Traditional bowling involves a “gutter” on each side of the lane. If you throw a bad ball, your ball goes into one of the two gutters. Bumper bowling eliminates that problem. Bowl a bad ball, and your ball bounces off of a bumper that sits inside of the gutter. A ball thrown too far to Read More
Damned if you do…
The Bear-o-meter is a risk/ reward indicator. It’s a compilation of indicators falling under general classifications of Breadth, Value, Trend, Breadth-momentum, Sentiment and Seasonality. The Bear-o-meter assigns risk on a scale of 0-8. A reading of 3 or under is generally a higher risk market. A reading of 3-5 is about “average” for a risk/reward Read More
Nothing to see here, folks. Move along.
Roughly every month, I try to post the results of a compilation of financial indicators that measure the current risk/reward picture for US markets. Long-time readers are familiar with this compilation, which I call the “Bear-o-meter”. For those new to my blog: The Bear-o-meter is a risk/reward measurement against the US markets. It is not Read More
Learning to walk
A reader sent me an email recently asking about a chart I had posted on a blog many months ago. Thanks to Paul in Calgary for inspiring the revival of this chart, which illustrates the period between 1997 to now. Scroll down to view it. You’ll note on the left side of the chart the Read More
Small capped setups
US small capped stocks may be on the verge of breaking out. The ishares Small capped Russell 2000 index ETF has been range bound since late 2018. That is, the Russell has been unable to put in a materially significant high since then. Meanwhile, the larger capped SPX index has been putting in higher highs Read More
Bear-o-meter shows excessive market optimism
Sentiment indicators are contrarian. Essentially, if market participants (particularly retail investors, aka “dumb money”) are “too” bullish, its something to be worried about. Sentiment indicators are quantitative measurements of investor confidence. They look at moneyflow statistics, and confidence surveys. They play off of the “Greater Fool Theory”–which essentially says that a stock, or any asset Read More
Is market breadth telling the true tale?
It is not the strongest of the species that survives, not the most intelligent that survives. It is the one that is the most adaptable to change. Charles Darwin I view breadth as a sign of a markets health. Traditional market breadth indicators are things like: New high/low indicators % of all stocks on Read More
FAANGs for nothin’!
In late 2017, I kept warning readers of this blog that the unprecedented low volatility, the obscene growth of the FAANG (FB, AAPL, AMZN, NFLX, GOOGL) stocks, and the length of time since a correction or consolidation were all signs of a likely slowdown. In fact, I wrote a blog on halloween that year outlining Read More
Bear-o-meter suggests current selloff is reducing market risk
Today’s blog is a little longer than usual. Please take the time to read its entirety. This one is important. I think things may be setting up for an opportunity in the markets soon, with one caveat. Read on… The Bear-o-meter is a risk/ reward indicator. It’s a compilation of indicators falling under general classifications Read More
It’s the economy, stupid: what an impeachment may mean to the markets
Today’s chart (courtesy of www.freestockcharts.com) focuses on two Presidential impeachment enquiries, and the market’s reaction to these events. I wanted to explore just how much impact an impeachment enquiry of President Trump might have on the stock market. Interestingly, both of these enquiries took place within a prolonged sideways market pattern. It should not escape Read More