Top Advisors Corner

November 2016

Top Advisors Corner

Tom McClellan: Peculiar Move by Dollar and Small Caps

by Tom McClellan

The two big stories since the Nov. 8 presidential election have been a surge higher for the US dollar, and a big outperformance by small cap stocks.  The two can be seen in this week’s chart, although understanding what is happening takes a little bit of explanation. The upper plot is the US Dollar Index, a combination of multiple currencies exchange rates versus the dollar.  It is perhaps not a perfect representation of the overall value of the dollar, but it is the most commonly used one.  The lower plot is a relative strength ratio for the Russell Read More 

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Mary Ellen McGonagle: Pre-Thanksgiving is the New Black Friday Which is Now the New Cyber Monday - (And Lasts a Whole Week). And What About Super Saturday?

by Mary Ellen McGonagle

Struggling retailers are scrambling to find new ways to get their discounted merchandise in front of consumers. With the holiday season accounting for 20-40% of annual sales, the need to get it right is critical.  Last year was tough for many of these companies as weak holiday sales caused a selloff that was the beginning of a nine-month downtrend. Many retailers have cleaned things up since then with more streamlined inventory and targeted advertising.  The recently strong Q3 earnings season in this sector shows this and we’ve seen a turnaround in many retailers Read More 

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Gene Inger: The Inger Letter- November 23. 2016

by Gene Inger

Harvesting gains - on a short-term basis approaches, but isn't quite at that point yet; as I've indicated higher prices every day with pullbacks in context of the uptrend consistently projected (since the Election) to hit S&P 2200 or higher, before Thanksgiving. This week I called for minor dips getting nowhere and always higher as it evolved. The optimism we expressed both before and after the Vote at the same time we allowed for pullbacks, has been rewarded with what's been a rotational advance that we called based on 'Fun in America'; as we believed not much changed with regard to Read More 

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Tom McClellan: Copper Spike

by Tom McClellan

 Investors worldwide have suddenly caught a whiff of inflation, and have overreacted in response.  That overreaction can be seen quite well in the big spike higher in copper prices, a rally which is now starting to be dismantled. One fascinating aspect to that rally is that it came out of a big symmetrical triangle structure.  Symmetrical triangles carry that name because the slopes of the upper and lower boundary lines are roughly equivalent.  Such triangles are indecision structures, and most often resolve with a resumption of the trend direction which preceded the Read More 

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Mary Ellen McGonagle: Who Says Yield Stocks Are Out of Favor?

by Mary Ellen McGonagle

The biggest winners over the last week have offered abundant yields as well as high returns. It’s been an exciting time to be in the markets over the last week or so.  After 3 months of sideways angst, the markets have sprung into action as investors have been jolted by the reality of a having new sheriff in town next year. The one party sweep in the elections brings fiscal and regulatory change that is being widely celebrated as many stocks have catapulted to impressive gains. Not all groups have participated equally however as high yielding and more defensive Consumer Staples and Read More 

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Tom McClellan: The Market, Under a New President

by Tom McClellan

 Investors get fearful ahead of a big election, because the outcome is unknown.  Unknown risks are what investors fear most.  Now that the result is decided, we have known risks to deal with.  Investors were also fearful ahead of the 2012 election, which also had a surprising (for some) result.  Recall that Gov. Romney had been up by 1-4% in the last polls leading up to that election.  Polling that year was admittedly disrupted by the arrival of Hurricane Sandy, which also shut down the stock market for 2 days.  And interestingly Read More 

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Gene Inger: The Inger Letter November 11, 2016

by Gene Inger

Financial transmission - is creating velocity all over the place now. It's a totally bifurcated market; with the much-touted pundit FANG stocks of course really getting clocked (they were hiding places to hold Averages up in the long-running distribution); while long-downtrodden Industrials have sprung to life. Most of this is happening beyond the optimism you all know we'd suspected in-event of a Trump victory; and it's primarily because money is and will be flowing-in like mad. Couldn't know how it would unfold; but sniffed-that the media (part of the establishment) was not correct in Read More 

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Tom McClellan: My Final 2016 Poll Analysis

by Tom McClellan

Since the 2000 election, I have been tracking how the presidential election poll numbers follow in the footsteps of the stock market, with the key insight that we can gauge how the popular vote is likely to turn out based on how the stock market was moving the week before the election.  It is on that basis that I am now predicting that a Trump victory is likely next week.   Understand that this prediction is only for the popular vote, which is what the poll numbers can model.  The math of electoral college totals is a whole separate question, and not Read More 

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Alan Newman: Crosscurrents - November 3, 2016

by Alan Newman

Healthcare Cost Dilemma The most recent numbers show healthcare costs have climbed to 17.5% of our GDP, better than one dollar of every six.  By the way, Happy Halloween—the snapshot at center is quite frightening.  While this picture represents only unsubsidized health insurance premiums, the math surrounding health care costs in an aging society is truly scary.  Consider that over the last year, the medical component for the CPI is up 4.8%.  The National Health Expenditure (NHW) fact sheet (see http://go.cms.gov/1O1cWhR) claims “For 2015-25, health spending is Read More 

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Gene Inger: The Inger Letter November 3, 2016

by Gene Inger

Defensive stances across the Board - remain appropriate for investor portfolio structures, as tough as that is for the impatient eager to get into the game anew and given year-end strategies often contemplated about this time of year. Our multi-month historic, unprecedented uncertainties confronting markets, persist; as that matters. (Holding a home-run Dec. S&P short-sale guideline from 2167 without a stop, makes this point.) Regardless of politics there's unfinished business on the downside, with respect to both equity and credit markets; not to mention volatility in Oil and Dollar Read More