Published March 13, 2020
This week the stock market made it crystal clear that it is fully expecting a recession in the coming months. Markets have delivered the second fastest decline in history, second only to a drop during the Great Depression. (more…)
Published March 6, 2020
The stock market runs on narratives. The story of the 4th quarter was one of a Fed on hold while corporate earnings recovered and the trade tiff with China was mostly cleared up. Stocks pushed higher on that story until mid-January. The coronavirus upended the notion of a global economic recovery but initially had little impact on U.S. markets. (more…)
Published February 28, 2020
The old market adage that stocks take the stairs up and an elevator down was on full display this week. After months of marching ever-higher, with investors becoming more and more complacent about ANY risk, stocks finally found something to be truly concerned about. (more…)
Published February 14, 2020
Our Classic and Turbo Models speak in a very clear and simple language of Buy, Sell, or Cash (in Classic‘s case). The output is not shaded in any way to give us a sense that we are looking at a long, strong trend ahead, or just a brief burst of a trend.
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Published February 7, 2020
We were reminded again this week of the psychological power of central banks over today’s market participants. An announcement early in the week of new money(!) pushed into Chinese markets by the Chinese central bank (PBOC) made stock investors forget all about the potential global economic hurdle that is the coronavirus (with investor enthusiasm aided by a reduction in the spread of the virus). (more…)
Published January 31, 2020
We found the following article from Nick Maggiuli’s blog Of Dollars and Data to be interesting and hope you will also:
“Assume I flip a coin 5 times and get the following result (let H = heads and T = tails):
HHHHH
What is the probability that my sixth flip is also a heads (H)? Assuming the coin is fair (equal likelihood of heads and tails), you already know that the answer is 50%. Because coin flips are an independent process, prior flips have no bearing on future flips. (more…)
Published January 24, 2020
One of the oddities of the market so far in 2020 is the decline in interest rates. After rising in the latter half of 2019, interest rates appear to have rolled over and begun heading back down over the past month. While that’s not long enough to declare a trend, the behavior of interest rate sensitive sectors tells us that this is a significant shift. (more…)
Published January 17, 2020
Below we reprint a recent article from Charles Schwab analyst Jeffrey Kleintop outlining the possible risks to the current market uptrend. While the comments focus on the risks, we can also read between the lines and understand what the market’s expectations are – which creates the risks, of course. (more…)
Published January 10, 2020
Rarely has a +30% gain felt so lackluster. The year of 2019 closed with that substantial gain, one that registers in the top tenth of all market years. Yet those of us who watch the markets day-in, day-out and seek to follow the market’s trend viewed it as a play in three distinct acts, with only the final four months of the year delivering any real upside. (more…)
