ETF Summary

A new poll shows nearly 3 out of 4 Americans do not believe President Joe Biden should run for reelection, following multiple reports that he will announce his bid for a second term this upcoming week.

According to the survey from NBC News, 70% of Americans, including 51% of Democrats, do not think Biden should run for reelection, with 26% supporting the president.

Almost half of the respondents who voted no cited Biden’s age as their ‘major’ concern with Biden running again – 48% categorized their concern as ‘major’ while 21% said it was a minor concern; 29% of respondents said the issue of his age did not pose a reason in their logic whatsoever.

In February, Biden, 80, admitted that concerns over his age were ‘totally legitimate’ amid growing concerns from both his critics and supporters.

‘No,’ Biden said. ‘But it’s legitimate for people to raise issues about my age. It’s totally legitimate to do that. And the only thing I can say is, watch me.’

On the flip side, 60% of Americans said they do not think former President Donald Trump should run for president in 2024, with only 35% voting yes. The numbers come a few weeks after Trump pleaded not guilty to 34 felony counts of falsifying business records linked to 2016 hush-money payments. About 68% of GOP primary voters agreed with the statement that the investigations into the former president are politically motivated.

When asked which GOP candidate they would vote for if the presidential primary were to be held today, 46% voted for Trump and 31% voted for Republican Florida Gov. Ron DeSantis, who has yet to make an announcement on his own presidential bid but has been going head-to-head with Trump in the polls over recent months.

Former Vice President Mike Pence had 6% of votes, followed by former South Carolina Gov. Nikki Haley and South Carolina Sen. Tim Scott.

Multiple reports out this past week have said Biden and his team are expected to make the announcement via a campaign video on April 25, which will be the four-year anniversary of his 2020 campaign launch.

Speculation swirled for months over whether Biden would run for reelection, with his team only saying he intends on running but not making any other statements in the affirmative. However, Biden recently admitted that an announcement about his potential candidacy would come ‘relatively soon.’

Fox News’ Brandon Gillespie contributed to this report.

Haley Chi-Sing is a Fox News Digital production assistant. You can reach her at @haleychising on Twitter.

This post appeared first on FOX NEWS

Politics

DeSantis takes shot at Trump for Fauci’s role during admin’s coronavirus response

Republican Florida Gov. Ron DeSantis took a swipe at former President Donald Trump over Dr. Anthony Fauci’s role during the COVID-19 pandemic while delivering a keynote speech at a Republican event.

‘A leader must have the confidence to stand all alone if need be,’ DeSantis said at the Utah GOP Convention on Saturday. ‘And so for us, as I got into office, COVID presented that situation for us because we were in a situation – the third-largest state in the country – one of the highest percentage of elderly, economy based on tourism, which we needed to travel to continue.’

‘So, this situation was an existential threat to our state, but I made the judgment. Leaders take the bull by the horns and make the decisions for themselves. They don’t subcontract out their leadership to health bureaucrats like Dr. Fauci,’ he continued.

Fauci, who retired as director of the National Institute of Allergy and Infectious Diseases last year, served as a member of the White House Coronavirus Task Force in the Trump administration, helping craft guidelines for Americans during the pandemic.

Trump and Fauci’s relationship became contentious during the pandemic, with the former president suggesting ahead of the 2020 election that he might fire Fauci. Trump called out the health leader and his colleague, Dr. Deborah Birx, for their ‘bad policy decisions’ in 2021.

‘Based on their interviews, I felt it was time to speak up about Dr. Fauci and Dr. Birx, two self-promoters trying to reinvent history to cover for their bad instincts and faulty recommendations, which I fortunately almost always overturned,’ Trump said in 2021 after Fauci and Birx conducted interviews with CNN for a documentary that year.

‘They had bad policy decisions that would have left our country open to China and others, closed to reopening our economy, and years away from an approved vaccine – putting millions of lives at risk.’

Trump did award Fauci and other members of Operation Warp Speed, which accelerated the development and distribution of the COVID vaccines, with presidential commendations for their work in 2021.

Upon President Joe Biden taking office, Fauci went on to serve as the administration’s chief medical adviser to the president until last year, when he retired.

The governor has previously taken shots at Trump and Fauci for their leadership during the pandemic, saying last month that he would have ‘fired’ Fauci if he had been president.

‘Well, I think there’s a few things,’ DeSantis told journalist Piers Morgan last month when asked about his differences with Trump. ‘The approach to COVID was different. I would have fired somebody like Fauci. I think he got way too big for his britches, and I think he did a lot of damage.’

DeSantis was invited to deliver the keynote speech on Saturday for the Utah Republican Party’s 2023 organizing convention. The Florida governor has not announced an official run for president in 2024, but he is anticipated to throw his hat in the ring, which would tee him up against Trump and a handful of other Republicans for the nomination.

‘Utah is one of the best-governed states in the United States,’ DeSantis told the delegates in his speech. ‘Utah, like Florida, is where freedom works. Maybe Florida is the Utah of the southeast.’

His speech focused on his work in Florida during the pandemic as well as his ongoing fight against Disney as he railed against ‘wokeness.’

