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Trust the Thrust, or Sell in May?

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...

A Trend Model update: Still cautious

My Trend Asset Allocation Model is a market timing model that has been running since 2013. While the model only issues buy, hold and sell signals for stocks, investors nevertheless need to make their own decisions on how much to buy and sell. Based on my out-of-sample signals, I created a model portfolio by varying...

A ZBT buy signal update

Mid-week market update: Today’s market action has a constructive quality to it. The S&P 500 managed to stage an upside breakout through 5500 resistance and fill the price gap just above that level. The latest development saw the index pulled back to succesfully test the 5500 resistance turned support       It’s normal to...

4 reasons to be cautious about the ZBT buy signal

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...

An American Emerging Market crisis?

Something unusual happened recently. During risk-off episodes, U.S. economic pain has been cushioned by falling bond yields and an appreciating USD, which translates into lower interest rates and more consumer spending power.   The risk-off episode that began in early April, which was just after the “Liberation Day” tariff announcements, saw the opposite. The price...

Sounding the all-clear, but for how long?

Mid-week market update: It’s time to sound the all-clear signal, as least in the short run. Both the S&P 500 and the equal-weighted S&P 500 have decisively staged upside breakouts through the falling trend line. The bulls have regained control of the tape.     The next resistance test is the 50% retracement level at...

60/40 in an era of American Unexceptionalism

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...

Known unknowns, and unknown unknowns

Ahead of the Second Gulf War, Secretary of Defense Donald Rumsfeld famously referred to “known knowns”, “known unknowns” and “unknown unknowns” when responding to a question about Iraqi weapons of mass destruction.   Fast forward to 2025, investors have to contend with a series of known unknowns and unknown unknowns as they consider their investment...

Torturing the data until it talks

Mid-week market update: Market internals are showing signs of a wash-out. Readings are normalizing after an extreme oversold condition against a backdrop of extreme fear. Stock prices should advance from here.   However, the S&P 500 just experienced a “death cross”, where the 50 dma falls below the 200 dma. Notwithstanding today’s negative surprises from...