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 a cautionary tale about the importance of return objectives and risk control. Regular readers know that while my trading model has not be perfect, it has been quite good for swing trading purposes. So far in the month of October, my main trading account is up 7.1%, while the SPY is -7.1%....
Mid-week market update: I am publishing my mid-week market update early in light of the recent market volatility. I use the Relative Rotation Graphs, or RRG charts, as the primary tool for the analysis of sector and style leadership. As an explanation, RRG charts are a way of depicting the changes in leadership in different...
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: Is there any more "pop" after last week's drop? The market certainly had a big rally yesterday, and it is not unusual to see a pause the day after a big move. Here are the bull and bear cases. Bull case Option based sentiment is supportive of further advances....
I received a ton of comments after yesterday's post (see A correction, or the start of a bear market?), probably because of the tumultuous nature of last week's market action. Readers pointed out a number of buy and sell signals that I had missed in yesterday's post and asked me to comment on them. (Rather...
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 June. Sufficient signs have emerged again for another edition. As a reminder, it is said that while bottoms are events, but tops are processes. Translated, markets bottom out when...
Mid-week market update: Is the correction over? At least my inner trader had been positioned for market weakness. Subscribers who had been following my inner trader, you know that we issued real-time alerts to buy the market on September 12, 2018 and flipped short on September 21, 2018. (You can subscribe here if you haven't done so). ...
Recessions serve to unwind the excesses of the past expansion cycle. While the immediate odds of a US recession is still relatively low right now (see A recession in 2020?), and there are few excesses in the economy, the problems are found outside US borders. This time, most of the excessive private debt accumulation has...
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: The Dow has made another record high. Most technical analysts would interpret such a development bullishly as there is nothing more bullish than a stock or index making a new all-time high. However, there is the nagging problem of poor breadth. In the past few weeks, I have been warning about the...
Notwithstanding today's NAFTA USMCA driven reflex rally today, one puzzle to this market is the remarkable level of complacency in the face of potential market moving events, such as a trade war. From a technical perspective, complacency can be seen through the historically low level of weekly Bollinger Band on the VIX Index, which has...
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: For a change, I thought it was more appropriate to write about bond yields instead of the usual tactical trading commentary about stock prices on this FOMC day. Increasingly, there has been more and more bearish calls for bond prices (and bullish calls for bond yields) as the Fed continues its rate...
Goldbugs got excited recently when the gold stock to gold ratio turned up sharply after the gold price consolidated sideways subsequent to breaking up from a downtrend. Past episodes have been bullish signals for bullion prices. On the other hand, the front page of Barron's may also be a contrarian magazine cover bearish...
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: I have been asked to periodically update my sector leadership analysis as a guide to spot up and coming sector strength. The standard approach is to apply the Relative Rotation Graph (RRG) to the market. As an explanation, RRG charts are a way of depicting the changes in leadership in different groups,...
It has been 10 years since the Lehman bankruptcy, which became the trigger for the Great Financial Crisis (GFC). The financial press has been full of retrospective stories of what happened, and discussions from key players. The GFC was an enormous shock to investor confidence. Ever since that event, many investors have been living with...
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...
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