Mid-week market update: The SPX has staged an upside breakout to new all-time highs and indicators are looking overbought. Now the key question for traders is whether current conditions represent an extended market that`s ripe for a pullback, or does do these conditions represent a “good” overbought condition that accompanies a momentum surge, which leads to...
Several months ago, the internet was all abuzz over the victory of Google's AlphaGo program beating Go grandmaster Lee Sedol (see story here). As the game of Go is a computationally and mathematically complicated game and the number of variations in the game is an order of magnitude higher than chess, it was a great...
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 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...
In the wake of the Brexit shock, Fed governor Jerome Powell was the first Fed speaker to give a speech, which gives some clue to the direction to Fed policy. While what the Fed does near-term is important to traders, the longer term thinking is important to investors as the definition of the Fed's reaction...
In the past few months, I have received a lot of feedback and criticism over my use of forward 12-month EPS estimates, such as the chart below that appeared in last weekend`s post (see Brexit panic: A gift from the market gods?). I would like to clarify why this form of analysis matters and this...
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 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...
Mid-week market update: There isn't much to say about the short-term stock market outlook, other than to acknowledge that a strong reflex rally is underway. As the markets are reacting in a highly emotional way, I have little to add other than to say that the market will be volatile. If you did jump on...
As I pointed out yesterday (see Brexit: LTCM or Lehman?), my Trifecta Bottom Spotting Model, which has shown an uncanny record of spotting short-term market bottoms. This model flashed an "exacta" buy signal as of Friday's close and it has now flashed a "trifecta" signal based on Monday's close. The model is based on the...
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 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...
Well, my Bremain call didn't go so well (see Positioning for a Bremain result). As I write this, the BBC has called the referendum in favor of Leave by a margin of 52-48. GBPUSD is down about 10% and Asian stock markets are down 2-4%. If you were correctly positioned for this outcome, congratulations, but...
Mid-week market update: Even though the polls show the two sides running neck and neck, my inner trader is positioning for a Remain result in the UK referendum for the following reasons. Polling internals indicate momentum towards Remain; Bookmaker odds overwhelmingly favor Remain over Leave; and Market anxiety is rising - so a "buy the rumor,...
For my (mainly) American friends, file this under "why you don't understand Europe": The Vietnam War was a war that scarred the national psyche and dramatically changed the tone of American foreign policy for a generation. If you visit the Vietnam Memorial in Washington DC today, you will find roughly 58,000 names of fallen soldiers...
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 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...
Maybe it's me, or my imagination? Even before the latest round of market weakness, most of the feedback and sentiment on my social media feed has tended to bear bearish. I saw a fair number of calls for SPX to eventually test its February lows at about 1820, but I haven't seen a lot of...
Mid-week market update: What's going on with the VIX Index? The VIX, which measures implied option volatility and a useful measure of "fear", spiked dramatically on Monday. While SPX did fall, the magnitude of the decline didn't match past VIX spikes. It prompted this tweet from Ryan Detrick: Rob Hanna at Quantifiable Edges...
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 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...
Rather than indulge in instant analysis, I wanted to give myself a few days to reflect on Janet Yellen's speech on Monday (see full transcript). In doing so, I learned a number of things about Fed policy that I didn't know before: How much does the Fed want to raise before it considers rates to...
Mid-week market update: I like to monitor the option market from a sentiment modeling perspective because, unlike surveys which can swing all over the place, the option market is a forum where people are putting real money on the line. Even as the stock market has been slowly grinding upwards, the option market has been showing...
I present for your consideration the following mystery chart. Would you rate this as a "buy", "hold" or "sell"? Your answer will tell you something about your global macro-economic outlook and the likelihood of an equity bear market in the near future. Scroll down for the answer... ...
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 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...
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