Don Hays on Yahoo! Finance

Today, Don Hays discusses the recent movements in the price of gold with Matt Nesto of Yahoo! Finance's Breakout blog.  You can watch the full discussion by clicking on the image below.

If you are a subscriber to HaysAdvisory.com, click here to read our recent reports.  If you would like to learn more about the research and commentary offered by Hays Advisory, click here.

Please see important disclosures at the bottom of this page.

Don Hays on Yahoo! Finance

Today Don Hays joins Matt Nesto of Yahoo! Finance's Breakout blog to discuss that despite new highs in the market, individual investors are still skeptical.  Click on the image below to watch the full segment.

If you are a subscriber to HaysAdvisory.com, click here to read our recent reports.  If you would like to learn more about the research and commentary offered by Hays Advisory, click here.

Please see important disclosures at the bottom of this page.

Stock Market in Very Overbought Territory According to 21-Day Oscillator

The higher high in the S&P 500 has been much later than most indices, but you can't dismiss the message that is being sent.  Since 2008 the Federal Reserve has been trying to light the fuse, to get the fire started, but the intense skepticism - fear - and the damage resolution from the housing crisis have served to dampen the flames.  The stock market is now telling us that the flames are starting to catch on.

However, we now have a very overbought stock market.  As of yesterday's close, the 21-Day Oscillator (orange line) moved up just above 100, which you can see in the chart below. 

The first temptation is to say, "Oh, the market's too hot, so I will wait on weakness."  Yet, looking at the historical forward returns for the stock market when the 21-Day Oscillator moved above 100 (going back to 1978) suggests that while your odds of success might be lower in the near term, they get much better as you look out a year.  (If your are a subscriber to HaysAdvisory.com, log in by clicking here to get the full study in today's report titled "The Fuse is Lit!".)

This is just one example of why we think the last four years of this bull market have only produced a bull market that is still in its infancy.  The Fed has not even started to normalize monetary liquidity yet, and with today's news showing prices are still very tepid and economic growth is sub-par, the Fed may still continue to prime this pump a lot longer than expected.

Don Hays

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Margin Debt Update

Okay...so we still have our Psychology Composite rating of P4.  That is not terrible, but if you remember, the P5 of February suggested the market was not headed in a good direction in the short-term.  However, now we have a new high in the stock market almost every day.  The very positive Monetary Composite and the extremely positive Valuation Composite keeps us strongly in the bullish camp for the long-term, but we still have that P5 of February in our peripheral vision.

About a year ago, we were screaming about how bullish the annual increase in margin debt was, since it had previously dropped into a net liquidation of margin debt that had historically generated massive bull markets in its wake.  However, that has changed.  We now see that margin debt has increased from that very somber time of a year ago by 28%.  We don't consider this ultra-ominous, but you can see that in "some" cases (like 2004 when the Fed was about to start raising interest rates) it did presage a correction.

...so we're still watching those new highs, but when you think about it, the signs are saying it is not a good time to be chasing new stocks.  Our discipline says to wait on a better juncture, so that's what we're doing.

Don Hays

If you are a subscriber to HaysAdvisory.com, click here to read our recent reports.  If you would like to learn more about the research and commentary offered by Hays Advisory, click here.

Please see important disclosures at the bottom of this page.

Global Markets Update: Monday, May 13, 2013

The US was up 1.2% last week, while the World x US was up only 0.6%.  US stocks are now up over twice as much as international stocks this year.

Some of the other highlights from around the world include:

• Japan continues to lead the G7 countries, up almost 20% this year.
• Looking towards Emerging Markets, India continues to lead the BRICs, as the only country in positive territory for the year, up 2.6%.
• Small Caps were up nicely last week here in the US, moving them more to the middle of the pack for the year.
• Healthcare continues to lead the US sectors, up over 20% this year; however, Utilities fell in the rankings last week, as they were down 2.7%.

Keith Hays & Justin Wood

If you are a subscriber to HaysAdvisory.com, click here to read our recent reports.  If you would like to learn more about the research and commentary offered by Hays Advisory, click here.

Please see important disclosures at the bottom of this page.