‘It’s what I refer to as the ‘woke mind virus.’ We will never surrender to the woke mob. Florida is where woke goes to die,’ DeSantis said.

Though DeSantis has yet to announce a presidential run, various polls show he’s trailing Trump, who has already announced a run for next year’s election. Trump took a shot at DeSantis during an appearance on the ‘Full Send’ podcast that aired last week, describing him as a ‘rocket man that’s crashing.’

‘You have a guy from Florida, Ron DeSantis, who I got in with my endorsement. He was at three points. He was nothing, he was not going to win. He was going to lose, and I endorsed him,’ Trump said on the podcast.

‘He was dead politically. I endorsed him and saved him. He was losing by like 25, 30 points very shortly before the election. When I endorsed him, he went like a rocket ship,’ Trump continued. ‘I should call him rocket man, but now he’s rocket man that’s crashing.’

This post appeared first on FOX NEWS

Politics

Psaki has dessert in ‘hard-hitting interview’ with former boss: ‘Doesn’t ask tough questions either’

U.S. Climate Envoy John Kerry and former White House press secretary Jen Psaki chatted about the dire state of the planet and ‘Forrest Gump’ over ice cream Sunday on Psaki’s new MSNBC show.

Psaki, who served as Kerry’s spokesperson at the State Department during the Obama administration, introduced the segment on ‘Inside with Jen Psaki’ by saying she caught up with Kerry ‘on the National Mall for a wide-ranging discussion and a little dessert.’

The discussion remained very light, with Kerry recalling his mother’s influence on his environmental activism and him praising younger generations for leading the fight on climate change. Immediately after Kerry declared ‘the planet is at risk,’ Psaki suggested an ice cream break. —

‘It sounds kind of highfalutin, probably, to say that, but the planet is at risk. I mean, it is at risk,’ Kerry said.

‘Now,’ Psaki pivoted, ‘I remember well that you have a bit of a sweet tooth. Do you want to go get some ice cream over there?’

‘That would be hitting the nail on the head,’ Kerry responded.

‘Let’s do it,’ Psaki said.

Some jazz music then played in the segment as Psaki and Kerry strolled over to a mall vendor and looked over the menu. They both quickly settled on the $4.50 Dove bar.

‘What do we have here? A Dove bar,’ Psaki said.

‘Dove bar? Oh, Dove, I love Dove,’ Kerry exclaimed. ‘Dove bar – I’ll have a Dove bar. What do you want?’

‘I’ll have a Dove bar, too,’ Psaki replied.

The two then ate their ice cream as they walked along the Lincoln Memorial Reflecting Pool.

‘So I know you like ‘Forrest Gump’ a little bit,’ Psaki said. ‘Does this remind you – you’ve lived a life a little bit like Forrest Gump.’

‘I’ve had some Forrest Gump moments,’ Kerry said. ‘Every time I’m around here I always think of him screaming to Jenny in the pool over here.’

At the end of the brief segment, Kerry and Psaki did a ‘cheers with Dove bars.’

The Republican National Committee mocked the ‘hard-hitting interview’ on Twitter.

Steve Guest, Sen. Cruz’s, R-Texas, special adviser for communications, recirculated a 2014 photo showing Psaki wearing a Russian hat bearing the communist hammer-and-sickle logo while posing with then-Secretary of State Kerry.

Camryn Kinsey, who previously worked in the Trump administration and serves as the spokesperson for Maritime Classic Foundation, took a shot at Psaki, saying she couldn’t answer tough questions as White House press secretary and can’t ask tough questions at MSNBC.

Jessica Chasmar is a digital writer on the politics team for Fox News and Fox Business. Story tips can be sent to Jessica.Chasmar@fox.com.

This post appeared first on FOX NEWS

Politics

VP Harris credits nonexistent federal agency with approving mifepristone: watch

Vice President Kamala Harris mistakenly said last week that a government agency called the ‘Federal Drug Administration’ approved the abortion pill mifepristone 20 years ago.

While the Federal Drug Administration may seem to be the likely breakdown of the acronym for FDA, the correct agency is the Food and Drug Administration (FDA).

Harris sat down for an interview with Noticias Telemundo’s Vanessa Hauc, which aired Friday evening, where the vice president spoke about abortion and the changes taking place in the U.S.

‘Let’s set the scene. Many months ago, the highest court in our land, the United States Supreme Court, took a constitutional right that had been recognized from the people of America – from the women of America – which is the right to make [a] decision about your own body and your own reproductive health,’ Harris said. ‘The government should not be telling that woman what to do with her body. This evokes, in my mind, very fundamental rights, including the right to freedom for each individual about what is in their best interest.’

The vice president then turned her attention to mifepristone, an abortion pill approved by the Food and Drug Administration in 2000.

A case challenging the FDA’s approval of the drug, which was brought on by pro-life doctors and medical groups, challenges not the pill directly but whether the FDA acted appropriately when it approved the drug more than 20 years ago.

‘On the mifepristone issue, it’s politicians finding a court, targeting a specific court that they thought would be helpful to them, to take a medication off the market, which was approved 20 years ago by the Federal Drug Administration,’ Harris said.

