John Thomas Financials Chief Market Analyst Wayne S. Kaufman Weekly Report

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Chief Market Analyst Wayne S. Kaufman Weekly Report from the John Thomas Financial Blog.

John Thomas Financials Chief Market Analyst Wayne S. Kaufman has published his Weekly Report.

Stocks rallied again last week as the S&P 500 ran its weekly winning streak to three and it has recorded gains in ten of the last eleven weeks. Major indexes were led higher on the week by the Dow Jones Transports, up 2.10%, and the S&P Smallcap 600, up 1.13%. The only major index down on the week was the Nasdaq 100, which was down 0.17%. The S&P 500 was up 0.60% for the week and is up 9.43% so far in 2013.

Industry groups were mostly positive as nineteen of the twenty-four S&P industry groups traded higher last week. Automobiles & Components led the way with a gain of 2.76%, followed by Banks, up 2.54%, and Transportation, up 1.87%. Transportation remains the leading industry group on the year with a gain of 14.99%, closely followed by Diversified Financials, up 14.92%.

In our last report dated March 4th John Thomas Financial said stocks were not overbought, investors were positioned defensively, and our proprietary options indicator was showing pessimism at 0.91, a level John Thomas Financial advisors said is usually seen at bottoms, not tops. In the two weeks since then the Dow Industrials rallied to new all-time highs, and the S&P 500 rallied 3.2% and is not far from its all-time closing high of 1565.15 set on 10/9/2007, and its all-time intraday high of 1576.09 set on 10/11/2007. The short-term picture has changed as stocks are now overbought and John Thomas Financial are seeing optimism on the part of options buyers, sending our proprietary options indicator to 1.09, the highest level since 12/24. Then it was coming down from 1.22, an extreme number r hit on 12/18/2012, which was a short-term market peak. Therefore, a short-term pullback can occur at any time and investors need to be careful with entry points.

The S&P 500 trading just under its 2007 highs has brought out a lot of bears calling for an important top here. John Thomas Financial doesn't' agree, and we offer some comparisons with the top in October 2007. At the 2007 top the 10-year bond yield was 4.66% versus today’s 1.996%. The forward P/E ratio, based on projected earnings, was 16.9, versus today’s 14.51. This equates to a spread between the equity yield and the bond yield of 245%, versus a spread of 27% in 2007. This is why Alan Greenspan said on TV last week that stocks were “significantly undervalued.”

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I, Wayne S. Kaufman, hereby certify that all of the views expressed in this research report accurately reflect my personal views about any and all of the subject issuer(s) or securities. I also certify that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.

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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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