I am reiterating my bullish outlook on gold. The yellow metal staged an upside breakout from a cup and handle pattern in March. As well, the long-term inflation expectations of ETF (RINF) has been in a steady uptrend. The only question is how far and how fast can gold run? The future may...
Mid-week market update: I am publishing this earlier than usual as the U.S. markets are closed for the Juneteenth holiday. The S&P 500 has gone on another upper Bollinger Band ride, accompanied by a severely overbought reading on the 5-day RSI, which is over 90%. Overbought conditions are often not bearish, but a manifestation...
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...
Remember that equity investors tend to enjoy strong returns in the absence of recession, which dents returns, or war and revolution, which can result in a permanent loss of capital. With those caveats in mind, the market gods are presenting patient investors with three gifts from the three economic blocs in the world: the U.S.,...
Mid-week market update: The option market was pricing in a daily equity market swing of 1.6% ahead of today's events, namely the May CPI report and the FOMC decision. Even though the S&P 500 gained strongly today, the move could be said to be disappointing in volatility terms. The bullish tone was set 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 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...
Is good economic news good news for equities or bad news? We know how to interpret macro news for the bond market. The Citi Economic Surprise Index (ESI), which measures whether top-down economic releases are beating or missing expectations, has been a bit weak. Historically, a weak ESI has meant lower bond yields. ...
Mid-week market update: The S&P 500 has risen to a new all-time high, and this move was well-telegraphed. I wrote on the weekend and characterized conditions "half-hearted buy signals that indicate low downside risk". The S&P 500 subsequently staged an upside breakout from a bull flag to a fresh all-time high. 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 Asset...
The closely watched April PCE moderated as expected. Headline PCE came in 0.3%, in line with expectations, while core PCE was 0.2% (blue bars), which was softer than expectations. Supercore PCE, or services ex-energy and housing, also decelerated (red bars). This latest print represents useful progress, but won’t significantly move the needle on Fed policy....
Mid-week market update: I pointed out on the weekend that it's not unusual for the S&P 500 to consolidate sideways after reaching its upper Bollinger Band before the market makes its next major directional move. There have been five other similar instances in the last six months. What's a little unusual about the current episode...
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...
Perhaps you remember the late-night television commercials selling tapes and courses on how to buy real estate with no money down. One memorable character from the early 1990s ran infomercials featuring him on a yacht surrounded by bikini-clad women to emphasize how he, a Vietnamese refugee, had made a fortune from nothing. You could do...
Mid-week market update: After the market reaches its upper Bollinger Band, it isn't unusual at all for it to consolidate sideways and drift for a few days before making the next move. As the chart below shows, this has happened four other times (grey shaded boxes) in the last six months. The latest episode is...
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 Dow, S&P 500 and NASDAQ Composite all achieved new all-time highs last week. It is said that there is nothing more bullish than a stock making a new high. This is not a time for caution. Higher stock prices are ahead. Here are the reasons why I am bullish. Bullish...
Mid-week market update: Now that the Dow, S&P 500, and NASDAQ Composite have risen to an all-time high on the back of a slightly softer than expected CPI report, and Keith Gill, otherwise known as Roaring Kitty, and the meme stock brigade is back, how frothy is this stock market? Just look at the surge...
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...
Artificial Intelligence (AI) related stocks have been on an absolute tear. The Magnificent Seven, which is one proxy for AI plays, has beaten the S&P 500 for six consecutive quarters. But the degree of outperformance is decelerating. This looks like the early stages of an AI hangover. I believe AI stocks are overhyped...
Mid-week market update: Bulls were disappointed when the Zweig Breadth Thrust buy signal didn't achieve its objective when the ZBT Indicator failed to rise from oversold to overbought in 10 trading days. But they received a consolation when it reached a late overbought reading on Monday, which was two days late. Do the...
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