Now that the SPX flirted with the combination of the 2700 level and its lower Bollinger Band (BB), it's time to see if the market is ready to bottom on a short-term and intermediate basis. Let`s analyze outlook from the perspective of breadth, momentum, and sentiment. Breadth and momentum The readings from...
Mid-week market update: In light of the recent market turmoil, I thought I would publish my mid-week market update early. The Shanghai Index moved into bear market territory by declining 20% on a peak-to-trough basis overnight. The SPX is testing its 50 day moving average (dma). Europe is struggling as both the FTSE 100 and...
A recent Axios story featured an interesting political perspective on Trump's possible strategy for the midterm elections: An odd paradox in defining this moment in politics: The more President Trump does, says and tweets outrageous things, the more his critics go bananas and the better he does in the polls. Indeed, Gallup's tracking poll of presidential...
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...
This is one in an occasional series of articles highlighting the hidden investing factor exposures, starting with small cap stocks. Small caps have been on an absolute tear lately, both on an absolute basis and relative to large caps. Does that mean you should jump on the small cap momentum train? Momentum is...
Mid-week market update: The fate of this market is becoming highly news dependent. Ed Yardeni recently stated in on CNBC that he has never seen a "president this bullish and bearish at the same time". The market wants to go up on earnings, but it has been held back by Trump`s protectionism. Will stock prices...
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...
The last time I published a post in a series of "things you don't see at market bottoms" based on US based investor enthusiasm was in January. That's because market exuberance had significantly moderated since the January top. Guess, what, the giddiness is baack! As a reminder, it is said that while bottoms are events,...
Mid-week market update: Since early May, it has been evident that the bulls have regained control of the tape (see The bulls are back in town). Not much can faze this market. Even today's hawkish Fed rate hike left the market down only -0.4% on the day. The question for investors then becomes how far...
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...
Mid-week market update: Sell in May? June swoon? Not so far! As the SPX convincingly staged an upside breakout above the 2740 resistance level, the bull case is easy to make. We have seen fresh all-time highs this week from the following: NASDAQ Composite Russell 2000 small caps NYSE Advance-Decline Line NASDAQ Advance-Decline Line I...
Do you really want to be a contrarian investor? Most of the time, being contrarian means that your investment views are far from the crowd, and you will feel very isolated and uncomfortable. With that preface in mind, I offer two uncomfortable contrarian trades, based purely on technical analysis. Fading a NAFTA breakdown Let’s...
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...
Mid-week market update: Callum Thomas conducts a regular weekly (unscientific) Twitter poll of equity market sentiment, and the latest results show that both fundamental and technical bullishness are falling. These readings suggest that bullish momentum is waning. Indeed, daily MACD has been decelerating and turned negative this week, indicating that the bears are taking...
Brett Steenberger recently warned that traders about trading on noise, which is advice to which I wholeheartedly agree: In other words, before we can determine whether or not we have an edge (in systematic or discretionary trading), we need to establish knowledge. A theory explains how and why something occurs. Testing of historical data can...
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...
Was the recent big tax cut not enough? CNBC reported that President Trump is proposing further tax cuts before November. He went on to pressure Congress to enact funding for his budget priorities on Twitter. These actions prompted Steve Collender (aka @thebudgetguy) to declare in a Forbes article that Trump May Be The...
Mid-week market update: There remains a fair amount of stock market skittishness among my readers and on my social media feed. Let me assure everyone that bear markets simply don`t start this way. SentimenTrader has an intermediate to long-term sentiment model called AIM "which averages the momentum of the four major sentiment surveys". This model...
Back in March, I wrote about the new Fragile Five, which were five highly leveraged developed market economies that were undergoing property booms. The five countries are Australia, Canada, New Zealand, Norway, and Sweden. As a reminder of how insane property prices are in Vancouver, which is one of the epicenters of the real estate boom,...
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...
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