Published August 20, 2021
The following content from MarketWatch highlights the reason why we are model-driven investors. It is all too easy to get caught up in speculation about what markets “should do” and let that drive our investment decisions. We find it far more productive for our money to row with the market’s price trend, recognizing that market prices move up as well as down, and allowing ourselves the flexibility to pursue gains regardless of market price direction.
Published July 16, 2021
The stock market is in the midst of a correction, a pullback in price. With broad market indexes hitting new highs, this assertion sounds clearly wrong. However, look under the surface of those indexes and most stocks are going nowhere, with a sizeable chunk of them declining. (more…)
Published March 26, 2021
Market corrections are typically defined as a decline of at least -10%. But they can also be corrections “through time”. A case in point is the chart of Amazon below. After leading the way higher for stocks from the initial Covid-19 plunge, Amazon has traded sideways for the past nine months, correcting in time. (more…)
Published November 16, 2018
Stocks have brought smiles to the faces of technical analysts everywhere. Per the textbook, stocks rebounded right back to the underside of key technical reference points before selling commenced anew. That’s point number one for the technicians. (more…)
Published October 26, 2018
Below is a good post from Ben Carlson regarding the ability of the stock market to predict recessions. The data says the stock market is bad at such predictions, rising half or more of the time in a 3-6 month window ahead of the onset of a recession. So, if the stock market “looks ahead” by 6-9 months as we are often told it does, the market is no better than a coin flip in foreseeing recessions. It may not look ahead all that well is the point. (more…)
Published April 20, 2018
The bullish case for stocks rests on surging corporate earnings. The bearish case rests on fears of rising interest rates, uncertainty about trade policy, and a general hangover from a very strong 2017. Early on in the quarterly earnings cycle, companies are providing the strong results.
(more…)