She then asked anyone to look into their medical cabinet and look at any drug in there that was prescribed by a doctor.

Harris said any of the drugs prescribed, whether to help with pain or extend a person’s quality of life, was FDA approved.

‘Arguably, what they’re doing with mifepristone could happen to any one of those drugs in your medicine cabinet,’ she said.

On Friday, the same day the interview with Harris aired, the Supreme Court ruled that full access to the abortion pill could continue as the lawsuit works its way through the lower federal courts.

The case reached the Supreme Court after Trump-appointed U.S. District Judge Matthew J. Kacsmaryk issued a ruling that sided with pro-life groups by halting the FDA approval of mifepristone.

Kacsmaryk’s order was partially overturned by the 5th U.S. Circuit of Appears, but the appeals court preserved restrictions that made the drug available only to be dispensed up to seven weeks, not 10, and not by mail.

The Justice Department argued that allowing restrictions on the drug to remain in place would create chaos.

Complicating things, a federal judge in Washington ordered the FDA to preserve access to mifepristone under the current rules in response to a separate lawsuit brought by 17 Democrat-led states and the District of Columbia.

Mifepristone is taken with misoprostol in a two-drug regimen that first blocks hormones needed to keep an unborn baby alive and then causes cramps and contractions to expel the dead fetus from the mother’s womb.

The drug is 97% effective in terminating early pregnancy, though approximately 3% of women who take it will ‘require surgical intervention for ongoing pregnancy, heavy bleeding, incomplete expulsion or other reasons such as patient request,’ according to the manufacturer.

Christ Pandolfo, Adam Sabes, Shannon Bream and Bill Mears of Fox News contributed to this report.

Greg Wehner is a breaking news reporter for Fox News Digital.

This post appeared first on FOX NEWS

Stocks

SMH Bulls are Skating on Thin Ice

“I grew my money tree and so can you!” – Mish Schneider

Heads up, you wouldn’t know it by looking at its daily chart, but the SMH is skating on some very thin ice.

Since the market’s lows in October 2022, the SMH has been one of the recent bull rally’s earliest and most influential supporters, but the same indicators that led its turn up last Fall have turned down this Spring. This is potentially bad news for the uptrend in SMH and the general market trend. While it looks like the SMH is sitting comfortably on its 50-DMA, there are indications it may break, and, if it does, these indicators suggest it won’t come right back.

Looking at the chart below, you’ll see the daily chart of the SMH sitting on its 50-DMA with three indicators below it – MG Leadership, MG Real Motion 50/200, and MG Real Motion 10/50. If you’re familiar with these indicators, the circles and arrows should tell you the whole story.

If you’re new to the MarketGauge indicators…

The simplest form of analysis is that the green circles indicate a bullish change, the red circles indicate a bearish change, and as a result, the price trend should continue in the indicated direction. The easiest way to measure a meaningful continuation or change in the price trend’s direction is a break of the 50- or 200-DMA, as indicated by the arrows.

The summary is that Leadership turned bearish in early April and MG Real Motion, which is a momentum indicator, has been diverging in a bearish way since early March. This divergence became more bearish when SMH made a new high, while RM 10/50 was not able to trade higher than its 50-DMA. This is a big warning sign in Real Motion. As a result, the bearish inflection point is a clear break of the 50-DMA in price.

If the 50-DMA breaks, it’s likely to continue to slide until Real Motion and/or Leadership show a bullish posture.

It is possible for SMH to avoid breaking the 50-DMA and resume its uptrend; if that happens in a reliable way, then Leadership should turn up (blue over red) and RM 10/50 dots should trade over its blue moving average. Until then, SMH is skating on very thin ice.

For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

IT’S NOT TOO LATE! Click here if you’d like a complimentary copy of Mish’s 2023 Market Outlook E-Book in your inbox.

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Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

Mish and Benzinga discuss the current trading ranges and what might break them.

Mish discusses what she’ll be talking about at The Money Show, from April 24-26!

Mish walks you through technical analysis of TSLA and market conditions and presents an action plan on CMC Markets.

Mish presents two stocks to look at in this appearance on Business First AM — one bullish, one bearish.

Mish joins David Keller on the Thursday, May 13 edition of StockCharts TV’s The Final Bar, where she shares her charts of high yield bonds, semiconductors, gold, and regional banks.

Mish joins Wolf Financial for this Twitter Spaces event, where she and others discuss their experiences as former pit traders.

Mish shares her views on natural gas, crude oil and a selection of ETFs in this appearance on CMC Markets.

Mish talks what’s next for the economy on Yahoo! Finance.

Mish joins Bob Lang of Explosive Options for a special webinar on what traders can expect in 2023!

Rosanna Prestia of The RO Show chats with Mish about commodities, macro and markets.

Mish and Charles Payne rip through lots of stock picks in this appearance on Fox Business’ Making Money with Charles Payne.

