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Did the NVIDIA-fueled rally exhaust the bulls?

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 path to Magnificent Exuberance

Signs of technical deteriorations had been appearing last week, but NVIDIA’s earnings report saved the day. The earnings report can best be described as a blowout. The results beat Street expectations on all metrics and the company guided upwards. There wasn’t anything not to dislike about the report. As a consequence, the Semiconductor Index, which...

NVIDIA at the bat

Mid-week market update: The poem “Casey at the Bat” may represent an apt analogy for today’s stock market (see Wikipedia entry if you’re unfamiliar with it). Technical warnings signs had been appearing. The S&P 500, the NASDAQ 100, and the Semiconductors Index, which is a bellwether for AI-related plays, had all weakened and violated their...

Are negative divergences necessarily bearish?

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...

Is transitory disinflation here to stay?

I’ve discussed the risk of transitory disinflation before, and it manifested itself in the form of hotter-than-expected January CPI and PPI reports. The reports rattled the bond market and expectations of the first quarter-point rate cut has been pushed out from May to June and a slower rate cut trajectory for the remainder of year....

A hiccup, or the start of a correction?

Mid-week market update: The hot CPI print on Tuesday spark a massive risk-off episode. The S&P 500 staged a partial recovery today. The key question is, “Is this just a hiccup in the bull run, or the start of a correction?”   The stock market has been ripe for a correction for some time. The...

Why this AI bull is nothing like the NASDAQ in 2000

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 investable is China? (Revisited)

About a year ago, when China emerged out of its zero-COVID lockdowns, I rhetorically asked, “How investable is China?”. I concluded, “Long-term investors in China are likely to face subpar returns coupled with high volatility”.   Now that China’s troubles have returned, it’s time to revisit the China investability question. The accompanying chart shows that...

Correction imminent?

Mid-week market update: I am sure everyone has seen the breadth divergences. Even as the S&P 500 rises to all-time highs, different versions of the Advance-Decline Line are struggling. Breadth deterioration is evident the further down you go in market capitalization.     The breadth divergence can also be observed in falling correlations between stocks...

Get ready to buy 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...