Waiting for the consolidation to end

Mid-week market update: The intermediate term outlook that I've been writing about for the past few weeks hasn't really changed (see Get ready for the melt-up and Party like it's 1999, or 1995?). The stock market continues to enjoy a tailwind based on the combination of overly defensive investors and a growth turnaround which is leading...

Be patient

Mid-week market update: Is this the pullback and correction that I've been anticipating? If so, how far can it go? Be patient. Take a look at this weekly point and figure SPX chart. Is there any doubt that the intermediate term outlook is bullish?     While my inner investor remains bullish based on the intermediate...

Breakout or fake out?

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 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...

Buy the shallow pullback

Mid-week market update: After spending over two weeks in a narrow trading range, the SPX broke down out of that range yesterday and tested technical support at the 20 day moving average (dma), which was also the mid-Bollinger Band mark. At the height of the decline, the index had fallen 1% and the market was...

Get ready for the melt-up

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 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...

All systems flashing green for the bulls, but…

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 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 dangerously extended market, or a FOMO rally?

Mid-week market update: The SPX has staged an upside breakout to new all-time highs and indicators are looking overbought. Now the key question for traders is whether current conditions represent an extended market that`s ripe for a pullback, or does do these conditions represent a “good” overbought condition that accompanies a momentum surge, which leads to...

How to get in on the ground floor of a market bubble

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 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...

Hitting the Brexit trifecta

As I pointed out yesterday (see Brexit: LTCM or Lehman?), my Trifecta Bottom Spotting Model, which has shown an uncanny record of spotting short-term market bottoms. This model flashed an "exacta" buy signal as of Friday's close and it has now flashed a "trifecta" signal based on Monday's close. The model is based on the...

The VIX tail wagging the SPX dog

Mid-week market update: What's going on with the VIX Index? The VIX, which measures implied option volatility and a useful measure of "fear", spiked dramatically on Monday. While SPX did fall, the magnitude of the decline didn't match past VIX spikes. It prompted this tweet from Ryan Detrick:     Rob Hanna at Quantifiable Edges...

Buy the dip!

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 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...

Adventures in Option-Land

Mid-week market update: I like to monitor the option market from a sentiment modeling perspective because, unlike surveys which can swing all over the place, the option market is a forum where people are putting real money on the line. Even as the stock market has been slowly grinding upwards, the option market has been showing...

Get ready for a market of maximum frustration

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 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 Model is...

5 technical reasons to be bullish on stocks

Mid-week market update: As the US equity market consolidates its gains near resistance and all-time highs, I remain constructive on stock prices for the following five reasons: Momentum is positive Breadth is positive Bullish support from overseas markets Greed is fading, which is supportive of further gains Overbought conditions are fading (ditto) Momentum is positive I...

The correction is (probably) over

Mid-week market update: About two weeks ago, my inner trader turned cautious on the US stock market (see my tweet and subsequent post Tactically taking profits in the commodity and reflation trade). I had cited as reasons the weakness from China, the commodity markets and, later, Europe (see Waiting for the storm to pass), which was...

Three steps and a stumble?

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 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 Model...