Monday , June 17 2019
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Tag Archives: Market Analysis

Market outlook: is the S&P today just like 2007 or 2016?

Bears are saying “the S&P today looks just like 2007” while bulls are saying “the S&P today looks just like 2016”. In reality, the S&P today is most like 1967 (not quite what you would expect). Various technical factors suggest that the medium term is bullish. The short term is mixed, and such a politically-driven market environment certainly does not add to one’s confidence about making short term predictions. Focus on the data and facts. Don’t trade the news....

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June 14, 2019: leading indicators macro update

Instead of trying to predict when the economy will deteriorate in the distant future (which countless experts have tried and failed), we simply look for deterioration among the leading indicators. Instead of predicting the next 10 steps, we seek to predict the next 1-2 steps for the economy. Here’s a brief summary of the leading economic indicators we track Positive factors Labor market Corporate profits Financial conditions Loans High yield spreads Inflation-adjusted new orders...

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Investors remain fearful despite the market’s recovery. What’s next for stocks

The stock market has recovered most of its decline in May. However, sentiment remains pessimistic. Today’s headlines: Sentiment is still pessimistic despite the stock market’s rally Put/Call ratio spiked Short term interest rates are still collapsing Breadth made a quick recovery SKEW remains depressed despite the stock market’s rally VIX remains elevated despite the stock market’s rally Go here to understand our fundamentals-driven long term outlook. For reference, here’s...

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Global breadth remains supportive for stocks

As the trade war impacts the U.S. economy, global breadth remains supportive for stocks. Today’s headlines: Global breadth Defensive stocks outperforming Imports and exports hit by trade war Mortgage Refinance Index spikes Will the S&P catch down to oil? Is the NASDAQ short term overbought? Go here to understand our fundamentals-driven long term outlook. For reference, here’s the random probability of the U.S. stock market going up on any given day. Global breadth Over the...

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Is the S&P 500 making a very bearish pattern right now?

After a big 5 day rally, the stock market is stalling. Today’s headlines: Canary in the coal mine: small caps underperforming large caps NASDAQ’s breadth Interest rate cuts Crash pattern Job openings Tech’s surge Go here to understand our fundamentals-driven long term outlook. For reference, here’s the random probability of the U.S. stock market going up on any given day. Canary in the coal mine? While small caps outperformed large caps in the initial part of this December 2018 –...

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Smart money continues to trend higher with the stock market

The S&P fell 4 weeks in a row and has now rallied 5 days in a row. This has been a rather sharp reversal, which isn’t surprising given the current news-driven environment. Today’s headlines: Smart Money Flow Index continues to trend upwards. Bearish shooting star S&P’s momentum Corporate bond yields NYSE advance-decline line New highs expansion The S&P today is just like… Go here to understand our fundamentals-driven long term outlook. For reference, here’s the random...

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Market outlook: how can stocks go up when we’re headed towards a recession?

The common assumption is that bonds are screaming RECESSION right now, while the stock market refuses to hear it. This isn’t entirely true. While the stock market’s long term risk:reward is certainly not bullish, the economic data suggests that a U.S. recession is not imminent. Various technical factors also suggest that the medium term is still bullish. And lastly, the biggest short term risk is still trade war news. If this week demonstrated anything, it is that you cannot trade...

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The stock market made a strong reversal this week

After falling 4 weeks in a row, the stock market reversed upwards very strongly this week. Today’s headlines: S&P strong reversal Stocks:commodities ratio at an extreme S&P continues to outperform the Russell Citigroup Economic Surprise Index hasn’t recovered VIX and the S&P both went up today Copper and yields leading the S&P down? Copper down 8 weeks in a row Gold up 8 days in a row Go here to understand our fundamentals-driven long term outlook. For reference,...

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June 7, 2019: leading indicators macro update

Instead of trying to predict when the economy will deteriorate in the distant future (which countless experts have tried and failed), we simply look for deterioration among the leading indicators. Instead of predicting the next 10 steps, we seek to predict the next 1-2 steps for the economy. Here’s a brief summary of the leading economic indicators we track Positive factors Labor market Corporate profits Financial conditions Loans High yield spreads Inflation-adjusted new orders...

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The S&P is indecisive around its long term trendline

Today’s headlines: The S&P is indecisive around its long term trendline Household networth surge Sentiment is low Utilities and real estate are outperforming Gold:oil spike Gold rally Go here to understand our fundamentals-driven long term outlook. For reference, here’s the random probability of the U.S. stock market going up on any given day. The S&P is indecisive around its long term trendline The S&P 500 has been very indecisive around its long term trend, as...

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