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It’s a little too quiet out there

Mid-week market update: As the stock market grinds upward, I am seeing different variations of “it’s a little too quiet out there” warnings from market analysts. One example is the growing gap between the implied volatility (IV) of the S&P 500 and the historical realized volatility (HV).     Eventually, something has to give. It usually...

The Valuation Challenge to Stock Prices

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...

How Miran”s Can Opener Transforms the Fed

The September FOMC meeting concluded with the Fed opting for a quarter-point rate cut. Newly appointed Fed Governor and Trump ally Stephen Miran dissented and voted for a half-point cut. More astoundingly, the dot plot showed an outlier calling for a Fed Funds rate below 3% in 2025, which requires 1.25% in rate cuts over...

Waiting for the Next Market Shoe to Drop

Mid-week market update: Even as the equal-weighted S&P 500 touched another all-time high today, it was a marginal upside breakout.     Here are the bull and bear cases for the near-term outlook.     Bull Case Risk appetite indicators are confirming the stock market advance. Credit market risk appetite, as measured by the relative performance...

Get Ready to Buy the Dip, But Not Yet

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 Climate Change Threat to Productivity

This is the third in a series of the opportunities and threats to productivity. This week, I address the issue of climate change (also see AI Productivity and the Promised Land and Will America get old before it becomes Great Again?).   The World Health Organization recently issued a joint report with the World Meteorological...

A Market Divided Against Itself

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...

Will America Get Old Before It Becomes Great Again?

This is the second in a series of the opportunities and threats to productivity. This week, I focus on the effects of labour supply on productivity, (see AI Productivity and the Promised Land). I am grateful for the aid and guidance from New Deal democrat for his help in data sourcing and analysis in the...

The golden question: Buy or sell the rate cut?

Mid-week market update: Scheduling notice – I will be traveling for the next 10 days. Barring wild market volatility next week, there will be no mid-week market update next Wednesday, but regular commentaries will be published each weekend.     It’s always tricky to write a market commentary on the day of the FOMC meeting, as...

Twilight of the AI Bull?

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...