Coming Up:

April 24-26th: Mish at The Money Show in Las Vegas — two presentations and a book giveaway

April 28th: Live Coaching Complete Trader and TD Ameritrade with Nicole Petallides

May 2nd-5th: StockCharts TV Market Outlook

ETF Summary

S&P 500 (SPY): Tight range to watch this week; 410-415 on a closing basis.Russell 2000 (IWM): 170 support, 180 resistance.Dow (DIA): Over the 23-month MA 336–support to hold.Nasdaq (QQQ): 312 support, over 320 better.Regional banks (KRE): 44 now pivotal resistance.Semiconductors (SMH): 258 resistance with support at 246.Transportation (IYT): Still under the 23-month MA with 232 resistance, 224 support.Biotechnology (IBB): 130 major pivotal area–135 resistance.Retail (XRT): 58-64 trading range to break one way or another.

Geoff Bysshe

MarketGauge.com

President

Stocks

Introducing the Four Horsemen of MELA; Homebuilders Thrive as Commercial Real Estate Implodes

#1 New Release on Options Trading!

The next liquidity crisis will likely be spurred by the woes in commercial real estate (CRE); ironically, a four-headed megatrend which has been accelerated by the Fed’s rate hike cycle.

Introducing the Four Horsemen of MELA:

The Great Migration – population shifts to suburbs, rural areas, and the sunbelt; The CRE implosion from an oversupply of office space;Bullish Supply Dynamics for Homebuilders; andThe Evolving End of Globalization.

This once-in-a-generation confluence of events has created both opportunities for mega-profits.

The MELA Connection

Bull markets (M) increase the value of 401 (k) plans, IRAs, and trading accounts, creating a positive wealth effect which leads to increased consumer spending, and rallies the economy (E) as bullish consumers make important life decisions–buying homes and cars (L). Wealthy consumers induce bankers to make loans, expanding the virtuous cycle.

Banking decisions are influenced by artificial intelligence fueled formulas which factor in a potential borrower’s credit worthiness partially based on the value of stock-based accounts. News travels fast via social media and the news cycle, which are also controlled by algorithms (A). Thus, system-wide moves happen quickly.

Nowhere is this dynamic more evident that in the interplay between CRE and the homebuilder sector. Here is the background:

The 2008 subprime mortgage crisis made homebuilders wary of overbuilding creating secular supply crunch in residential housing;The COVID pandemic spawned the work-from-home megatrend, resulting in glut of commercial office space;The lockdowns prompted a population migration to suburbs, rural areas, and other states;This ongoing migration has made both the office glut in major cities, as well as the home supply crunch in suburbs, rural areas, and states like Texas, Florida, the Carolinas, and others in the sunbelt, practically permanent;Geopolitical changes, spurred by the pandemic and the war in Ukraine have ended the globalization trend, creating an unpredictable future for businesses; andThe Federal Reserve has been raising interest rates to combat inflation, which is due to structural problems in the U.S. economy caused by globalization and its death pangs.

As the system adjusts, the Great Migration is compounding CRE’s problems and resulting in rising joblessness, and a continued limited supply of residential housing. As globalization sputters, this four-headed megatrend and its accompanying structural inflation shows no sign of ending anytime soon.

That means the Fed is odds on to raise rates after its May 2-3 FOMC meeting.

Empty Buildings Don’t Produce Rental Income

The bellwether for CRE’s woes is the ongoing implosion of co-working company WeWork (WE). Built on the principle that wide open work spaces catering to free-lancers and part-time workers would flourish as the gig economy expanded, the company flourished in its early days.

As the dynamic boomed, WE leased large spaces in prominent buildings in large cities, financing its ambitious plans with adjustable debt. When the pandemic struck, everything fell apart, as work-from-home made co-working spaces obsolete. The company is now reeling and may be on the verge of bankruptcy.

As I described here, the amount of cash on WEs, would only cover 14.5% of its debt load. In addition, the New York Stock Exchange has notified the company that its stock will be delisted within six months due to its low price. WE is walking away from leases and facing law suits from land lords.

Refinancing of adjustable debt at higher interest rates, combined with fewer tenants, reduced revenues forcing the company to default on its rent obligations. The price chart needs no explanation.

WE is not alone. For example, even CRE giant Blackstone Group (BX) is having problems, as a Korean investor, Inmark Asset Management, looks to unload $50 million worth of Blackstone’s mortgage debt in fears of a potential default by Blackstone on the debt. See details on this developing story here.

Blackstone, because of its much deeper pockets, is faring better than WeWork. But even though it met its most recent earnings expectations, the shares seem to have run into a brick wall as they reached the $95 area. You can see that’s where a large Volume by Price bar (VBP) is offering what looks to be stout price resistance. If BX shares break below their 200-day moving average, they could move back toward their recent lows.

There is an easy way to protect your portfolio against what may be very nasty breakdown in CRE. You can access this simple tool with a FREE trial to my service. Click here for more information.

Horton Blows Out Earnings Expectations

Shares of homebuilder D.R. Horton (DHI) broke out on 4/20/23 after an earnings beat, even as results were lower than the previous year’s results.

