The Sabrient Blog

Since the market ditched its typical Monday mania today, maybe we can escape the inevitable depression that has followed in its wake.

For five consecutive weeks, the market has started with an up-day only to tank for the rest of the week. Some have blamed the Monday upsurge on weekend manipulation of the futures market.  If that’s the case, it didn’t work today. Overall, the S&P 500 has fallen from a high of 1150 on 1/19 to a low last week of 1044, losing approximately -9% from its high five weeks ago.

In contrast, I would expect this week to be a rather quiet one, as upcoming economic releases are somewhat muted.  Only the trade balance on Tuesday, retail sales and weekly jobless claims on Thursday, and consumer sentiment on Friday are thought of as potential market movers. Read more…

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Forget that the market was down for the fourth consecutive week on Friday.  Investors woke up in a new world today and sent the market soaring.   It is Monday, after all.

After last week’s manic Monday, the market ended the week down big-time, with Large-cap Value the best performer at – 1.5% and Small-cap Growth the worst at -2.7%.   There has been a lot of good and bad economic data the last several days, which may account for investors’ fickle mood.  On Friday, existing home sales and new home sales were down much more than expected (existing: 5.45M vs. 5.90 and new:  342K vs. 370K); initial jobless claims were down (470K vs. the expected 440K); and durable goods orders were much  worse than expected (0.3%  vs. a general consensus of 1.6%).  On the other hand, consumer confidence was up significantly at 55.9. Read more…

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Perhaps it was the new senator from Massachusetts who let the bears out, but I suppose it was a bit more than that. When the week began on Tuesday, after the Martin Luther King holiday, the bulls were grazing happily on GARP stocks, as contented as California cows.  But then somebody opened that gate, and the bears roared through and the bulls ran for cover.

It wasn’t exactly a massacre, but it was far from pretty. Consider that the best style/cap, Small-cap Value, was down 4.3% and the worst, Large-cap Value, was down 5.2%.  Obviously, all style/caps were ravaged, and the week’s carnage wiped out everything we had accomplished since Santa Claus came in December. Read more…

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Several comments to this week’s article on SeekingAlpha  (“What the Market Wants:  A Week of Murk and Fog”) have prompted me to make a few points of clarification.

First, regarding the controversy over my comment about “cash on the sidelines,” Sabrient uses a proprietary formula to track this very thing,  with a combination of mutual fund cash, money market cash (cash that is frequently in the market instead of in money market funds), cash available from pension and endowment funds, short interest in the aggregate, and estimates of foreign funds available for domestic markets.   We use this information internally, but not in any significant way since we normally are agnostic to short-term (less than one year) market direction.  It is my personal opinion that there is a larger than normal amount of such cash on the sidelines at this point in time, and in my article was commenting that such cash was probably responsible for inexplicable bullish reactions to bearish news days. Read more…

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Last week brought us murk and fog in an otherwise bright New Year. All style/caps were down for the week, though not drastically. The worst was Small-cap Growth (- 1.12%); the best was Large-cap Growth (-0.6%); and the rest crowded between these uninspiring returns. But given the tremendous amount of cash on the sidelines, the market seems unlikely to turn disastrous.

It could have been worse. Alcoa (NYSE: AA), Monsanto (NYSE:  MON) and Chevron (NYSE: CVX) disappointed badly early in the week, although Intel (Nasdaq: INTC) brought in pleasing numbers later in the week. Government statistics were for the most part dismal — worse-than-expected numbers for trade balance (-36.4 B), initial job claims (+11,000 to 444,000) and retail sales (-0.3%). Even consumer sentiment was poor (flat, actually, at 72.8 vs. December’s final 72.5), probably a reflection of the other disappointing statistics. Only the consumer price index (CPI) was encouraging, increasing just 0.1% in December, after a 0.4% rise in November. Although Europe is beginning to struggle with inflation, the U.S. isn’t having that problem yet. Read more…

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Stocks came strongly out of the gate last Monday to kick off the 2010 Wall Street race. And indeed the market advanced throughout the week, albeit fitfully, with the S&P 500 starting the week at 1114 and closing at 1144. So let’s recap last week’s market data for some insight on where we should be looking to invest now.

Large-cap Value took the early lead and was up 3.8 % for the week. The worst cap/style was, interestingly, Large-cap Growth, which was still up 1.8% for the week. Value did better than growth in each of the caps, primarily because of the Financial Sector’s continued rally. Part of the blame for the lagging growth stocks is due to sporadic but realistic talk about valuations of large-cap techs, such as Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG). There was also concern, though not as noisy, about valuations in various Materials and Energy stocks. Read more…

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As we close out a tumultuous year that took us from the depths of fear about the future of capitalism as we know it, to the heights of optimism, we enter 2010 with a cautious but hopeful view that the next shoe to drop—whatever it might be—will not lead to another maelstrom.

From teetering at the edge of the abyss in March, brave investors rode a classic V-bottom recovery straight through year-end. And our list of 15 Top Stocks for 2009 (13 main picks plus 2 bonus picks) performed extremely well, chalking up a robust 41% gain for the year, including one speculative pick that was up 170% (T-3 Energy Services, ticker TTES).

Although many are predicting renewed turmoil during 2010 from distress in commercial & residential mortgages, others believe that the Federal government’s willingness to intervene with whatever it takes to save the banking industry has given investors the confidence to put money back into private and public equity. Read more…

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For the second year, we are publishing our “Baker’s Dozen” Top Stocks for the coming year, selected by our powerful FSYS system.

Here are five stocks from the 2010 report:  JRCC, JOYG, CACC, HUM, STEC.

To see the other 8 picks, plus 5 speculative bonus picks, enter your email address here.

The full report will be available on Friday, January 8.

2009 Performance
The 2009 Top Stocks gained  +41.3% percent. (One of the speculative stocks, TTES, gained +170% for the year!)   There’s a link to the detailed 2009 performance on the above sign-up page.

Read more…

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It seems that we needed only to take a week off to get this market going.  Our last issue was barely published when the market broke through the 1100 heavy resistance it had faced for nearly two months.  The S&P 500 closed today (Monday) at 1133, up a solid 3% since two weeks ago.  Small-cap Growth led the cap/styles this past week, up +1.66% while Large-cap Value was the worst at +0.32%.

The news fueling the market, while not sensational, has been steadily positive.  My favorite was the ISM last week, a full point above consensus at 55.9 and 2.5 points above its previous reading.  Consumer confidence, while just meeting expectations at 52.9 last week, was well above the previous reading of 49.5.  Best of all, I suppose, was last week’s initial jobless claims of 432,000, which was the lowest level in some time and well below the expected 460,000 and the previous reading of 452,000.  PMI was also positive while construction spending and retail sales were just okay.  No real disappointments here. Read more…

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Last week the market (S&P 500) battled resistance at the 1100 mark as if it were in the yawning sand trap at #14 on Pebble Beach – and Tiger Woods can’t help us out just now.

This battle against resistance has been going on since October 14. Since that date, except for a little dip around Thanksgiving, the S&P 500 has closed each day near the 1100 mark. The high during that period was 1119, but we ended Friday at 1102 and the week before that at 1106. This morning we reached 1117, but ended the day at 1114.

The market’s lack of direction mirrors the news. Last week, the Empire State Manufacturing Survey fell 21 points, to 2.6, after four months of improvement, but the Philly Fed Index, announced on Thursday, increased from 16.7 in November to 20.4 this month; this index has remained positive for five consecutive months. Read more…

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