On this 4th of July Independence Day weekend, let's try a change of pace and indulge in some technical analysis of a different sort. The behavioral finance basis for technical analysis is the wisdom of the crowds. Francis Galton observed a competition at a local fair in 1906 where about 800 people tried to guess...
Mid-week market update: It is said that the adage "hindsight is 2020" may have been a garbled warning from a future time traveler. This year is certainly turning up like that. The S&P 500 fell -20% in Q1 2020, and recovered 20% in Q2. It's been that kind of year. Tactically, the index is backtesting...
As Q2 earnings season is about to begin, it would be useful to assess the level of expectations going into reporting season, and the risks ahead. According to FactSet, forward 12-month EPS estimates have been bottoming and begun to turn up after a massive downdraft. On the surface, this appears to be 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 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...
Some analysis has recently emerged pointing to a bleak decade for equities, and US equities in particular. Mark Hulbert highlighted a model outlined in the Philosophical Economics blog, entitled "the single greatest predictor of future stock market returns". The model is based on US household allocation to equities and uses the levels as a contrarian...
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