Nevertheless, due to supply being in its favor, DHI is selling houses at higher prices while smartly not overbuilding and focusing on areas of the country with growing populations. Here are some details:

Connecting the dots: The Great Migration to the sunbelt and tight home supplies are keeping DHI in the money. Sales and revenues have slowed thanks due to higher interest rates. Moreover, the lack of apartment sales suggests that the CRE situation is getting worse, as real estate investment trusts have no money to spend and are not investing in new properties. This will most likely result in a continuation of the current state of supply and demand in affordable housing.

To view my homebuilder picks and how I’m trading the commercial real estate market, click here. I own shares in DHI.

Bonds and Mortgages Rise Slightly. Expect Panic Buyers to Materialize

D.R. Horton’s Q2 earnings illustrate two simple principles: 1) Low housing supply is bullish for homebuilders, and 2) When mortgage rates fall, potential buyers come into the market. Moreover, when rates dip for a short period and then start to rise, on-the-fence buyers jump in as they fear missing out. We’re about to see more of that.

The Fed’s warnings about another rate hike in May have pushed the U.S. Ten Year Note (TNX) above the 3.5% yield area. This resulted in a rise of the 30-year mortgage to 6.4%.

The long-term connection between TNX, mortgage rates and the homebuilder sector (SPHB) is well established. For an in-depth comprehensive outlook on the homebuilder sector, click here.

Breadth Rolls Over. Nasdaq 100 Barely Holds 13,000

The trading range in the major indexes continues, but the market’s breadth had a bad week as the New York Stock Exchange Advance Decline line (NYAD) rolled over. NYAD still closed above its 20- and 50-day moving averages, but it did show some weakness.

The S&P 500 (SPX) remained above 4100. 4200 is still an a key resistance level. On Balance Volume (OBV) and Accumulation Distribution (ADI) remained constructive.

The Nasdaq 100 Index (NDX) barely held above 13,000, which has becomes fairly reliable support. This remains bullish, as it suggests money is now pouring into technology stocks. When tech stocks rally, the give the whole market a boost. Accumulation Distribution (ADI) and On Balance Volume (OBV) are very bullish for NDX.

The CBOE Volatility Index (VIX) broke to a new low and is now well below 20, a sign that the bears are throwing in the towel. This is also bullish.

When VIX rises, stocks tend to fall, as rising put volume is a sign that market makers are selling stock index futures in order to hedge their put sales to the public. A fall in VIX is bullish, as it means less put option buying, and it eventually leads to call buying, which causes market makers to hedge by buying stock index futures. This raises the odds of higher stock prices.

The market’s liquidity retreated as the Eurodollar Index (XED) closed slightly below 94.75 on Fed hike expectations. A move above 95 will be a bullish development for sure. Usually, a stable or rising XED is very bullish for stocks. On the other hand, in the current environment, it’s more of a sign that fear is rising and investors are raising cash.

To get the latest up-to-date information on options trading, check out Options Trading for Dummies, now in its 4th Edition—Get Your Copy Now! Now also available in Audible audiobook format!

Good news! I’ve made my NYAD-Complexity – Chaos chart (featured on my YD5 videos) and a few other favorites public. You can find them here.

Joe Duarte

In The Money Options

Joe Duarte is a former money manager, an active trader, and a widely recognized independent stock market analyst since 1987. He is author of eight investment books, including the best-selling Trading Options for Dummies, rated a TOP Options Book for 2018 by Benzinga.com and now in its third edition, plus The Everything Investing in Your 20s and 30s Book and six other trading books.

The Everything Investing in Your 20s and 30s Book is available at Amazon and Barnes and Noble. It has also been recommended as a Washington Post Color of Money Book of the Month.

To receive Joe’s exclusive stock, option and ETF recommendations, in your mailbox every week visit https://joeduarteinthemoneyoptions.com/secure/order_email.asp.

Stocks

Is The Bear Market Over? Watch The VIX

The normal relationship between the Volatility Index ($VIX) and the S&P 500 is an inverse one. The easiest way to illustrate this is to pull up a chart showing both and their correlation coefficient:

The red arrows mark bottoms in the S&P 500 and they generally coincide almost perfectly with tops in the Volatility Index. In the bottom panel, the correlation coefficient tells us whether the SPX and VIX are moving in the same direction (positive correlation) or in the opposite direction (inverse or negative correlation). The latter is highlighted by the blue-shaded area. It should be fairly obvious that the VIX and SPX almost always move in opposite directions.

To fully understand the VIX, you need to have a basic understanding of stock options and how they work and are priced. Options are contracts that give option buyers the right to buy or sell a stock at a predetermined price (strike price) on or before a specified day (expiration day). The pricing of options is dependent on a number of factors, but two of the most important are the volatility of the individual stock and the time remaining on the contract.

The value of the VIX is based on the “expected volatility” of the S&P 500 over the next month. As I pointed out in the chart above, the VIX typically goes up when the S&P 500 goes down (inverse correlation, remember the blue-shaded area). That tells us that expected volatility will be higher during market downtrends. And, because the VIX is based upon expected volatility over the next month, the lower the VIX goes, the more bullish the signal for the S&P 500. The biggest moves higher in the S&P 500 have historically occurred when the VIX is dropping and extended bull markets are associated with historically-low VIX readings.

