It’s an old political trick. Engineer a recession in your first year and blame it on the previous occupant of the White House. Then take credit for the subsequent recovery. President Donald Trump and Treasury Secretary Scott Bessent recently rattled the markets with the same message of short-term pain for long-term gain. Bessent began...
Mid-week market update: Everyone calm down. It's not the end of the world. A clear-headed approach is to analyze the roots of the pullback from the perspective of the positioning of different market participants. How each reacted, and what might come next. First, U.S. equities were overvalued. It just needed a bearish catalyst. ...
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...
I sounded a warning in late January about a possible long-term market top, based on a negative divergence of the 14-month RSI. It wasn’t a “sell everything” signal, but a cautionary sign of a topping pattern. It is said that “bottoms are events, but tops are processes”. That’s because market bottoms tend to...
Mid-week market update: The S&P 500 fell yesterday and briefly kissed its 200 dma while flashing a positive divergence on the 5-day RSI. Was that the bottom? Here is a lesson on how to spot market bottoms, and a review of bottom spotting indicators. Condition indicators First of all, RSI...
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