Are negative divergences necessarily bearish?

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...

Why this AI bull is nothing like the NASDAQ in 2000

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...

Correction imminent?

Mid-week market update: I am sure everyone has seen the breadth divergences. Even as the S&P 500 rises to all-time highs, different versions of the Advance-Decline Line are struggling. Breadth deterioration is evident the further down you go in market capitalization.     The breadth divergence can also be observed in falling correlations between stocks...

Get ready to buy in May…

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 told you there would be volatility

Mid-week market update: I told you that there would be volatility (see Numerous wildcards add up to ST volatility). In light of signs of stretched positioning, the prudent course of action for traders is to step to the sidelines.     Here are the different sources of volatility that are buffeting the markets.    ...

Numerous wildcards add up to ST volatility

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...

What are the contagion effects of China’s wipeout?

The problems keep piling up in China. Weakening demographics, as her population shrank for a second consecutive year. Weak consumer spending. A record property downturn. Rising trade tensions.   The drip-drip-drip of these glitches culminated in a massive stock market wipeout as over US$6 trillion has been wiped from the combined capitalization of the Chinese...

The market’s upper BB roller coaster ride

Mid-week market update: The S&P 500 has been riding its upper Bollinger Band. Historically, upper BB rides haven't been all that bearish, but the current episode is occurring against a backdrop of negative RSI divergences.      While the S&P 500 may be on an upper BB ride, it promises to be a roller coaster....

Exhausted bears, tiring bulls

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...

Beware of the riptide market

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...

A time for patience

Mid-week market update: There is a time for an aggressive posture in positioning and there is a time for patience. This is a time for investors to be patient.   In the aftermath of the rally off the October bottom, the S&P 500 is consolidating its gains after breaking out through resistance at 4600 to...

A pause that refreshes the uptrend

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...

What growth stock price action reveal about rate expectations

The S&P 500 staged an upside breakout in December through a cup and handle pattern but it was rejected at all-time-high resistance, which is a somewhat disappointing development.     Instead of worrying about whether it can rally through resistance, here is another index that staged a cup and handle breakout, but to all-time-highs. It’s...

A bull market with election year characteristics

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...

What traders and investors should think about in 2024

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...

Will we see the Santa rally this year?

Mid-week market update: The recent stock market rally has been astounding. Sentiment readings on the Fear & Greed Index surged from extreme fear in October to extreme greed in less than two months. While extremely fearful sentiment can be useful buy signals, extreme bullish sentiments are condition indicators and inexact sell signals. This leads to...