John Thomas Financial Chief Market Analyst Still Bullish in Spite of Recent Volatility

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Wayne S. Kaufman, Chief Market Analyst of John Thomas Financial still bullish in spite of recent volatility

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we are concerned about possible weakness as
earnings season winds down, seasonality softens, and investors may become preoccupied with the
upcoming sequester , Wayne Kaufman

Stocks have ended a period of low volatility with two days within the last four sessions showing over 90% of the S&P 1500 declining each day. February 20th, with only 9.07% of stocks advancing, was the worst market breadth day since November 14th. Yesterday’s 3.87% of stocks advancing was the worst breadth since June 21st, when only 3.21% of stocks traded higher on the day.

Our short‐term outlook at John Thomas Financial is that the recent relentless rally is over for the time being and stocks have entered a consolidation period. This is consistent with our comments in The Kaufman Report starting February 4th where we said “we are concerned about possible weakness as earnings season winds down, seasonality softens, and investors may become preoccupied with the upcoming sequester.”

Fourth quarter earnings season is now 90% over, and the catalyst of 69% of the S&P 500 beating estimates is in the rear view mirror. Investors are fretting over the sequester, and in addition the specter of problems in Europe is rearing its ugly head again after a benign period. We will be entering a period of very strong seasonality from February 28th through March 6th. We hope to see renewed enthusiasm on the part of buyers, and not a pattern of selling into strength.

Our longer‐term outlook at John Thomas Financial is still bullish for many reasons. Among these are very positive recent market data, improving economic data (improving too slowly, but improving nonetheless), attractive valuations for equities compared to bonds, and the globally synchronized program of asset purchases by central banks.

For timely insights, news, and commentary on economics and financial markets, visit the JTF Blog or join the John Thomas Financial community on Twitter and Facebook.

About John Thomas Financial:

John Thomas Financial, a member of FINRA and SIPC, is an independent broker-dealer and investment banking firm headquartered in New York City's Wall Street district. Emphasizing a client-centric approach to managing all aspects of its business, John Thomas Financial and its affiliates offer a full complement of retail brokerage, private wealth management, and corporate advisory services tailored to the unique needs of its clients. The firm publishes the Fiscal Liquidity Index, a unique daily indicator that looks at government spending and its impact on the financial markets,The Kaufman Report, a weekly technical stock market analysis, and The John Thomas Financial Economic Outlook, a report analyzing consumer sentiment, market outlook, credit cycles and dozens of other market influences.

Important Disclosures:

The information provided in this publication is for informational purposes only. Investors should consider this report as only a single factor in making their investment decision. This informational report is not an offer to sell or a solicitation to buy any security. This report has been prepared as a matter of general information. It is not intended to be a complete description of any company, and is not an offer to buy or sell any security. All facts and statistics are from sources believed to be reliable, but are not guaranteed as to accuracy. Before acting on the materials herein you should consider whether it is suitable for you particular circumstances and, if necessary seek professional advice investments involve risk and an investor may incur losses. Past performance is no guarantee of future performance. Trading and investment decisions are the sole responsibility of the reader.

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Bari Latterman

Dean Spinato
Power Play International
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