Art Cashin, Brown & Boockvar On China Deal, January Rule, Powell And Fed Minutes
Art Cashin, Brown & Boockvar On China Deal, January Rule, Powell And Fed Minutes from King World News
Art Cashin, Brown and Boockvar, discuss China deal, January rule, Powell and the Fed Minutes.
Cashin, Brown, Boockvar
January 9 (King World News) – Here is a portion of today’s note from legend Art Cashin:
Questions About Another Seasonal Pattern – My good friend and fellow market veteran, Jim Brown, the chart guru at Option Investor, took a look at one of the so-called January Indicators. Here’s a bit of what he wrote:
The first five days of January are behind us. Under the January five-day rule if the market is higher over that period it will end the year higher. Apparently, it is not much of a rule. Since 1950 the first five days have been positive 44 times and only 36 times did the market close the year higher. For those 36 times the average gain was 13% so we can hope this will be a year where the rule is followed.
Thirteen percent sounds like a lot. However, the S&P is already up 8.5% from the post-Christmas low. Another 5% would put us at 2,700 or 130 points higher than today’s close. Maybe Barclays knows something we do not. They cut their 2019 S&P guidance today from 3,000 to 2,750. Most analysts have started shaving their numbers but that 2,750 puts them close to the low end of the consensus estimates with 3,150 the current highest estimate.
I would rather worry about the rest of January than try to pin the forecast tail on the market donkey for 12 months from now.
The S&P rebounded 25 points to close almost exactly on the 50% retracement level from the December drop. The next resistance level is 2,580 followed by the 10% decline level at 2,637 and the double bottom in November at 2,630. The S&P has rebounded 228 points from the December low and only one day of material decline and that was the Apple warning. We are due for some consolidation soon.
Maybe we’ll take another look next week.
Another Pair Of Eyes – My friend, Peter Boockvar put out a note to clients and friends this morning. Here’s how he opened up: