Tuesday, October 21, 2014 09:29am
North Adams, MA now: 46 °   
Send news, tips, press releases and questions to info@iBerkshires.com
The Berkshires online guide to events, news and Berkshire County community information.
SIGN IN | REGISTER NOW   

Home About Archives RSS Feed
@theMarket: The Faint of Heart
By Bill Schmick On: 03:26PM / Monday March 31, 2014
Important
0
Interesting
0
Funny
0
Awesome
0
Infuriating
0
Ridiculous
0

It has been at best a bumpy ride for stocks this week. While events in Crimea are partially responsible, there are some underlying factors just below the surface that may have more to do with recent performance than would meet the eye.

Breadth, the number of advancing stocks versus decliners, is one variable that seems to be flashing amber to red. Most market analysts take a faltering breadth ratio as an early warning signal. Then there’s momentum. Momentum is positive when existing trends in the markets continue or accelerate. Recently, that has changed.

Take the biotech sector for example. For most of the year this sector was a darling that at its peak was up over 20 percent. Investors, believing that the area offered enormous growth based on technological innovation, (like stem cells) and new health care initiatives couldn't get enough of these stocks. This week the sector hit a brick wall. Some stocks on Monday and Tuesday were down 10-15 percent with little warnings.

Other high flyers in the technology space were also clobbered. NASDAQ, which outperformed the Dow and the S&P 500 Indexes for most of the year, also experienced a fairly steep down draft. When momentum stocks and sectors begin to falter, I pay attention.

The initial public offering (IPO) market is also an indicator that bears watching. The calendar for new offerings has been red hot. Companies are falling over themselves to go public with 10 new issues this week alone. In the recent past, these IPOs have all opened higher than their initial offering price and then went straight up from there. This week's favorite, a digital entertainment company, was crushed on its first day out of the box; not a good sign.

The phone has been ringing off the hook all week. It appears my last column on the markets triggered some concern. I wrote that the mid-term election cycle could usher in a period of turmoil and possibly a 10 percent or more decline in the stock market. Given my bullish stance on the stock market for well over a year, my forecast upset several readers.

Let me be clear. I am still bullish on the stock market over the intermediate and long-term. I just see some digestion problems between now and the end of the summer. Any paper losses readers may suffer during that time period will be regained by the end of the year. Occasional pullbacks like the one I am expecting is a necessary and expected condition of investing in the stock market. As I have said before, if you can't stomach these occasional declines, you do not belong in the stock market.

The exact timing on when and how long such a possible sell-off would occur is problematic. Some pundits are arguing it has already begun. I doubt it. We will probably rally again up to the recent highs or even beyond before stalling out again. We may well have another month or so before the markets truly roll over so there is plenty of time to adjust your portfolios in the event you want to take some defensive action.

Bill Schmick is registered as an investment adviser representative with Berkshire Money Management. Bill’s forecasts and opinions are purely his own. None of the information presented here should be construed as an endorsement of BMM or a solicitation to become a client of BMM. Direct inquires to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com.



0 Comments
     
News Headlines
Colegrove Park School Project Toured
Pittsfield School, City Officials Prepping For Big Decisions
BArT Students Get Lesson in Chocolate, Child Labor
MBTA Rail Cars to Be Built in Springfield
Trick-or-Treat Hours for Halloween 2014
Hunting Permits Available for Hopkins Forest
BerkshireWorks Plans Events in Honor of Veterans
Adams Civic Club Seeking Broader Membership
Cariddi Hosting Information Forum on Ballot Questions
Lanesborough Committees to Discuss School Funding
Bill Schmick is registered as an investment advisor representative and portfolio manager with Berkshire Money Management (BMM), managing over $200 million for investors in the Berkshires. Bill’s forecasts and opinions are purely his own and do not necessarily represent the views of BMM. None of his commentary is or should be considered investment advice. Anyone seeking individualized investment advice should contact a qualified investment adviser. None of the information presented in this article is intended to be and should not be construed as an endorsement of BMM or a solicitation to become a client of BMM. The reader should not assume that any strategies, or specific investments discussed are employed, bought, sold or held by BMM. Direct your inquiries to Bill at 1-888-232-6072 (toll free) or email him at Bill@afewdollarsmore.com Visit www.afewdollarsmore.com for more of Bill’s insights.

