Seasonal weakness ahead?

Mid-week market update: Jeffrey Hirsch of Almanac Trader recently indicated that the first part of December sees a period of seasonal weakness, followed by small cap leadership into year-end.     I regard seasonality as informing me about the climate, while the weather can vary day-to-day. Here is my assessment of the weather ahead.  ...

All hail the bullish 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...

Waiting for the gap fill

Mid-week market update: The decline in the S&P 500 seems to have been arrested at its 20 dma (blue line). The next question is which price gap gets filled first. A fill of the upside gap (in grey) would be positive for the bull case, while a fill of the downside gap (in pink) would...

How far can the post-election rally run?

Mid-week market update: The latest BoA Global Manager Survey shows that institutions have stampeded into U.S. equities in the wake of Trump’s victory. The apparent crowded long position is concerning from a contrarian viewpoint.     I had suggested on the weekend that it was time for the S&P 500 to pause and take a...

How to trade the Trump euphoria rally

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...

A final update on the Trump Trade: Tail-risk assessment

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...

What I am and what I am not worried about

Publication notice: I will be starting a two-week holiday this weekend, and here is my planned publication schedule. Weekend publications will be condensed from two publications to one. Barring significant market volatility, there will be no mid-week market update. Regular service will resume after the U.S. election.   Mid-week market update:  We are in the...

A buy signal. but with a *

Mid-week market update: Further to my last post (see A buy signal setup), the 14-day RSI of the S&P 500 Intermediate Term Breadth Momentum Oscillator (ITBM) flashed a buy signal when it recycled from oversold to neutral. By the book, this is a legitimate buy signal.     Under the current circumstances, I have some...

Is the Fed ahead or behind the curve?

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...

S&P 500 breakout or fake-out?

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...

FOMC decision: A lesson in managing expectations

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....

Risk budgeting ahead of NVIDIA’s earnings report

Mid-week market update: Several readers asked me for comments going into NVIDIA's earnings report Wednesday night, so I thought I would publish my mid-week update a little earlier than usual.   Bottom line, I have no idea about NVIDIA's fundamentals. You can study the chart pattern, but event-driven market moves are "roll the dice" moments....

Bullish momentum vs. bearish seasonality

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...

4 reasons why you should be tactically bullish

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 Asset...

What will lead the anticipated market rebound?

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...

Assessing the damage: Not just the carry trade

After strengthening rapidly, the Japanese Yen (bottom panel) has stabilized has stabilized in the 140-150 range. The 10-year Treasury-JGB spread also stabilized and found support. So did the Nikkei Average after suffering the greatest one-day decline since the Crash of 1987. The Bank of Japan sounded a dovish tone when deputy governor Shinichi Uchida said...

Why the market panic may not be over

Mid-week market update: Is the worst of the Japanese risk-off episode over? The Nikkei formed a bullish harami pattern when it recovered on Tuesday, but the recovery candle formed an "inside day" compared to Monday's massive downdraft. As well, BOJ deputy governor Governor Shinichi Uchida calmed markets and struck a dovish tone when he said...

The carry trade as risk driver

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 to trade the Great Unwind

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...