Now that virtually everybody has bought into the reflation and global cyclical recovery trade, and Reddit flash mobs are ganging up on short sellers to drive the most short-sold stocks into the stratosphere, what could go wrong with this bull? Notwithstanding the silliness of the WSB flash mobs, here are some key bearish...
Mid-week market update: What are we make of this market? In the last four years, the weekly S&P 500 chart shows that we have seen six corrective episodes of differing magnitudes. Risk happens, and sometimes with little or no warning. About half of those instances saw negative 5-week RSI divergences, which we are...
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. ...
What would the legendary market analyst Bob Farrell say about today's markets? I was reviewing the patterns of factor returns recently, and I was reminded of three of Farrell's 10 Rules of Investing (which are presented slightly out of order). Rule 3: There are no new eras – excesses are never permanent. Rule 2: Excesses in...
Mid-week market update: This market is in need of a reset in investor sentiment. In addition to recent reports of frothy retail sentiment, the latest BoA Fund Manager Survey (FMS) indicates that global institutions have gone all-in on risk. The FMS contrarian trades are now "long T-bills-short commodities, long US$-short EM, long staples-short small cap",...
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