An oversold bounce, but how far?

Mid-week market update: I would first like to convey to all of my American friends my best wishes for a Happy 4th of July. Enjoy you day off, as more fireworks may be on the way. The stock market appears to be starting an oversold bounce. Callum Thomas has been conducting an weekly (unscientific) Twitter...

A looming global recession, or buying opportunity?

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...

The new Fragile Five to avoid

In the wake of my last post about whether USD assets and Treasury paper would remain safe haven and diversifiers in the next global downturn (see Will diversified portfolios be doomed in the next recession), I received a number of questions as to what investors should avoid. There is an obvious answer to that question....

Negative real yields = Equity sell signal?

A reader asked me my opinion about this tweet by Nautilus Research. According to this study, equities have performed poorly once the inflation-adjusted 10-year Treasury yield turns negative. With real yields barely positive today, Nautilus went on to ask rhetorically if the Fed is behind the inflation fighting curve.     Since the publication of...

Weaken the USD to Make America Great Again

About a month ago (see The bear case: How Trumponomics keeps me awake at night), I highlighted a Bloomberg interview with BAML currency strategist David Woo. Woo pointed that there is an inherent contradiction in a couple of Trump's policies. His fiscal policy of tax cuts is pro-growth and therefore USD bullish, but his "America...

The bear case: How Trumponomics keeps me awake at night

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 Model is...

Don’t ask me about gold, ask about the USD

Mid-week market update: The market gods must be angry. Just as a goldbug predicted the demise of the US Dollar (and therefore the rise of gold) as of September 30, 2016 at 4pm ET, the USD rallied and gold cratered on Tuesday. The technical damage to gold was extensive, as it broke a key support...

Watching the USD for stock market direction

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 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 Model...

The bulls are winning, but they shouldn’t relax

Mid-week market update: On the weekend, I wrote that the stock market was experiencing a bullish breadth thrust and the market is likely to see a series of "good"overbought readings where stock prices either continue to grind up or consolidate sideways as they get overbought (see RIP Correction. Reflationary resurrection next?). So far, so good....

Worried about a China devaluation and currency war?

I had been meaning to write about this earlier, but I didn`t find the time. Kyle Bass caused a stir last week with his letter to his investors when he wrote that China was on the verge of a major devaluation and financial blow-up (via Valuewalk): Our research suggests that China does not have the...