Here comes the sentiment flush

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...

Goodbye to June, hello September

Mid-week market update: In the wake of the hot CPI print and the doubts raised by members of the FOMC as shown in the minutes, such as: Some participants noted that the recent increases in inflation had been relatively broad based and therefore should not be discounted as merely statistical aberrations. However, a few participants...

How serious is the market’s trend break?

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...

Looking for inflation in all the wrong places

Last week, I suggested that even though Fed Chair Powell voiced a balanced view of inflation, a voting bloc of hawks (Waller, Bostic, Barkin, and Bowman) on the FOMC may be a key obstacle to the market expectations of a June rate cut. Indeed, Atlanta Fed President Raphael Bostic reiterated his view last week of...

Guideposts to a deeper pullback

Mid-week market update: The S&P 500 hasn’t seen a 2% pullback since the rally off the November bottom, but is a deeper pullback starting? Stephen Suttmeier at BoA wrote that the index is testing an initial objective in the 5200s, with further upside in the 5600s. This would be an ideal spot for the market...

The stock market’s Q2 challenges

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...

Lucy and the correction football

Mid-week market update: Since January, I have been saying that the stock market is extended and could pull back at any time. The latest conditions shows that the S&P 500 is consolidating sideways after pulling back from above its upper Bollinger Band. The stochastic has recycled from overbought to neutral, which is a tactical sell...

This bull run is nowhere near finished

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 investor’s cyclical mystery

Copper is a cyclically sensitive metal that was given the moniker of Dr. Copper, because it is said to have a Ph.D. in economics because of its ability to forecast global economic trends. Its recent breakout from a 10-month base excited a lot of people. Similarly, the turnaround in the relative performance of materials stocks...

It’s all about expectations

Mid-week market update: Four weeks ago, I published NVIDIA at the bat, in which I discussed the market expectations for leading AI stock NVIDIA ahead of its earnings report. NVIDIA came out with a strong report that exceeded Street expectations, and the stock reacted with a price gap the following day.     Fast forward...

The stealth breakout you may have missed

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 recycle amidst an elevated tail-risk backdrop

Mid-week market update: Marketwatch recently highlighted analysis from NDR which concluded that sentiment was extended and while it may make sense to be cautious about adding risk, it's too early to turn tactically bearish until readings recycle from an overbought condition.     I agree. I've been saying the same thing for several weeks. A...

A Hindenburg Moment for growth stocks?

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...

Doesn’t Fed policy matter to stocks anymore?

During Fed Chair Powell’s testimony to the Financial Services Committee of the U.S. House of Representatives, he said that it will likely be appropriate to begin cutting rates “at some point this year”. At the same time, he reiterated the message that other Fed officials sent to the markets that the Fed is not ready...

Mind the gaps

Mid-week market update: In the short run, how the market reacts after price gaps can be important clues to market psychology and direction. How quickly the market fills a gap is a measure of either strength or weakness.   As accompanying hourly chart of the S&P 500 shows, we have price gaps everywhere (upside gaps...

How gold miners could be a refuge from the YOLO and FOMO frenzy

I wrote yesterday that the stock market has been gripped by a YOLO (You Only Live Once) and FOMO (Fear of Missing Out) madness. I can suggest a possible refuge: gold and gold miners.   Gold prices recently made a fresh high last week, but the breakout was not decisive to be judged as unabashedly...

How to trade the YOLO and FOMO market

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 extended is this market?

Mid-week market update: I have said before that the stock market is extended in its advance and it could pull back at any time. How extended? Here is another metric.   Bollinger Bands (BB) are overbought/oversold indicators. If a stock or index rises above its 2 standard deviation BB. it is said to be overbought....

Did the NVIDIA-fueled rally exhaust the bulls?

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...

NVIDIA at the bat

Mid-week market update: The poem "Casey at the Bat" may represent an apt analogy for today's stock market (see Wikipedia entry if you're unfamiliar with it). Technical warnings signs had been appearing. The S&P 500, the NASDAQ 100, and the Semiconductors Index, which is a bellwether for AI-related plays, had all weakened and violated their...