Trust the Thrust, or Sell in May?

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 Trend Model update: Still cautious

My Trend Asset Allocation Model is a market timing model that has been running since 2013. While the model only issues buy, hold and sell signals for stocks, investors nevertheless need to make their own decisions on how much to buy and sell. Based on my out-of-sample signals, I created a model portfolio by varying...

A ZBT buy signal update

Mid-week market update: Today’s market action has a constructive quality to it. The S&P 500 managed to stage an upside breakout through 5500 resistance and fill the price gap just above that level. The latest development saw the index pulled back to succesfully test the 5500 resistance turned support       It’s normal to...

4 reasons to be cautious about the ZBT buy signal

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...

Sounding the all-clear, but for how long?

Mid-week market update: It’s time to sound the all-clear signal, as least in the short run. Both the S&P 500 and the equal-weighted S&P 500 have decisively staged upside breakouts through the falling trend line. The bulls have regained control of the tape.     The next resistance test is the 50% retracement level at...

60/40 in an era of American Unexceptionalism

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...

Torturing the data until it talks

Mid-week market update: Market internals are showing signs of a wash-out. Readings are normalizing after an extreme oversold condition against a backdrop of extreme fear. Stock prices should advance from here.   However, the S&P 500 just experienced a “death cross”, where the 50 dma falls below the 200 dma. Notwithstanding today’s negative surprises from...

Estimating downside risk

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...

Force Majeure

Just a quick update in a day with a fast moving market. Trump's tariffs are eliciting a reaction among key supporters and the real economy. Pittsburgh based Howmet Aerospace, a key supplier to Airbus and Boeing, declared force majeure on its contracts owing to the new tariff regime. Force majeure is a legal practice allows...

A big bear, or just a plain vanilla correction?

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...

Here’s what’s more important than the tariff announcement

Mid-week market update: The market approached Trump's "Liberation Day" tariff announcement all beared up. Trading desk surveys indicate that most retail and institutional market participants had reduced risk coming into the announcement, with outright bears outnumbering the buy-the-dip crowd by 7%.     While the ultimate outcome of the Trump tariffs will move markets, there's...

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...

Why the market won’t crash from here

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 anatomy of a pullback, a trader’s perspective

Mid-week market update: Everyone calm down. It's not the end of the world. A clear-headed approach is to analyze the roots of the pullback from the perspective of the positioning of different market participants. How each reacted, and what might come next.   First, U.S. equities were overvalued. It just needed a bearish catalyst.  ...

High drama at the 200 dma

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...

Tops are processes

I sounded a warning in late January about a possible long-term market top, based on a negative divergence of the 14-month RSI. It wasn’t a “sell everything” signal, but a cautionary sign of a topping pattern.     It is said that “bottoms are events, but tops are processes”. That’s because market bottoms tend to...