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
Yield inversion and the megaphone. Danger signs?
Here we go again. The SPX, despite its rally to new highs in late July of around 3025, has had more trouble breaking through 2950. It’s hit that level twice in the past. Looking at the chart below, you’ll see a failed attempt at or near 2950 back in October of 2018, and then again Read More
Neartermed volatility up on “TTT” (Trumps Trade Tweets)
I simply had to share this meme with my readers today. Seriously funny stuff. As Homer Simpson (The Simpsons) once said, “Its funny because its true!”. I agree. Certainly, Trumps Tweets do seem to be throwing the markets around quite a bit lately. Seriously, sometimes I feel he needs an editor to walk beside Read More
On the one hand….
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
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