Published May 5, 2023
Markets continue to slog their way back and forth within a fairly tight range, bouncing between scenarios for a recession (or not), interest rate pauses from the Fed (or not), and just what is happening with the banks(!). Mixed signals abound. Despite corporate earnings coming in well above fears, the uncertainties noted keep investors from pursuing any consistent meaningful direction. (more…)
Published April 28, 2023
Below is Delta Research’s take on the current market conditions. Volatility has plunged from the bank crisis in March and is approaching the low end of its range for the post-pandemic cycle. Following Delta’s review, we post a more bearish, fundamental driven, outlook from Bank of America as an example of the type of bearish thinking Delta refers to. (more…)
Published April 21, 2023
Fidelity provided an update on where they see global economics this week. The nation’s largest administrator of 401k plans finds much of the world in late-cycle growth mode where credit gets tighter, earnings struggle, and economic growth slows. The next step is recession, which is what the vast majority of the economic watchers have been projecting for some time now. (more…)
Published April 14, 2023
Here at TimingCube, we begin by acknowledging that investing is a difficult endeavor emotionally; that human beings are mostly built to FLEE RISK and EMBRACE CERTAINTY. To be a successful investor, we are told, you must buy when others are fleeing and get comfortable with uncertainty – in other words, act completely opposite to what most human beings are hard-wired to do. We are told that the inherent volatility of the stock market is an OPPORTUNITY for you to buy low and sell high.
At TimingCube, we deal with this dichotomy between the design of human emotions and having to act seemingly against that emotional design by building quantitative models to REMOVE EMOTION from investing. By removing the emotion, we can use the model to give us more certainty and less exposure to risk, putting us in cash when markets are acting up and volatility is high. That pursuit of SAFE INVESTING is what we strive for. (more…)
Published April 7, 2023
Below, Schwab’s research group offers its quarterly outlook after a choppy first quarter that ultimately saw a strong rebound in megacap tech stocks while small-cap stocks went nowhere.
“There’s an old saying about Federal Reserve tightening cycles: The Fed “tightens until something breaks.” Cracks emerged during the first quarter of this year, as rising rates, tighter lending conditions, and shrinking liquidity weighed on economic growth. The banking system turmoil that emerged near the end of the quarter was an unsettling addition to investor concerns. (more…)
Published March 31, 2023
The stock market appears to have shrugged off the recent bank crisis and is ready to press upward. Does this mean the bear market is over? We have a couple of competing views below. First, Delta Research provides an overview of the market and reasons for the recent thrust higher. Second, Barron’s offers a warning. Third, we have a chart that supports both cases, depending on your perspective. (more…)
Published March 24, 2023
The struggle for markets to find an uptrend continues as the bank sector provides plenty of storm clouds, the near-term future of the economy is completely uncertain, and the Fed continues to fight the last fight (aka inflation). (more…)
Published March 17, 2023
The tumult over the past week+ in the banking sector has taken over financial markets. We are publishing two good overview articles of the action. Our view is simple: markets are prone to emotional outbursts swinging between fear and greed. Rather than get caught up in the emotions of the moment, we have long found it more profitable to distill market action down to a few simple inputs related to price and volume. Are market participants, in aggregate, buying or selling, and to what degree. Our models then take a position based on decades-long analyses of the price-volume data, a period incorporating very many emotion-driven markets, both up and down. (more…)
Published March 10, 2023
Though interest rates get all the headlines, changes in the supply of money can have substantial impacts on the economy and asset prices. Below is Delta’s analysis of changes in the supply of money and how that might impact inflation.
“The January money supply declined by 1.7% versus a year ago. Money supply (M2) is a measure of money including coins, currency, check and savings deposits, travelers checks and money market deposit accounts. This is both the biggest yearly decline and the first time ever it has contracted in consecutive months. The monthly rate of change has been falling consistently since mid-2021 when it peaked at a 27% growth rate. (more…)
Published March 3, 2023
While the stock market broadly has struggled the past month, there are underlying signs of strength. This is not currently a stock market where all boats are rowing in the same direction. (more…)