Mid-week market update: Four weeks ago, I rhetorically asked in a post, "Who's Left to Buy?" The BoA monthly Global Fund Manager Survey had shown cash levels at a 15-year low. In addition, a Schwab survey of customer accounts showed cash at similarly historical lows. It was the case of an accident waiting to happen....
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: 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. ...
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 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...
Mid-week market update: The S&P 500 fell yesterday and briefly kissed its 200 dma while flashing a positive divergence on the 5-day RSI. Was that the bottom? Here is a lesson on how to spot market bottoms, and a review of bottom spotting indicators. Condition indicators First of all, RSI...
Mid-week market update: Is the correction over? The S&P 500 was down -3% on a peak-to-trough basis. The 5-day RSI is severely oversold, which has signaled relief rallies in the past (blue circles). On the other hand, the percentage of stocks above their 20 dma is not oversold, which have been more definitive signals of...
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...
Callum Thomas of Topdown Charts recently argued for the emergence of a global cyclical rebound based on a synchronized central bank easing. Such a scenario of rising inflationary pressures is a signal of a renewal of cyclical rebound in demand. I have some sympathy to that view. I have been bullish on gold...
Mid-week market update: The results of the latest sentiment surveys argue that this is a time for caution. The BoA Global Fund Manager Survey shows cash at a 15-year low. The institutions are all-in on risk. Who's left to buy? A Charles Schwab survey of client accounts show that cash levels are...
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 latest update of Bloomberg Intelligence Market Pulse Index shows that it's at manic levels. The market seems to be ignoring tail-risk, which is an increasingly worrisome development. Inflation risk Stock prices have held up remarkably well in the face of worries about DeepSeek, Trump tariffs, geopolitics, and...
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: What should investors make of the market reaction to the trade war drama? The S&P 500 remains range-bound. The bulls will argue that the index is on the verge of an upside breakout from a bull flag (dotted lines), which is a bullish continuation pattern. The bears will argue that momentum is...
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 warned last week about a possible long-term sell signal from my market timing indicator, but I wasn't willing to front run my models as the month hadn’t ended yet. Now it’s happened. A long-term sell signal has been triggered. As a reminder, this long-term timing indicator buys when the monthly MACD (bottom panel)...
Mid-week market update: I know that I expected market volatility, but I didn't expect the immediate source of volatility to be anxiety over DeepSeek. I should have known better when my physiotherapist, who didn't know I worked in finance, started to talk about NVIDIA this week. You can tell a lot about the character...
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 S&P 500 has been in a steady uptrend for over two years and it just staged an upside breakout to an all-time high. It may seem counterintuitive to be discussing the risks of a major market top, but I am seeing some early warnings that few analysts are paying attention to. ...
Mid-week market update: Trump promised a flurry of executive orders to implement his campaign promises on the first day he took office. Amidst the flurry, the market breathed a sigh of relief as there were no major risk-off catalysts. The market is apolitical and it doesn't care about the reversal of DEI policies, or whether...
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