A Trend Model Status Report My Trend Asset Allocation Model has performed remarkably on an out-of-sample basis by beating the 60/40 benchmark almost every year since inception. It outperformed a 60/40 benchmark while exhibiting 60/40 like risk. The Trend Model applies trend-following principles to a variety of global equity markets and commodity prices...
Mid-week market update: The stock market's weakness last Friday moved the Zweig Breadth Thrust Indicator back to oversold and reset the count for a ZBT buy signal. Monday's strong recovery was day 1, and we've seen three consecutive days of strong breadth. Have the market gods decided to give me a ZBT buy signal as a...
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 is the S&P 500 so resilient? Brent oil prices have breached the $100 level, but the index has only fallen about -7% on a peak-to-trough basis. The apparent divergence has led to a number of Street economists and strategists to call for a deeper pullback based on rising recession risk. From a top-down...
In the wake of Gulf War III, the odds of a U.S. recession in 2026 have spiked in the betting markets. Even though the implied recession probability has retreated, they are nevertheless elevated. Economic recessions are bull market killers. What are the chances of an oil shock-induced recession? Here are the bull and...
Mid-week market update: I wrote on the weekend that the Trump Administration was on the verge of a TACO (Trump Always Chickens Out) pivot. The market had the hint of a TACO on March 9, when he told CBS: “I think the war is very complete, pretty much”, but changed his tune hours later: “we’ve...
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...
Mid-week market update: The S&P 500 ETF (SPY) traded out a possible reversal yesterday (Tuesday) when it opened down, fell, and recovered to close higher on the day. The move was accompanied by a positive divergence on the 5-day RSI and on above average volume. These are all signs of selling exhaustion and a capitulation...
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...
Mid-week market update: The major U.S. averages have been range bound for weeks. The only exception is the equal-weighted S&P 500, which has been in a steady uptrend but it has yet to break out through key resistance (dotted line). The market is coiling for a move. As investors wait for the NVIDIA earnings...
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...
Mid-week market update: While the equal-weighted S&P 500 has been in a well-defined uptrend, which in intermediate-term bullish, other major U.S. equity averages have been mired in trading ranges, which reveal a degree of uncertainty about short-term direction. In addition, the VVIX, or the volatility of the VIX, remains above the 100 level indicating continued uncertainty....
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...
We should all have seen it coming. At the end of 2025, Time Magazine named its person of the year as “the architects of AI”. This was the classic example of the contrarian magazine cover indicator. As well, U.S. investors who watched the Super Bowl also saw a flood of AI-related TV commercials....
Mid-week market update: The delayed Jobs Report came in much higher than expectations this morning. The knee-jerk reaction in the pre-opening hours was risk-on, but the market reconsidered its view and pulled back after the open. Once again, the S&P 500 has failed to break out to the upside, though the equal-weighted S&P 500...
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...
Mid-week market update: In case you missed it, the dreaded Hindenburg Omen has reared its ugly head again. In plain English, the Hindenburg Omen is signaled when a market with bifurcated breadth sees a rollover in price momentum. Single day signals tend not to be very useful, but clusters of signals may foreshadow future drawdowns. ...
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...
I have been an advocate of holding a barbell position of U.S. large-cap growth and EAFE value stocks in equity allocations. More recently, the EAFE value portion has outperformed while the U.S. large-cap growth component has lagged. As a consequence, I am increasingly seeing questions of whether it’s time to rethink the allocation to U.S....
Mid-week market update: The S&P 500 achieved a fresh all-time high yesterday (Tuesday) and it touched 7000 today before retreating. President Trump posted about the event, did he jinx the market? Probably not. The Fed presented the market with a number of potential surprises. In the end, the Fed decision and the subsequent...
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