The U.S. stock markets saw significant volatility over the course of the trading session on Monday, with the major averages bouncing back and forth across the unchanged line. The choppy trading comes ahead of the Federal Reserve’s interest rate decision later this week. After showing a lack of direction in early trading, the major averages showed a strong upward move over the course of the morning. Nonetheless, traders cashed in on the gains in the afternoon, contributing to a significant pullback by the major averages. The major averages regained some […]

BOND YIELDS NEAR 5%… Bond yields reached another nine-month high today. The chart below shows the 10-Year T-Note Yield nearing 5%. Bond yields in excess of that level might make stock investors nervous. One sign that the market is taking notice of rising rates is the fact that rate-sensitive stocks are among the weakest market sectors. That includes financials, retailers, REITs, and utilities. Mr. Bernanke’s pessimistic comment on housing may be contributing to some stock selling. At the same time, a strong report from the service sector is keeping bond […]

The big news last week was that IWM(Russell 2000 ishare etf) is back above resistance and small-caps are showing some leadership. IWM broke above consolidation resistance at 83 on Tuesday and closed above this level the last three days. The move signals a continuation of the Mar-Apr advance and the next upside target is around 88. The March-April advance was roughly eight points and a similar advance from the May low at 80 would extend to around 88. The breakout is bullish until proven otherwise and there are two levels […]

As a stockbroker years ago, I remember telling my clients to “sell in May and go away”. That got me thinking about the current market condition. I imagine that some nervous investors (or short-term traders) may start to do some selling in an anticipation of a possible May pullback. That’s exactly what happened last May. Adding to those concerns is that fact that the market is in a short-term overbought condition. This afternoon while I was writing this post, the market sold off 100 points. I had to smile as […]