Mid-week market update: Is there any more "pop" after last week's drop? The market certainly had a big rally yesterday, and it is not unusual to see a pause the day after a big move. Here are the bull and bear cases. Bull case Option based sentiment is supportive of further advances....
I received a ton of comments after yesterday's post (see A correction, or the start of a bear market?), probably because of the tumultuous nature of last week's market action. Readers pointed out a number of buy and sell signals that I had missed in yesterday's post and asked me to comment on them. (Rather...
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 last time I published a post in a series of "things you don't see at market bottoms" based on US based investor enthusiasm was in June. Sufficient signs have emerged again for another edition. As a reminder, it is said that while bottoms are events, but tops are processes. Translated, markets bottom out when...
Mid-week market update: Is the correction over? At least my inner trader had been positioned for market weakness. Subscribers who had been following my inner trader, you know that we issued real-time alerts to buy the market on September 12, 2018 and flipped short on September 21, 2018. (You can subscribe here if you haven't done so). ...
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...
Notwithstanding today's NAFTA USMCA driven reflex rally today, one puzzle to this market is the remarkable level of complacency in the face of potential market moving events, such as a trade war. From a technical perspective, complacency can be seen through the historically low level of weekly Bollinger Band on the VIX Index, which has...
Mid-week market update: There are a number of signs that the pullback that began in late August has run its course. These conditions makes me short-term bullish, but I remain longer term cautious on equities. The market's recent action of a correction to test its breakout level turned support is constructive. The index pulled back...
As the stock market enters the late stages of its bull run (see my last post Market top ahead? My inner investor turns cautious), inflation hedge vehicles typically rally as inflationary pressures rise. We are starting to see a similar effect in gold prices. As the chart below shows, the recent weakness in gold prices...
Mid-week market update: I am writing the mid-week update a day early for two reasons. First, tomorrow is FOMC day and anything can happen. As well, I am getting on an airplane and I will be in the air when the market closes. It is astonishing how nervous the market has become after Facebook's disappointing...
The news about the Sino-American trade war seems to get worse every day. Callum Thomas pointed out that corporate managements are increasingly raising concerns about rising tariffs. Chinese stocks have cratered, along with the stock indices of China's largest Asian trading partners. However, a couple of contrarian buy signals are appearing. First, trade...
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...
Now that the SPX flirted with the combination of the 2700 level and its lower Bollinger Band (BB), it's time to see if the market is ready to bottom on a short-term and intermediate basis. Let`s analyze outlook from the perspective of breadth, momentum, and sentiment. Breadth and momentum The readings from...
Mid-week market update: The fate of this market is becoming highly news dependent. Ed Yardeni recently stated in on CNBC that he has never seen a "president this bullish and bearish at the same time". The market wants to go up on earnings, but it has been held back by Trump`s protectionism. Will stock prices...
The last time I published a post in a series of "things you don't see at market bottoms" based on US based investor enthusiasm was in January. That's because market exuberance had significantly moderated since the January top. Guess, what, the giddiness is baack! As a reminder, it is said that while bottoms are events,...
Mid-week market update: Sell in May? June swoon? Not so far! As the SPX convincingly staged an upside breakout above the 2740 resistance level, the bull case is easy to make. We have seen fresh all-time highs this week from the following: NASDAQ Composite Russell 2000 small caps NYSE Advance-Decline Line NASDAQ Advance-Decline Line I...
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...
Brett Steenberger recently warned that traders about trading on noise, which is advice to which I wholeheartedly agree: In other words, before we can determine whether or not we have an edge (in systematic or discretionary trading), we need to establish knowledge. A theory explains how and why something occurs. Testing of historical data can...
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...
Mid-week market update: There remains a fair amount of stock market skittishness among my readers and on my social media feed. Let me assure everyone that bear markets simply don`t start this way. SentimenTrader has an intermediate to long-term sentiment model called AIM "which averages the momentum of the four major sentiment surveys". This model...
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