even better. So, when you read that next story warning about how debt levels are now above levels in 2007 and trying to spread fear and anxiety of a repeat recession that is imminent, just pull up these charts again, take a deep breath, and relax. It isn’t nearly as bad as it was then. The same can be said about corporate debt. Sure, corporations hold more debt today than in 2007, but the interest r...

Bern Factor. Weekly Letters

Search This Blog