2.16.14: Weekend Linkfest: SP 500 nears Mid-January All-Time-High of 1,850

There are zillions of opinions issued on the stock and bond markets each week, and many voices crying-out to be heard. The reason we do the Weekend Linkfest is to simply sift through all the week’s noise and pick out the research or opinions that I think have merit and then re-read the articles, tweets, blogs, etc. to then be shared with readers and clients. This is a completely selfish endeavor on my part: it forces me to read (and re-read) those opinions I think have merit and analytical rigor, which helps drive my market thinking for the coming week, month, quarter and year, and then share those same views with those who are kind enough to subscribe to the blog.

Here we go:

  • Have to lead off the week with this piece from Josh Brown. The quantity and quality of Josh’s work is truly remarkable. (@ReformedBroker). Day in, day out, I find Josh’s work of remarkable breadth and depth in terms of the rigor of his analysis. By the time this weekend’s Linkfest is done, you will probably see at least one – two more Josh Brown links. I know at least one I want to re-read on emerging markets. It is an excellent piece;
  • An equally thoughtful piece each week from Jeff Miller at A Dash of Insight. As this piece does, Jeff links to other bloggers every week, which can vastly expand an individual investor’s research and market evaluation ability. Jeff has a very good track record of debunking popular Wall Street myth’s that gain traction across Wall Street with alarming regularity, such as the 2011 Recession call by ECRI. Pundits think that the 20% correction that occurred in 2011, was a result of the US debt downgrade by S&P. I think the market was discounting the ECRI recession which never really materialized, and which Jeff Miller debunked early on;
  • Gold (GLD) and SLV (SLV) appear to be setting up for a bounce if not more, per JC Parets, found on Ryan Detrick’s Twitter link;
  • Ryan Detrick (@ryandetrick) with a table on why this near-term SP 500 strength is bullish;
  • Bob Brinker (@BobBrinker) has done a good job keeping his Twitter followers current on the Puerto Rico muni bond mess. Here is a link to Bob’s twitter feed on Puerto Rico’s current economic conditions. My question is, how much is discounted in current prices and is there opportunity for real political and economic reform in PR ? We are out of our muni CEF ETF’s given the Treasury rally.
  • Here is a GLD chart, don’t know the technician, but StockTwits is a credible forum; It was Keith McCullough of HedgEye Trader and now David Rosenberg that stated this week that the Fed needs to start worrying about inflation NOW.
  • A JC Parets, AllStar Charts (@allstarcharts) chart on the under-performance of the Energy Sector.
  • Looking at this chart from Soberlook on NAR pending home sales and this chart by Soberlook on Retail Sales. With all the technicians suddenly bullish about GLD, and GLD being a flight-to-safety asset the last 4 – 5 years, I wonder if we are facing period of more economic weakness than previously thought.
  • So many disparate signals and mixed messages today. SP 500 near AT highs, Treasuries well bid, Gold and Silver looking to break out, the big consumer tells like housing and retail looking weak, the dollar looking like it is bottoming – wow. I’m really confused as to what to make of all the changing correlations. SP 500 earnings still decent though.
  • Our big earnings reports this week are Coca-Cola (KO) Tuesday morning before the bell, Wal-Mart Thursday morning before the bell and Hewlett-Packard (HPQ), Thursday afternoon after the bell.
  • Quick stat on KO: The stock peaked at $44.47 in early August, 1998, just before the LongTerm Capital Management Crisis. Since that time, excluding the dividend, KO is down 15%, while the SP 500 is up 70% – a DRAMATIC underperformance, for what is likely the world’s most iconic brand. Hopefully the GMCR deal indicates management is re-thinking the business. Hope for a  pulse at KO. (long KO)
  • AcrossTheCurve (@acrossthecurve) on the weather and early February retail sales data per BAML. We watch this Twitter feed for good info on corporate credit spreads. (long BAC);
  • Almost forgot Josh Brown’s “emerging markets” piece. This is worth a re-read. I think it might still be a little early on EM. Giving them more time.

We’ll end the Weekend Linkfest with a nice one-page summary from Schaeffer’s Investment Research out of Cincinnati, home of Ryan Detrick and a few other quality data-miners and technicians, writ-large. Schaeffer’s is still bullish: always a good sign. They have been making the right short and long-term market calls for a while.

That is about it for me for the weekend. Thanks for visiting the site. There are a lot of places competing for your eyeballs. We appreciate your time.

I think this is a critical week and the SP 500 and Treasury action will go a long way about telling us what the rest of the year might look like.

Trinity Asset Management, Inc. by:

Brian Gilmartin, CFA

Portfolio manager




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