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...
The U.S. economy is showing signs of weakness. The Citigroup Economic Surprise Index, which measures whether economic releases are beating or missing expectations, has been trending down. In addition, Chair Powell has more or less made it clear that a September rate cut is in the works, as long as the inflation data stays low....
Mid-week market update: This week has been full of major market moving events. The BOJ raised rates and announced it would half its bond buying program. The announcement spiked the JPY and set off a scramble to unwind the carry trade. The Fed kept rates unchanged today, but hinted strongly at a September rate cut....
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...
It’s becoming harder and harder to avoid the cold hard facts. China is slowing. The PBOC unexpectedly cut interest rates last week. The central bank began by cutting the benchmark lending rate on overnight, 7-day and 1-month standing lending facility (SLF). The move was followed by another surprising 0.20% cut in its 1-year policy rate,...
Mid-week market update: Today's market action looks rather ugly today, but I believe that stock prices are poised for a short-term bottom as the S&P 500 tests a key rising trend line on the weekly chart. Here's why. A market bottom signal Two of the components of my market bottom model...
Well, well, the Biden decision to withdraw from the presidential race certainly put a new spin on stock market behaviour. According to Ryan Detrick, stock prices don't behave well during election years of lame duck presidents. That said, "lame duck" years often refer to a second term president. The closest analogues to 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 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...
In the wake of Biden’s subpar debate performance and the assassination attempt on Trump, the prediction markets’ odds of a Trump victory in November have substantially risen. Equally important is Wall Street’s reaction, which has investors sitting up to take notice of the implications of a second Trump Administration in 2025. Despite the...
Mid-week market update: Small cap stocks, as measured by the Russell 2000 and S&P 600, staged convincing upside breakouts in the past week. Both small cap indices are now testing key relative resistance zones against the S&P 500. Even though this seems to be counter-intuitive, such a development could be bearish for 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 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...
We’ve all seen the warning signs about narrow market concentration and deteriorating breadth. The S&P 500 is an accident waiting to happen. On the other hand, strategist Ed Yardeni stated in a CNBC interview that he believed we are in a “slow motion melt-up”. I agree. While the excesses in the stock market are...
Mid-week market update: The usually reliable S&P 500 Intermediate Term Breadth Momentum Oscilator (ITBM) flashed a buy signal in the third week of June when its 14-day RSI recycled from oversold to neutral. The S&P 500 consolidated sideways for about a week and resumed it climb. This is the story of why I did not...
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...
Recent U.S. economic data has generally been weakening, as evidenced by the decline in the Citigroup Economic Surprise Index (ESI, gold line), which measures whether economic data is beating or missing expectations. As ESI has been roughly correlated to bond yields, this should put downward pressure on rates and expectations of rate cuts in the...
Mid-week market update: The S&P 500 followed the typical pattern of consolidating sideways for about a week after an upper Bollinger Band ride before breakout out to a fresh all-time high. As recent history shows, it's impossible to know which way stock prices will break after the consolidation. In many ways, the upside...
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...
The first half of 2024 was very good to U.S. equity investors. The S&P 500 was up 14.5% excluding dividends for that period. As stock market investors look forward to the second half, the first order of business will be the Q2 earnings reports, and there are a number of unanswered questions. The bulls...
Mid-week market update: The S&P 500 has become an index of behemoth NVIDIA and everything else. The all-time high experienced by the S&P 500 in mid-June was largely attributable to the price action of NVIDIA. The rest of the market, as measured by the equal-weighted S&P 500, has been trading sideways for several months and...
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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