When I look at sentiment, I only like two signals. One is the VIX, because it looks at how market makers are pricing S&P options, which provides us a clue as to what market makers are expecting over the next month. The second is the equity-only put-call ratio ($CPCE), because it provides us a feel for the psyche of the retail trader. The latter is the best contrarian indicator in the stock market, in my opinion. Its predictive abilities are astounding. But let’s stick with the VIX here for this article.

Bear markets require a number of things, but one significant need is fear. The more fear we have, the more volatile the stock market is, and the higher the VIX. That’s how it works. That’s why we see VIX readings in the 30s, 40s, and 50s at or near the bottom of bear markets. In 2008, during the height of the financial crisis, the VIX spiked to 90! At the other end of the spectrum, however, are bull markets that see the VIX tumble all the way back to single digits.

So where are we now? Well, here’s what history tells us. When the VIX drops below 16-17, we are OUT of the current bear market and we should expect higher prices. The bottom’s already been made and the falling VIX confirms the worst is behind us. Let’s look at charts to see what I mean:

2020 Pandemic

Bear market ended in March 2020. VIX later reached below 16-17 level in June 2021. Confirmation.

2018 Trade War

Do you see the rallies in November and December 2019? Note that they occurred after the VIX bottomed in the 16s. The February 2019 drop in the VIX below 16 confirmed a bottom was in.

2007-2009 Financial Crisis

This was not your normal bear market. First, it was the deepest bear market in nearly 8 decades, with the S&P 500 falling nearly 60%. There were “echoes” of fear for quite some time as the VIX remained elevated above 16 for an extended period. But once the VIX fell below 16, the depths of the bear market had already been reached.

2000-2002 Dot Com Bubble

1998 Global Financial Crisis

The late-1990s was one of the craziest market runs in stock market history. It’s also the only secular bull market period characterized by VIX readings consistently above 16. The best secular bull market in history (1980s-1990s) saw “irrational exuberance” at the end that led to the start of the 2000-2012 secular bear market.

1990 Persian Gulf War

This was a short-lived cyclical bear market that ended almost as quickly as it began.

So where are we now? What should we expect moving forward?

2022 Return of Inflation

Are we at the start of the secular bull market resumption – the one that began in 2013? Or has this rally set us up for more selling and a lower bottom ahead in a secular bear market?

Two great questions where most market participants have been firmly planted on one side or the other. Personally, I was looking for a cyclical bear market when 2022 began. I looked for a 2022 bottom and then an ensuing rally to all-time highs. So far, so good. Nothing has changed my view. Money has rotated feverishly in 2023 to “risk on” areas of the stock market:

The stock market is rising and being led by aggressive sectors. This is truly a sign of sustainability, in my view, and based on my many years of research.

Oh, and I’d LOVE to argue valuation right now with anyone. In fact, my EB Digest article tomorrow morning will reveal why I believe current market valuations are WAAAAY low and we’re poised for a massive rally over the next decade. If you’d like to read this article and are not already an EB Digest subscriber, CLICK HERE to enter your name and email address. It’s completely free and you may unsubscribe at any time.

Happy trading!

Tom

Business

TikTok-inspired thefts prompt 17 states to urge recall of Kia, Hyundai vehicles

Attorneys general in 17 states on Thursday urged the federal government to recall millions of Kia and Hyundai cars because they are too easy to steal, a response to a sharp increase in thefts fueled by a viral social media challenge.

Some Kia and Hyundai cars sold in the United States over the last decade do not have engine immobilizers, a standard feature on most cars that prevents the engine from starting unless the key is present.

Videos circulating on the social media service TikTok have shown how people can start Kia and Hyundai models by using only a screwdriver and a USB cable. In Los Angeles, thefts of Hyundai and Kia cars increased by about 85% in 2022, now accounting for 20% of all car thefts in the city, according to the California attorney general’s office.

These social media-inspired thefts have often ended in tragedy, with the National Highway Traffic Safety Administration blaming the stolen car trend for 14 reported crashes and eight deaths. In October, a police commissioner said that a car crash in Buffalo, New York, that left four teenagers dead may have been linked to the TikTok challenge. In the incident, a total of six teenagers were in a speeding Kia that crashed, Buffalo police said. The car had been reported stolen.

Hyundai also said its vehicles comply with federal anti-theft requirements. The company says it rolled out the software upgrade to prevent the thefts two months ahead of schedule, but it did not answer a question about how many vehicles have received it. “We are communicating with NHTSA on our many actions to assist our customers,” the company statement said.

The letter adds to the growing pressure on the South Korea-based automakers. Multiple cities, including St. Louis, Cleveland, Milwaukee, San Diego, Seattle and Columbus, Ohio, have already sued the automakers.

In September, the Highway Loss Data Institute, a unit of the Insurance Institute for Highway Safety, found that Hyundai and Kia cars without immobilizers had a vehicle theft claim rate of 2.18 per 1,000 insured vehicle years. The rest of the industry combined had a rate of 1.21.

