David Chapman, another Technical Analyst and a man who I respect, noted in a newsletter that there are a number of factors that look pretty bearish for the stock market right now. These include: An expanding pattern on the NA indices (as I noted back in October) Inverting yield curves Negative yields on bonds in Read More
Checking under the hood
I spoke to a client the other day about how I look at markets by using a combination of trend and risk analysis. Trend is reviewed via the price pattern on a weekly chart, including volume and the 200 day (40 week) simple moving average. Risk, on the other hand, is evaluated using a compilation Read More
How low can it go?
The current market malaise just goes to show me that I shouldn’t take a vacation. Perhaps its my fault, in some strange way, that the market would stage a mini-implosion while I was enjoying a quiet northern Ontario week at the cottage. All hell broke loose while I was thinking less about markets, and more Read More
Sentiment speaks: looking for buy/sell clues
Anyone who follows sentiment studies will know that crowd sentiment is considered a contrarian indicator. When “everyone” loves a market or security –it’s time to sell. Conversely, if “everyone” hates it—it might be time to buy. Baron Rothschild once said that the time to buy is when the blood is running in the street. That’s Read More
Bear-o-meter flashes high risk signal
In June, we saw the Bear-o-meter flash a largely flat reading from its prior neutral reading in May. The indicator went from “4” in May to “3” in June. My, how things can change. We’ve seen a pretty dramatic move by the Bear-o-meter. Its flashing very, very bearish “0” right now. What this means is Read More
Overbought markets to be avoided (for now)
This blog is not going to appeal to longer termed investors, as I am going to address neartermed trading only. For those who do like to trade within shorter horizons, I am looking at some overbought markets that may deserve a pullback – and potential buy-in point later. I use a simple system to give Read More
Dow Theory signalling change?
There are 6 tenets of Dow Theory- originally coined by Charles H. Dow (1851–1902), journalist, founder and first editor of The Wall Street Journal and co-founder of Dow Jones and Company. The first three tell us that the market discounts all known information, that there are three trends in a market (up, down, sideways) and Read More
Trapped in a box
The SPX 500 and the TSX 300 indices seem to be trapped in boxes. The SPX is yet again testing its ceiling in the mid 2900’s. So too is the TSX as it struggles to blow through the mid 16,000’s. Both indices show an amazing commonality of divergences between the return to these old Read More
Enough to make your head spin!
Wow. The market sure is neurotic lately. Bullish, or bearish…its like the weather in Alberta. Albertans like to say “If you don’t like the weather, just wait a few hours – and you’ll get new weather!” Similarly – If you don’t like the current market trend – just wait a couple of weeks – and Read More
Bear-o-meter in no-mans land
If you examine the Bear-o-meter diagram, below, you will see 3 zones, represented as: Higher risk: 0-3 Neutral risk/reward 3-5 Lower risk: 5-8 You might say that the readings of 3 and 5 are a little indecisive. After all, they are right on the border of moving between two risk/reward zones. For example – Read More