Blog
The Bull Gently Sleeps: It’s Not Dead
Our working hypothesis is that the only constant factor in the stock market is human emotion, and that these emotions are imprinted in the market’s historical record as repetitive patterns.....
Market Similarities Continue to Form
It is well understood that no two markets are ever alike. Less well understood is the fact that all markets have similarities, and that some markets are more similar than others. The ‘Tech rally’....
The Bull is Just Resting
Last week, we presented the chart below which shows the long-term patterns of the Fed funds rate, the SPX, and the rate differentials of three parts of the yield curve.The pink areas, highlight....
Rising Fed Funds Rates Do Not Kill Bull Markets
It is easy to get caught up in the belief that the market is being guided by the geopolitical news; possible trade wars, American presidential Tweets (available every day, all-day), military....
Chaos is Not a Strategy
Chaos is not a strategy, it is a result. A result of poor (or non-existent) planning, a lack of knowledge and the inability to imagine your competitor’s point-of-view. The Donald never plans. He....
Narrow Participation: another reason we have not seen the end of this bull market
Last week we highlighted the fact that, despite having a flawed President in the White House, the fundamentals of the economy continue to be sound (at least for now). In the past, we have opined....
Despite Having a Toddler in Charge
Despite the chaos that the toddler-president is spreading around the world — causing the adult politicians on the plant to consider how they are going to correct (punish) the child’s aberrant....
Paving the Shoulders of the Road to Impeachment
Because of its relevance to this week’s political maneuvering in the U.S., we are reprinting {with updates in bold} our commentary from July 22, 2017. The Donald, because he doesn’t read much....
Fear and Fundamentals
The stock market and the economy are not the same thing. Sure, there are connections and feed-back mechanisms between them, but they do not track each other consistently. That is why classic....
The Fed Still Matters
The minutes from Yellen’s final meeting as Fed Chair (January 30–31), were released in the middle of this holiday-shortened trading week, and despite the market’s wild reaction on the day-of,....
The Drop
The DropWhen an object falls into a pond, the initial big splash quickly disappears, followed by several secondary disturbances before the water calms down. The unravelling of the “short....
A Correction Built on Volatility
We had been warning of a correction, and we pointed out that the longer it took for the correction to arrive, the more painful the losses were likely to be. The market had endured more than 400....
The Correction Arrives, But It’s Not a Bear
(As published on Feb. 3, 2018)The Correction Arrives, But It’s Not a Bear The Fed, having informed the market months ago, is now actively shifting from quantitative easing (QE), to quantitative....
A Ship of Fools Crashes into the Alps
Weekly SummaryA Ship of Fools Crashes into the Alps The first one on shore was Steve Mnuchin, who immediately strutted into the middle of the Davos globalization kumbaya and detonated his....
Does it Really Matter?
As of this writing, the US government has run out of funding and has shut down. To which we say, “so what? It doesn’t matter much to the markets, anyway”. Barclays shows (chart below) that there....
Will the Market Get What it Needs, or Simply What it Asked For?
According to FactSet, S&P 500 earnings are expected to increase 10.5% year-over-year, which is down from an 11.3% growth rate projected on September 30. The 0.6% reduction in the growth rate....
Mediocre, but Not Bad
The December employment report showed growth in almost all sectors of employment. Participation was positive:
employment/Population Ratio ages 25–54: Rose +0.1% from 79.0% to 79.1%.
The overall....
The 35-Year, and 35-Thousand Foot View of the Situation
Since it is the end of the year, we thought it would be appropriate to step back and take a super-wide view of the markets.Looking back 35-years or so, it becomes obvious that stocks have been....
Copper Changes Its Tune
Two weeks ago, we pointed out how the copper price and the Shanghai stock index had moved lower following the end of the National Congress of the Communist Party of China (NPC) (chart below,....
The Difference Between the ECB and the Fed
The European Central Bank (ECB) announced that it would be reducing its asset purchases from €60 billion down to €30 billion starting in January 2018. This, of course, means that the ECB will be....
Copper Speaks, We Should Listen
Because of its many industrial applications, copper has leading indicator status when it comes to the economy. Keeping an eye on the trend in copper can help confirm or invalidate economic....
The Bull Continues
This coming week has a busy line-up of events, the heaviest of which is the Tax legislation. The proposed changes to the tax code are a blatant tax-cut to the richest corporations and individuals,....
A Correction is Obviously Coming; Which is Why It Hasn’t Got Here Yet
We have consistently maintained that the stock market is in a long-term bull market and that the probability of a recession starting in the next twelve months is low. At the same time, we have....
Funny How Gold is Never Manipulated to the Upside
Last Friday, November 10, 2017, approximately forty-thousand gold futures contracts were dumped on the market, resulting in a $10 drop in ten minutes. Every time this happens, and it does happen....
The Fed, the ECB, and the Employment Numbers
Trump took the safe path, he kept the Bernanke/Yellen continuity in place by nominating Mr. Powell as Chairman of the Federal Reserve. This was a “safe choice” not just because Powell is unlikely....