Hyundai and Kia announced in February that they would provide software updates for vehicles that require the key to be in the ignition switch to turn the car on. The change also updates the cars’ theft alarm software to extend the length of an alarm from 30 seconds to 1 minute. About 3.8 million Hyundai cars and 4.5 million Kia cars are eligible for the software update.

But the service campaign by the affiliated Korean automakers is not a recall, which comes with reporting requirements and is monitored closely by NHTSA.

The agency said the Hyundai and Kia thefts involve criminal conduct that falls under the jurisdiction of law enforcement. Even so, NHTSA said it has met with the automakers to discuss theft vulnerability as well as software and hardware in the affected models.

The agency said it is getting regular updates on the companies’ plans. “NHTSA will continue to monitor this issue, spread awareness of further updates to local authorities and lend its expertise in efforts to strengthen motor vehicle safety,” the agency said.

But Michael Brooks, executive director of the nonprofit Center for Auto Safety, said there is no way for the public to track the effectiveness of a company’s internal service campaign. In a recall, NHTSA requires quarterly reports and monitors whether the recall repairs solve the problem, he said. The agency also requires automakers to notify each owner by mail.

“We won’t know how many are on the road with the problem” with a company service campaign, Brooks said. “We’re not going to know if the recall is effective, if notification went out properly.”

Brooks said NHTSA has been slow to react to auto thefts, even though the stolen Hyundais and Kias are causing safety problems on the roads.

Hyundai has said all models produced after Nov. 1, 2021, have immobilizers as standard equipment.

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Business

California jury finds Tesla Autopilot did not fail in crash case

A California state court jury on Friday handed Tesla a sweeping win, finding that the car maker’s Autopilot feature did not fail to perform safely in what appears to be the first trial related to a crash involving the partially automated driving software.

The verdict could be an important victory for Tesla as it tests and rolls out its Autopilot and more advanced “Full Self-Driving (FSD)” system, which Chief Executive Elon Musk has touted as crucial to his company’s future, but which has drawn regulatory and legal scrutiny.

Justine Hsu, a resident of Los Angeles, sued the electric-vehicle maker in 2020, saying her Tesla Model S swerved into a curb while it was on Autopilot and then an airbag was deployed “so violently it fractured Plaintiff’s jaw, knocked out teeth, and caused nerve damage to her face.”

She alleged there were defects in the design of Autopilot and the airbag, and sought more than $3 million in damages for the alleged defects and other claims.

Tesla denied liability for the 2019 accident. It said in a court filing that Hsu used Autopilot on city streets, despite Tesla’s user manual warning against doing so.

During a court hearing in Los Angeles Superior Court on Friday, the jury awarded Hsu zero damages. It also found that the airbag did not fail to perform safely, and that Tesla did not intentionally fail to disclose facts to her.

Hsu broke down in tears outside the courtroom after the jury delivered its verdict.

One of Hsu’s attorneys, Donald Slavik, said they are disappointed in the result and appreciate the jury’s service. Tesla attorney Michael Carey declined to comment.

Tesla calls its driver-assistant systems Autopilot or Full Self-Driving, but says the features do not make the cars autonomous, and that human drivers should be “prepared to take over at any moment.”

The EV maker introduced its Autopilot in 2015, and the first fatal accident in the United States was reported in 2016, but the case never went to trial.

Critical time for Tesla

The Hsu trial, which has not been reported by other media, unfolded in Los Angeles Superior Court over the last three weeks, and featured testimony from three Tesla engineers.

It came at a critical time for the company as it braces for a spate of other trials starting this year related to the semi-automated driving system, which Musk has claimed is safer than human drivers.

While the trial’s outcome is not legally binding in other cases, it is considered a test case because it would serve as a bellwether to help Tesla and other plaintiffs’ lawyers hone their strategies, experts say.

Cassandra Burke Robertson, a professor at the Case Western Reserve University School of Law who has studied self-driving car liability, said early cases “give an indication of how later cases are likely to go.”

Tesla is also under investigation by the U.S. Justice Department and the National Highway Traffic Safety Administration over its claims about self-driving capabilities and the safety of the technology, respectively.

The main question in Autopilot cases was who is responsible for an accident while a car was in driver-assistant Autopilot mode — a human driver, the machine, or both? Hsu’s lawsuit alleged that the Tesla vehicle hit the curb so suddenly that she had no time to avoid it even though she had her hands on the steering wheel and was alert.

Reuters was first to report that a 2016 video used by Tesla to promote its self-driving technology was actually staged, to show capabilities — such as stopping at a red light and accelerating at a green light — that the system did not have, according to testimony by a senior engineer.

The details about the video were from a deposition of a Tesla executive in another case.

That executive, Ashok Elluswamy, director of Autopilot software at Tesla, testified during the Hsu trial last week about the videotape.

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Sports

How do NFL draft analysts prepare for final stretch?

Chasing ghosts might feel like a futile task. For Daniel Jeremiah to be best prepared as NFL Network’s lead draft analyst, it’s essential.

