A capitulation bottom?

In Free by Cam Hui

Mid-week market update: In my weekend post (see Buy the dip!), I wrote that despite my tactical bullishness, “traders need to allow for a brief rally, followed by a sharp drop to a washout low before this shallow correction is over”. We are finally seeing signs of an oversold market and a short-term capitulation. There were a number of signs …

Buy the dip!

In Free by Cam Hui

Preface: Explaining our market timing models We maintain several market timing models, each with differing time horizons. The “Ultimate Market Timing Model” is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The Trend Model is an asset …

The miracle of Europe

In Free by Cam Hui

Here in Canada, we are observing the 100 year commemoration of the participation of Canadian troops in the Battle of Vimy Ridge. While the Canadian Corp achieved its objectives of capturing the ridge, it was a typical battle of the First World War that left enormous casualties for both sides.     After the horrific human carnage of the First …

Is the gold/platinum ratio flashing a buy signal for stocks?

In Free by Cam Hui

Mark Hulbert recently highlighted an equity buy signal from an obscure indicator, the gold/platinum ratio. The signal is based on a research paper by Darien Huang, an academic at Cornell.     The rationale behind the indicator goes something like this. Both gold and platinum are precious metals, which have defensive characteristics during equity bear markets. But platinum has more …

How a China crash might unfold

In Free by Cam Hui

As Donald Trump prepares to meet Xi Jingping this week, I am reminded of the long-term challenges that face China, namely its growing debt. There have been many analysts warning of the credit buildup, here is this chart from BCA Research is one of many examples.     While I am not calling for an imminent crash in China, here …

Monetary Armageddon ahead?

In Free by Cam Hui

Preface: Explaining our market timing models We maintain several market timing models, each with differing time horizons. The “Ultimate Market Timing Model” is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The Trend Model is an asset …

Is the correction over?

In Free by Cam Hui

Mid-week market update: On Monday, the major market averages successfully tested their 50 day moving averages (dma) and bounced. Does this mean that the correction is over? Not so fast. There are several indications that the market still has unresolved business on the downside for Monday’s test to be a durable bottom. First of all the SPX remains in a short-term …

A passive index fund built to outperform?

In Free by Cam Hui

A long time reader sent me this Seeking Alpha article entitled “Monish Pabrai Has Created An Index Fund Built To Outperform”, which described a “passive index fund” built using the following three investment themes deployed in three portfolio buckets: Share buybacks: Companies that are buying back their own shares Selected value manager holdings: The holdings of 22 selected value managers, …

Could “animal spirits” rescue the Trump rally?

In Free by Cam Hui

Preface: Explaining our market timing models We maintain several market timing models, each with differing time horizons. The “Ultimate Market Timing Model” is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The Trend Model is an asset …

Three bottom spotting techniques for traders

In Free by Cam Hui

Mid-week market update: Regular readers will know that I have been tactically cautious on the market for several weeks, but can the blogosphere please stop now with details of how many days it has been without a 1% decline?     The market fell -1.2% on Tuesday with no obvious catalyst. Despite today’s weak rally attempt, Urban Carmel pointed out …

China’s revival and what it means

In Free by Cam Hui

I was reviewing RRG charts on the weekend (click here for a primer on RRG charting) using different dimensions to slice and dice the market. When I analyzed the regional and country leadership, I was surprised to see that the dominant leadership were all China related (note that these ETFs are all denominated in USD, which accounts for currency effects). …

Rate hikes ≠ The Apocalypse

In Free by Cam Hui

Preface: Explaining our market timing models We maintain several market timing models, each with differing time horizons. The “Ultimate Market Timing Model” is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The Trend Model is an asset …

Sell St. Patrick’s Day?

In Free by Cam Hui

I hope that you are enjoying the stock market rally this week. My inner trader covered his short positions last week and stepped aside to await a better short re-entry point. St. Patrick’s Day may be it. Ryan Detrick pointed out that St. Patrick’s Day is one of the most positive days of the year, though as of the time of …

3 steps and a stumble: The bull and bear cases

In Free by Cam Hui

Mid-week market update: It was no surprise that the Fed raised rates, as they had spent the last month widely telegraphing their intentions. This morning’s release of February CPI tells the story. Headline CPI is near a 5-year high. Though core CPI (ex-food and energy) edged down, the latest reading of 2.2% is above the Fed’s 2% targeted inflation rate. …

To BAT or not to BAT? Trump’s tax reform dilemma

In Free by Cam Hui

As the market awaits the FOMC decision and statement this week, there are a number of other critical market moving events to watch for. The Trump White House is expected to release its “skinny budget” this week, which may contain some broad outlines of the tax reform package. In addition, Angela Merkel’s White House visit Tuesday could bring important news …

A toppy market, but not THE TOP

In Free by Cam Hui

Preface: Explaining our market timing models We maintain several market timing models, each with differing time horizons. The “Ultimate Market Timing Model” is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The Trend Model is an asset …

A sentimental warning for bulls and bears

In Free by Cam Hui

Mid-week market update: Recently, there have been numerous data points indicating excessive bullishness from different segments of the market: Retail investors are all-in Institutional investor bullish sentiment is off the charts Cash is at a two-decade low in global investor portfolios RIA sentiment are at bullish extremes Hedge funds are in a crowded long in equities These giddy sentiment readings …

A track record update

In Free by Cam Hui

I have had a number of subscribers ask me to extend the chart of my longer term calls, which had only gone back two years. The chart below shows the highlights of my posts back to 2013, which are intended for investors with a 6-24 month time horizon. I haven’t been always right. On occasion, I was early, late, or …

Why I am cautious on the market

In Free by Cam Hui

Preface: Explaining our market timing models We maintain several market timing models, each with differing time horizons. The “Ultimate Market Timing Model” is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade. The Trend Model is an asset …

A frothy, over-extended stock market

In Free by Cam Hui

I just wanted to follow up to yesterday’s post (see Don’t relax yet, the week isn’t over). One of the key developments that I had been watching has been the recent hawkish evolution in Fedspeak. Last night, uber-dove Lael Brainard gave an extraordinarily hawkish speech. She started with the following remarks: The economy appears to be at a transition. We …