China has been undergoing a series of stop-start growth spurts mini-cycles, courtesy of credit driven stimulus programs (chart via RBS): The size of the latest Q1 financing induced boom was extraordinary, as it hinted at panic by the authorities. For some perspective, credit expansion in Q1 2016 was somewhere between the GDP of...
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: Regular readers know that I have been bullish on the commodity and reflation trade (see A possible generational low in oil and energy stocks and The road to a 2016 market top). On the weekend, I postulated three separate short-term scenarios for the stock market (see *Sigh* Another growth scare): The growth...
Let me make myself very clear. As a Canadian, I have no horse in the American presidential race, but Donald Trump is a clown. He is a loose cannon on deck. He could also become the next president of the United States. So when does the market start to discount the potential effects of a...
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: In the short run, the SPX has pulled back and appear to be about to test its 50 day moving average (dma) at 2040, while experiencing a positive divergence on RSI-5. The SPX saw a Golden Cross last week - and the right way to trade these signals is to use...
I recently wrote about my scenario for a market top in 2016 (see My roadmap for 2016 and beyond), which goes something like this: Unemployment is now at 5.0%, which is a point at which the economy historically started to experience cost-push inflation. Inflation edges up, which is already being seen in commodity prices. Initially,...
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...
Imagine the following scene in the not too distant future: The US Navy confronts the PLAN (People's Liberation Army Navy) in the South China Sea. Someone miscalculates and shooting starts and the situation escalates wildly. Eventually, there are three American carrier task forces, accompanied by submarines, along with the fleets of Asian allies like the...
Mid-week market update: There doesn't seem to be much of a point in writing about the technical condition of the market when its likely path is dominated by a binary event like the FOMC meeting this week. So I thought that I would write about how to interpret and react to the FOMC statement instead....
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: I was wrong. I thought that the stock market was due for a pause and pullback last week (see A possible pause in the uptrend). Instead, it has strengthening on skeptical sentiment and improving breadth. The combination of these conditions are suggestive that the current rally as a lot further to go in...
In Ben Bernanke's famous 2002 helicopter speech, he made the point that the Fed has numerous tools to fight deflation, even if interest rates was at the zero bound: The U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes...
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...
The latest Chinese GDP release came in right in line with expectations at 6.7%, but the growth came at a cost. I had written about this problem in my previous post, Big Trouble with 5-year China?). The Chinese authorities appear to be up to their old tricks again of using credit to drive growth, which is...
Mid-week market update: Let me make myself absolutely clear, I remain intermediate term bullish on US equities based on the points I made in past remarks (see Equities in a macro sweet spot and The trend is your friend (breadth, seasonality and sentiment too)). As the SPX struggles with a technical resistance level at about 2080,...
A reader raised a question after my generally bullish weekend post (see Equities in a macro sweet spot). The latest report from Barron's of insider activity had shown that readings had risen up into sell signal territory. How worried should investors be about this development? Insiders tend not to be short-term traders and...
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...
After I wrote my last post about the GAAP gap, which addressed many of the concerns about shortfalls in earnings quality (see The GAAP gap as Rorschbach test), I had a number of discussions about the vulnerability of the stock market to buyback activity. I had been meaning to write more on this topic, but...
Mid-week technical update: In my weekend market commentary, I wrote that I was intermediate term bullish on equities (see The trend is your friend (breadth, seasonality and sentiment too)). However, my inner trader was tactically watching the relative performance of the cyclical sectors for signs of market weakness. Now that cyclical stocks have weakened and,...
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