Mid-week market update: The option market was pricing in a daily equity market swing of 1.6% ahead of today's events, namely the May CPI report and the FOMC decision. Even though the S&P 500 gained strongly today, the move could be said to be disappointing in volatility terms. The bullish tone was set this...
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 has risen to a new all-time high, and this move was well-telegraphed. I wrote on the weekend and characterized conditions "half-hearted buy signals that indicate low downside risk". The S&P 500 subsequently staged an upside breakout from a bull flag to a fresh all-time high. The...
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 Asset...
Mid-week market update: I pointed out on the weekend that it's not unusual for the S&P 500 to consolidate sideways after reaching its upper Bollinger Band before the market makes its next major directional move. There have been five other similar instances in the last six months. What's a little unusual about the current episode...
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: After the market reaches its upper Bollinger Band, it isn't unusual at all for it to consolidate sideways and drift for a few days before making the next move. As the chart below shows, this has happened four other times (grey shaded boxes) in the last six months. The latest episode 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...
The Dow, S&P 500 and NASDAQ Composite all achieved new all-time highs last week. It is said that there is nothing more bullish than a stock making a new high. This is not a time for caution. Higher stock prices are ahead. Here are the reasons why I am bullish. Bullish...
Mid-week market update: Now that the Dow, S&P 500, and NASDAQ Composite have risen to an all-time high on the back of a slightly softer than expected CPI report, and Keith Gill, otherwise known as Roaring Kitty, and the meme stock brigade is back, how frothy is this stock market? Just look at the surge...
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...
Artificial Intelligence (AI) related stocks have been on an absolute tear. The Magnificent Seven, which is one proxy for AI plays, has beaten the S&P 500 for six consecutive quarters. But the degree of outperformance is decelerating. This looks like the early stages of an AI hangover. I believe AI stocks are overhyped...
Mid-week market update: Bulls were disappointed when the Zweig Breadth Thrust buy signal didn't achieve its objective when the ZBT Indicator failed to rise from oversold to overbought in 10 trading days. But they received a consolation when it reached a late overbought reading on Monday, which was two days late. Do the...
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 big macro events of this week hasn't really moved the needle on risk appetite. The market didn't react much to the Quarterly Refunding Announcement detailing the schedule of Treasury issuance. The JOLTS report showed slightly weaker than expected job openings, but quits and layoffs declined as well, indicating a general deceleration...
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 market adopted a risk-off tone when headline Q1 GDP came in lower than expected at 1.6%, compared to an expected 2.5%. More importantly, core PCE rose at an annualized rate of 3.4%, which was hotter than expectations and led to stagflation fears. Upon closer inspection, nominal GDP growth was dragged down by the combination...
Mid-week market update: I presented this chart on the weekend and rhetorically asked if the inevitable market bounce would be durable. Since then, the S&P 500 rallied strongly off last Friday's oversold condition. In addition, the stochastic recycled from oversold to neutral, which is a tactical buy signal. Does this mean the relief...
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: I wrote on the weekend that conditions were setting up for a panic bottom (see Here comes the sentiment flush), but one final flush may be necessary to spark a relief rally. The S&P 500 has now achieved the milestones for a panic bottom. The stochastic is sufficiently oversold. The index violated...
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