Jeremiah said that with roughly two weeks before the draft, the level of studying a prospect is not as intense compared to the weeks before the combine in March. At this point, he’s doing his best last-minute work to be prepared for three days of broadcasting from Kansas City.

“You’re just pulling guys out of the pile,” Jeremiah told USA TODAY Sports. “I kind of joked that it’s like the scene from ‘Gladiator.’ This is not a full scouting report. It’s a thumbs up or thumbs down operation, whether or not these guys are draftable or not draftable types of players.

“You’re kind of drinking through a firehose.”

Todd McShay, ESPN’s senior NFL Draft analyst alongside Mel Kiper Jr., said that by April, most of the work is done.

NFL Draft Hub: Latest NFL Draft mock drafts, news, live picks, grades and analysis

“At this point, to be quite honest, it’s a lot less stressful because ‘the hay is in the barn,’ as they say,” McShay wrote in an email to USA TODAY Sports.

Information rules all

For McShay, each draft evaluation process begins in May by watching game film on the following year’s potential draft class. In the fall, he is a sideline reporter for various crews while maintaining his emphasis on the draft.

“It allows me to view the players live from the field level, as well as spend time with coaches and players, which is invaluable for my draft prep,” McShay wrote.

From the end of the college season until the last week in March – when he’s not attending the Senior Bowl, combine or handful of pro days – he’s concocting mock drafts, appearing on television and studying tape while writing up evaluations for more than 400 prospects that will compose his draft book. The tome, usually published around April 1, is distributed to ESPN/ABC on-air talent, producers and executives to help fuel broadcasts, and the evaluations populate ESPN.com’s draft tracker.

After the book goes to print, McShay has two primary responsibilities. One is the various media obligations that come with his occupation. The other is talking to friends in the NFL – ‘most of whom I’ve come to trust over the years” – to exchange information “about character concerns and durability issues that they might have more information on.”

Teams will hold their medical and character meetings during the final full week ahead of the draft, Jeremiah said. He will also canvas teams to see if there is anyone he should be aware of for dropping for either of those reasons.

“I never use any of that information publicly,” said Jeremiah, who was a scout for the Baltimore Ravens (2005-06), Cleveland Browns (2007-08) and Philadelphia Eagles (2010-12). “But if a guy’s expected to be a top 15 pick, and here we are in the middle of the second round and he’s still available, you say ‘Hey, there’s something that came up’ one way or another.”

Kiper won’t file another mock draft until the morning of the draft. Jeremiah’s final mock is due that Tuesday. That will lead to another exchange of information, but Jeremiah typically stays true to his final mock.

“You make a last-minute change, and it’s maybe more likely to hurt you than to help you in some instances,” Jeremiah said. “A lot of times I’ll get stuff the morning of the draft, like Thursday morning, and that sometimes tends to be a little more concrete when you talk to the information guys.

“Which I’ve always wondered, why everybody doesn’t have the information guys do the mock draft, because it is (all about) who you’re talking to and what you’re learning.”

And that, inherently, is Kiper’s issue with mock drafts.

“I’m more always interested in rankings of players, ratings of players, than mock drafts,” Kiper, a part of ESPN’s draft coverage since 1984, said.

“To try to build a consensus is almost impossible. So mock drafts are very, very difficult. I like ratings better.”

Along those lines, the experts are sure to cross-check their rankings with one another and their league sources to make sure they did not whiff on a player. If multiple people tell McShay similar things, he’ll go back to the tape. If another analyst has one prospect way higher than Jeremiah does, he’ll also go watch more to “make sure I just didn’t wake up in a bad mood when I graded this guy.”

This happens less than five times per year, Jeremiah said.

“Just to make sure I’m not taking crazy pills on a player,” he said.

Kiper shifts his focus to ratings and will put together a top-300 board, building on his already-published top 100, and will continue to fine-tune them until the draft.

“I’ll keep updating that, getting some of the sleeper guys in there, the guys you were waiting for a pro day, you liked them during the year,” Kiper said.

From evaluating to broadcasting

McShay used to book a hotel in Bristol, Connecticut – home of ESPN’s headquarters – for the entire month of April and stay six days a week. He’s made four trips to Bristol since the season ended and he’ll go twice more before leaving for Kansas City on April 25.

“Now that we’re doing the majority of shows via remote, I’m able to be home and see my young kids a lot more, which is a huge bonus,” McShay wrote.

“I know my TV schedule/radio/podcast/interview schedule for the rest of the month, so now I get to have fun with Kiper and hopefully use the last 11 months of prep to help inform and entertain (and I’m sure aggravate at times) our audiences.”

Like McShay, Jeremiah tries to watch 400 prospects. As draft day approaches, he prepares to inform viewers who know nothing the player their favorite team picked. That’s the first part.

“But then to add the team component, to know the team well enough to say ‘This is why they took this player and here’s how they’re going to use this player,’” Jeremiah said.

Every year, Jeremiah said, a player that is selected earlier than he predicted. Jeremiah won’t trash him on the biggest day of his life. He couches it by saying “they covet what he does really well.”

“I think that’s kind of what the job is,” he said.

Follow Chris Bumbaca on Twitter @BOOMbaca.

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