There is an adage on Wall Street that investors shouldn’t fight the Fed (or central banks in general), but the devil is in the details. Callum Thomas of Topdown Charts that global central banks are engaged in a broad-based easing campaign. The limited sample of the history of such episodes (annotations are mine) show...
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 continue to believe that the stock market is vulnerable to a setback. It's not just the negative RSI divergence, which is concerning, it's the inability for breadth to broaden out that's worrisome. As the accompanying chart shows, the equal-weighted S&P 500 to S&P 500 ratio stalled out at a relative resistance...
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 Fed hates to surprise markets, but for the first time in a long time, market expectations of FOMC action was highly uncertain. Is the Fed going to cut by 25 or 50 bps? On the weekend, the majority expected a 25 bps cut, but by Monday, it had shifted to 50....
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: As the S&P 500 struggles and regained its 50 dma, the corrective phase may not be over. Here are the challenges the bulls face. Narrow breadth The market rebound was accompanied by narrow breadth. Such a development could have negative implications for bulls who expect broadening breadth as...
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...
Now that the 2s10s yield curve has un-inverted, a review of sector leadership is showing bearish vibes. In particular, the relative performance of defensive sectors is turning up. I conducted an extensive sector and factor rotation review to determine the extent of the damage. Bearish vibes For the purposes of analyzing...
Mid-week market update: When I wrote on the weekend that the stock market was undergoing a prelude to a correction, I never dreamed that the S&P 500 would skid -2.1% on the first trading day in September to test its 50 dma. What happened? Unsatisfactory answers None of the conventional explanations...
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...
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 market almost flashed a Zweig Breadth Thrust buy signal this week, though there is some dispute over the calculations. As a reminder, a ZBT buy signal is triggered when the market rises from oversold to overbought within 10 trading days. According to StockCharts, the market never reached the oversold condition on...
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 wrote on the weekend that investors should watch for signs of an O'Neill follow through day for bullish confirmation of the rebound. A follow through day can occur as soon as day 4 (last Friday) of a rally. It’s defined as the index rising 1% or more on higher volume...
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...
After strengthening rapidly, the Japanese Yen (bottom panel) has stabilized has stabilized in the 140-150 range. The 10-year Treasury-JGB spread also stabilized and found support. So did the Nikkei Average after suffering the greatest one-day decline since the Crash of 1987. The Bank of Japan sounded a dovish tone when deputy governor Shinichi Uchida said...
Mid-week market update: Is the worst of the Japanese risk-off episode over? The Nikkei formed a bullish harami pattern when it recovered on Tuesday, but the recovery candle formed an "inside day" compared to Monday's massive downdraft. As well, BOJ deputy governor Governor Shinichi Uchida calmed markets and struck a dovish tone when he said...
Over the weekend, I wrote that risk appetite is at the mercy of the carry trade (see The carry trade as risk driver). I did not expect that the Yen would continue to skid badly and the Nikkei would crater by -12.4%, which is its worse one-day decline since the Crash of 1987. While correlation...
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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