There was some consternation among equity bulls when the S&P 500 violated its 200 dma as it could have been the signal of a major bearish episode. Technical analysts offered some relief when they pointed out that it’s the slope of the 200 dma that matters. The historical evidence shows violations of the 200...
Mid-week market update: I told you so. As I recently pointed out, psychology had become too stressed to the downside, which opened the door to a relief rally. The NAAIM Exposure Index, which measures the sentiment of RIAs who manage individual investors’ funds, fell sharply last week and below its 26-week Bollinger Band. Historically, theses...
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: There was a lot of angst last week about how Treasury market, whose yields had been rising steadily, was the main driver of risk appetite. When I saw this cartoon circulating, I thought that it marked the top in yields as a contrarian indicator. Indeed, the bond market rallied when Bill Ackman...
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 bounce stalled at the 4380-4400 resistance zone, which is just below its 50 dma. I continue to believe that the next major move is up. Here’s why. Bond market tantrum Stock prices have been affected by the tantrum in the bond market. The price 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...
Mid-week market update: This relief rally from last week’s lows has been stunning. The stock market shrugged off a hot employment report, a Middle East war that could set off an oil price surge, and a hot PPI print this morning to rise 3.5% off last week’s lows. But it may be time for 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...
Mid-week market update: You know things are bad when 1987 parallels come out of the woodwork. The key difference is the Fed and the USD. In 1987, the Fed implemented a series of inter-meeting rate hikes to support the USD. The USD needs no support today. During these times of market stress, it’s...
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...
I highlighted a long-term buy signal in late July and early August when the monthly MACD of the NYSE Composite turned positive (see On the verge of a long-term buy signal and Trust (the bull), but verify (there’s no recession)). Historically, such buy signals have resolved in a bullish fashion with no bearish episodes and...
Mid-week market update: On the weekend, I stated that my base case was the S&P 500 decline would stop at August low support of 4350, but there was a 25% chance that it would test the next trend line support at roughly 4200, or the 200 dma. Now that we are nearing that level, what’s...
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: It was a hawkish pause. The Fed’s decided to leave rates unchanged, but in the Summary of Economic Projections (SEP), it acknowledged that the economy is strong than its June projections. More importantly, the Fed Funds target for the end of this year remains unchanged, indicating that FOMC members expect another quarter-point...
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: Instead of just focusing on the U.S. market, I offer these two mystery charts of EM markets. One is a contrarian play, the other a momentum play. Mystery charts revealed The top chart, the contrarian play, is MSCI China relative to MSCI All-Country World Index Ex-US. The latest BoA...
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 I give seasonality only passing importance in trading, it is well known that September is seasonally negative for S&P 500 returns, which Callum Thomas recently documented. Can the stock market escape the negative seasonal pattern in 2023? More downside potential Looking under the hood, market internals 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...
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