 

 

 



Categories:
@theMarket (147)
Independent Investor (199)
Archives:
October 2014 (4)
October 2013 (2)
September 2014 (5)
August 2014 (7)
July 2014 (2)
June 2014 (6)
May 2014 (9)
April 2014 (8)
March 2014 (6)
February 2014 (6)
January 2014 (7)
December 2013 (8)
November 2013 (7)
Tags:
Jobs Energy Stocks Bailout Recession Pullback Deficit Commodities Stock Market Federal Reserve Election Europe Greece Interest Rates Fiscal Cliff Markets Congress Stimulus Fed Euro Economy Rally Europe Selloff Debt Ceiling Banks Currency Metals Housing Oil Debt Crisis Japan Taxes Retirement
Popular Entries:
The Independent Investor: Understanding the Foreclosure Scandal
The Independent Investor: Don't Fight the Fed
The Independent Investor: Does Cash Mean Currencies?
@theMarket: QE II Supports the Markets
@theMarket: Markets Are Going Higher
The Independent Investor: General Motors — Back to the Future
The Independent Investor: How Will Wall Street II Play on Main Street?
The Independent Investor: Will the Municipal Bond Massacre Continue?
@theMarket: Economy Sputters, Stocks Stutter
The Independent Investor: Why Are Interest Rates Rising?
Recent Entries:
@theMarket: Are We There Yet?
The Independent Investor: Why Is This Recovery Different?
@theMarket: October Starts Off on High Note
The Independent Investor: Money & Divorce — What You Should Know
@theMarket: Wash, Rinse and Repeat
The Independent Investor: Is Wall Street Responsible for Climate Change?
@theMarket: Waiting on the Fed
The Independent Investor: The United States of Scotland?
The Independent Investor: Europe Follows the U.S. lead
@theMarket: What's Up With Bonds?


View All
Football: Franklin Tech vs...
McCann Tech holds on for the win Saturday afternoon. McCann...
Colegrove Park Elementary...
Mayor Richard Alcombright and the City Council were updated...
Boys and Girls Cross Country
Berkshire Chamber Greylock
Boys and Girls Cross Country
The Lenox boys and girls teams both cleaned up on Senior...
Volleyball: St. Joe s vs...
Taconic takes 3 from St. Joseph Tuesday night.
Ramblefest 2014
Adams residents enjoyed entertainment, food, and locally...
Girls Soccer: Hoosac Valley...
The Wahconah girls soccer team on Monday advanced to an...
Berkshire County Classic Golf
Francois Benistand, an exchange student from the south of...
Indashio Fashion Show
Fashion designer Indashio holds his second FAME Festival in...
Football: Pittsfield vs...
Senior quarterback Nick Clayton marched his team 80 yards...
Football: Lee vs Drury
FINAL: Lee Wildcats beat Drury 24 -14.
Football: Taconic vs Hoosac...
FINAL: Hoosac Valley 51-14 over Taconic.
Soccer: Mount Greylock vs...
Eric Hirsch scored twice, and Taylor Carlough played strong...
Girls Soccer: Wahconah vs...
The Mount Greylock girls soccer team is still in search of...
Boys and Girls Cross Country
Hoosac Valley's Travis Ciempa and Mount Greylock's Margo...
Football: Franklin Tech vs...
McCann Tech holds on for the win Saturday afternoon. McCann...
Colegrove Park Elementary...
Mayor Richard Alcombright and the City Council were updated...
Boys and Girls Cross Country
Berkshire Chamber Greylock
Boys and Girls Cross Country
The Lenox boys and girls teams both cleaned up on Senior...
| Home | A & E | Business | Community News | Dining | Real Estate | Schools | Sports & Outdoors | Berkshires Weather | Weddings
Advertise | Recommend This Page | Help Contact Us | Privacy Policy| User Agreement
iBerkshires.com is owned and operated by: Boxcar Media 102 Main Street, North Adams, MA 01247 -- T. 413-663-3384 F.413-664-4251
© 2000 Boxcar Media LLC - All rights reserved