Things you don’t see at market bottoms: Rational Exuberance edition

In Free by Cam Hui

It is said that while bottoms are events, but tops are processes. Translated, markets bottom out when panic sets in, and therefore they can be more easily identifiable. By contrast, market tops form when a series of conditions come together, but not necessarily all at the same time. My experience has shown that overly bullish sentiment should be viewed as …

Embrace the Blow-off (but with a stop-loss discipline)

In Free by Cam Hui

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 Model is an asset …

Round number-itis at SPX 2600?

In Free by Cam Hui

Mid-week market update: The mid-week market update is being published a day early because of the shortened trading week due to American Thanksgiving on Thursday. You can tell a lot about market psychology by the way it reacts to news. Early Monday morning (Europe time) and before the market open, a grim Angela Merkel announced that coalition talks had collapsed, …

Relax! NAFTA isn’t going to collapse

In Free by Cam Hui

As American, Canadian and Mexican negotiators meet for a fifth round of NAFTA discussions in Mexico City, CNBC reported that a number of analysts are projecting significantly high odds that the trade pact would fall apart: Jens Nordvig, Exante Data CEO, sent out a warning note Monday that his firm now sees a 30 to 40 percent chance of NAFTA …

2018 outlook: The last charge of the bulls

In Free by Cam Hui

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 Model is an asset …

An orderly retreat, but getting oversold

In Free by Cam Hui

Mid-week market update: After several weeks of waiting, evidence of near-term weakness and consolidation is finally appearing. The SPX violated an uptrend this week and it is undergoing a retreat or a period of sideways consolidation.     Until today, this orderly retreat in stock prices was enough to depress stock prices, but not enough to flash oversold readings. Today`s …

Nervous about FANGS? Here is a washed-out high beta opportunity

In Free by Cam Hui

Are you getting nervous about the FANG stocks? The debut of the FANG+ futures contract may mark a top for this group, as it presents an easy vehicle for hedgers to short these high beta stocks. But don’t despair, consider this chart of the relative performance of a high beta group that is washed-out, and may present an opportunity for …

The tax reform jitters correction?

In Free by Cam Hui

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 Model is an asset …

The market’s report card on the GOP tax bill

In Free by Cam Hui

Mid-week market update: The price action of stocks in the last few weeks makes it evident that US equities are awaiting the resolution of the Republican tax bill. This week will be critical for the progress of the bill through the House, as it is scheduled to be marked up in the Ways and Means committee. So far, the market …

Bull or bear? It depends on your time horizon

In Free by Cam Hui

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 Model is an asset …

A market volatility update

In Free by Cam Hui

Mid-week market update: In my weekend post (see Good news, bad news from Earnings Season), I had identified several sources of potential market volatility this week: Mueller indictments GOP tax plan FOMC decision Fed chair nomination Key macro-economic reports It’s time for an update, and it spells caution for the bulls. Mueller indictments I don’t consider my job to judge …

Things you don’t see at market bottoms: Halloween edition

In Free by Cam Hui

It is said that while bottoms are events, but tops are processes. Translated, markets bottom out when panic sets in, and therefore they can be more easily identifiable. By contrast, market tops form when a series of conditions come together, but not necessarily all at the same time. I have stated that while I don’t believe that the stock market …

Good news, bad news from Earnings Season

In Free by Cam Hui

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 Model is an asset …

Minor turbulence ahead

In Free by Cam Hui

Mid-week market update: The SPX has been on an upper Bollinger Band (BB) ride on the weekly chart, and I have been waiting for a downside break on the weekly RSI-14 indicator as the signal that a correction is starting. Current readings show that the weekly RSI has not broken down below 70 tet.     However, a downside break could …

Peak FANG?

In Free by Cam Hui

I had been meaning to write about this topic, but Barron’s beat me to it with a terrific article called “Breaking up Tech” which detailed the anti-trust vulnerability of Big Tech companies. The Barron’s article stands in direct contrast to a recent Josh Brown post which postulated that investors are rushing into the technology sector as a hedge against the obsolescence …

Beware the expiry of the 19th Party Congress Put Option

In Free by Cam Hui

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 Model is an asset …

A continued grind upwards

In Free by Cam Hui

Mid-week market update: I wrote last weekend that there was a possibility that the stock market may undergo a melt-up, followed by a crash (see Market melt-up and crash?). That scenario may well be occurring, and I sent out an email to subscribers on Monday stating that my trading account had moved from all-cash to being long stocks. There are …

What would a Taylor Fed look like?

In Free by Cam Hui

Bloomberg reported that Donald Trump interviewed John Taylor for the position of Fed chair and “Trump gushed about Taylor after his interview”, as “Kevin Warsh has…seen his star fade within the White House”. The current list of leading candidates under consider are said to be Jerome Powell, John Taylor, Kevin Warsh, and Janet Yellen. Taylor’s rise in the candidate stakes …

Market melt-up and crash?

In Free by Cam Hui

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 Model is an asset …

Peak small cap tax cut euphoria?

In Free by Cam Hui

Mid-week market update: The intermediate term technical trend remains bullish, it`s hard to argue with the strong momentum that the market has displayed. Ari Wald recently pointed out that the market is experiencing a “good overbought” condition (my words, not his) that has the potential to carry the market much higher.     However, the current market environment may be …