Mid-week market update: I presented this chart on the weekend and rhetorically asked if the inevitable market bounce would be durable. Since then, the S&P 500 rallied strongly off last Friday’s oversold condition. In addition, the stochastic recycled from oversold to neutral, which is a tactical buy signal. Does this mean the relief...
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...
When Fed Chair Jerome Powell spoke at a moderated Q&A last Tuesday, he confirmed the higher-for-longer message of virtually all other Fed speakers: “The recent data have clearly not given us greater confidence and instead indicate that it is likely to take longer than expected to achieve that confidence [to reduce rates]”. As a...
Mid-week market update: I wrote on the weekend that conditions were setting up for a panic bottom (see Here comes the sentiment flush), but one final flush may be necessary to spark a relief rally. The S&P 500 has now achieved the milestones for a panic bottom. The stochastic is sufficiently oversold. The index violated...
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 worried should equity investors be about valuation? The S&P 500 is trading at a forward P/E of 20.6, which is elevated compared to its 5-year average of 19.1 and 10-year average of 17.8. Moreover, the 10-year Treasury yield of 4.5% is becoming a more attractive alternative to owning stocks. Here are the...
Mid-week market update: In the wake of the hot CPI print and the doubts raised by members of the FOMC as shown in the minutes, such as: Some participants noted that the recent increases in inflation had been relatively broad based and therefore should not be discounted as merely statistical aberrations. However, a few participants...
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...
Last week, I suggested that even though Fed Chair Powell voiced a balanced view of inflation, a voting bloc of hawks (Waller, Bostic, Barkin, and Bowman) on the FOMC may be a key obstacle to the market expectations of a June rate cut. Indeed, Atlanta Fed President Raphael Bostic reiterated his view last week of...
Mid-week market update: The S&P 500 hasn’t seen a 2% pullback since the rally off the November bottom, but is a deeper pullback starting? Stephen Suttmeier at BoA wrote that the index is testing an initial objective in the 5200s, with further upside in the 5600s. This would be an ideal spot for the market...
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