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What more could the bulls ask for?

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...

Where are we in the market cycle?

Where are we in the market cycle? The accompanying chart shows a stylized market cycle and changes in sector leadership. Bear markets are characterized by the leadership of defensive sectors such as healthcare, consumer staples and utilities. Early-cycle markets are sparked by the monetary stimulus or the promise of monetary stimulus. The market leaders in...

Another upper BB ride

Mid-week market update: The S&P 500 has been undergoing a ride on its upper Bollinger Band (BB), which historically has been a bullish sign of price momentum. The bigger question is how the tape will behave when the upper BB ride ends.     Here are some observations: The 5-day RSI is extremely overbought, but...

Opportunities in energy and gold

As the CRB Index decisively broke out to a new recovery high while breaking through both a horizontal resistance level and a falling downtrend that began in 2008, a divergence is appearing between crude oil and gold. The oil to gold ratio has strengthened to test a falling trend line.      This test of...

Market liftoff?

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...

Team Stagflation, or Team Transitory?

Stagflation fears are rising again. It’s a natural reaction to the short-term data. September headline CPI came in hot, though the core CPI print was in line with expectations and PPI was soft. Inflation expectations are spiking…     …while the Atlanta Fed’s GDP nowcast is plummeting. Consumer confidence is dropping, driven by supply chain...

An excess of caution?

Mid-week market update: Is market psychology cautious enough? A recent Deutsche Bank survey of investors reveals that not only is a correction the consensus, correction sentiment rose between September and October.     SentimenTrader also observed that inverse ETF volume has spike to a record level. Is this cautious enough for you?      ...

What rhymes with 2011?

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 the energy price surge cause a recession?

As energy prices surged around the world, I had an extensive discussion with a reader about whether the latest price spike could cause a recession. This is an important consideration for investors as recessions are equity bull market killers.   The evidence isn’t clear. On one hand, every recession in the post-War period (shaded grey...

Unsettling news from Crypto-Land

The NY Times recently published a note with the headline, “Crypto regulation heats up”.   The wrangling over spending bills and debt-ceiling dramas may be generating the biggest headlines in Washington, but the race to regulate the fast-growing cryptocurrency industry is also ramping up. Here’s a tour of some of the key developments this week:...