Published 28 February, 2025
This week we start with a quick note about the sources of our weekly content since some of you have asked. We are trend-following mechanical/quantitative model investors. Since we are focused on technical analysis and the data behind the market, we often turn to other experts for analysis of the fundamentals of the economy, business, and markets. With few exceptions, those experts are money managers in charge of billions of dollars of assets, pension funds, mutual funds, hedge funds, et al. These are the types of folks who move markets. As a result, we take their views seriously and strive to present them without edit. (more…)
There is a natural tendency for investors to believe that the stock market will follow economic trends. What some people fail to realize, at least initially, is that investors are looking out into the future and the expected movement in the economy. Only when an economic datapoint shows up that is at odds with that expected outlook do stocks react. The Citigroup Economic Surprise Index (CESI) seeks to measure how those datapoints are matching up to what has been expected.