There is an adage on Wall Street that investors shouldn’t fight the Fed (or central banks in general), but the devil is in the details. Callum Thomas of Topdown Charts that global central banks are engaged in a broad-based easing campaign. The limited sample of the history of such episodes (annotations are mine) show...
Mid-week market update: Stock market price momentum has been strong, but I did warn about possible October surprises in an election year (see S&P 500 breakout or fake-out?). In particular, I highlighted the risks of a port strike and an Israeli incursion into Lebanon, both of which have become reality. Despite plenty of warnings,...
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...
It has been over a week since the Fed’s decision to cut rates by a half-point, and that’s a decent interval to assess the market reaction. Investors should be aware of one crucial detail about market psychology. Even as the Fed offered a “commitment not to fall behind the curve” as a way of...
Mid-week market update: I continue to believe that the stock market is vulnerable to a setback. It’s not just the negative RSI divergence, which is concerning, it’s the inability for breadth to broaden out that’s worrisome. As the accompanying chart shows, the equal-weighted S&P 500 to S&P 500 ratio stalled out at a relative resistance...
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 latest BoA Global Fund Manager Survey shows that a soft landing for the U.S. economy is the overwhelming consensus. Fed Chair Jerome Powell leaned into that narrative at the post-September FOMC press conference after announcing the rate cut. He characterized the cut as “an appropriate recalibration of our policy stance”. The economy “has...
Mid-week market update: The Fed hates to surprise markets, but for the first time in a long time, market expectations of FOMC action was highly uncertain. Is the Fed going to cut by 25 or 50 bps? On the weekend, the majority expected a 25 bps cut, but by Monday, it had shifted to 50....
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...
Mario Draghi is known as the ECB President who said that he would do “whatever it takes” to save the euro. Now, his report on European Union competitiveness is designed to save the EU, and it’s caused quite a stir. Draghi identified the issues of EU competitiveness as poor productivity, caused by fragmentation of industrial...
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