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Waiting for the Next Market Shoe to Drop

Mid-week market update: Even as the equal-weighted S&P 500 touched another all-time high today, it was a marginal upside breakout.     Here are the bull and bear cases for the near-term outlook.     Bull Case Risk appetite indicators are confirming the stock market advance. Credit market risk appetite, as measured by the relative performance...

Get Ready to Buy the Dip, But Not Yet

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 Climate Change Threat to Productivity

This is the third in a series of the opportunities and threats to productivity. This week, I address the issue of climate change (also see AI Productivity and the Promised Land and Will America get old before it becomes Great Again?).   The World Health Organization recently issued a joint report with the World Meteorological...

The message from gold’s generational breakout

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...

Uncharted investor waters: From soft to hard power

Markets were rattled by policy under Trump 1.0 by his unpredictable and chaotic nature. Trump 2.0 promises to be more of the same. Other than the transactional nature of Trump’s deal making, what’s his ultimate end game?   It’s to undo the effects of globalization. The political backdrop can be explained by Branko Milanovic’s famous...

A change in market tone

Mid-week market update: The stock market’s relief rally arrived this week when the WSJ reported over the weekend that Trump’s “Liberation Day” reciprocal tariffs due to be announced on April 2 will be narrowly focused. The S&P 500 rallied to regain its 200 dma. The index pulled back below the 200 dma when Bloomberg reported...

How to trade the momentum reversal

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...

Making sense of market uncertainty

The latest FOMC statement and subsequent press conference were full of references to “uncertainty”. Most notably, the FOMC statement changed the language related to the Fed’s goals being “roughly in balance” to “uncertainty around the economic outlook has increased”.     Not only is uncertainty elevated, but also the risks to inflation, GDP growth and...