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Tag Archives: Technically Speaking

Technically Speaking: Bulls Go Ballistic – Time To Reduce Risk

In this past weekend’s newsletter, we discussed the exceedingly deviated price and overbought conditions. When we combine the technical backdrop with the “bulls going ballistic,” it once again makes sense to reduce risk in our portfolios. “The rally from the October lows was a ‘sellable rally.’ The current rally is as well. Given the more overbought condition, we expect a one to two-week correction at the beginning of December as mutual funds make their annual distributions. While it is...

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Technically Speaking: S&P 3750 – Market Surges On Vaccine Hopes

In Mid-August, I posited a potential bullish run on the S&P index to 3750. For that to occur from the levels we discussed then, several things would have to happen. One of those was a “vaccine.” Yesterday, the market surged higher on news the Pfizer was close to delivering a COVID-19 vaccine. Such sent investors scrambling on hopes that a vaccine will set the course for continued economic recovery. In yesterday’s post, “Investors Ignore Evidence,” we discussed the problems with the...

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Technically Speaking: Rules To Navigate A Contentious Election

In “Policies Over Politics,” we discussed the markets’ historical trends during the presidential election years. That data mostly assumes the election process goes smoothly, and a President is declared quickly. However, in 2020, a very different outcome is likely as the surge in “mail-in ballots,” not to mention potential lawsuits, will delay the outcome. For this reason, investors need a clear set of rules to navigate a contentious election. Oversold Bounce In this past weekend’s newsletter,...

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Technically Speaking: It’s Coming. A Huge Bond Buying Opportunity.

Here we go again. After plunging to new lows, the calls for the end of the “bond bull” market mount each time rates rise. Is this time the end of the “bond bull?” Or, is there another huge bond-buying opportunity to come?  We recently reduced our exposure to bonds, the first time in years, due to the more extreme overbought condition of Treasury bonds following the pandemic’s onset. The long-term chart of yields below shows this to be the case. There are two critical points to take away from...

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Technically Speaking: Market Bulls Are “All-In” Again

“Corrections” generally occur over short time frames, do not break the prevailing trend in prices, and are quickly resolved by markets reversing to new highs. “Bear Markets” tend to be long-term affairs where prices grind sideways or lower over several months as valuations are reverted. I discussed this concept in the video below. [embedded content]

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Technically Speaking: Why This Is Still A Sellable Rally, For Now.

In this past weekend’s missive “Trump Infects Markets Bounce,” we discussed even though the market had bounced off support, we still consider it a “sellable rally,” for now. The comment generated quite a few emails, mainly since we also discussed that markets are generally positive in election years. To wit: “Lance, I am confused. On one hand you say that investors should use any near-term rally to rebalance risks. But then discuss how markets tend to be positive the majority of the time...

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Technically Speaking: Tudor’s 10-Rules To Navigate Q4-2020

In this week’s Technically Speaking, I wanted to review Paul Tudor Jones’ 10-rules and how to navigate the market for the rest of 2020. Due to a small surgery, I am out of commission this week, so I had to write this article on Saturday. The data is as of Friday’s close, but given we are looking at weekly and monthly charts, it doesn’t change the analysis. Recap As noted in “The Sell-Off Is Overdone,” on a very short-term basis, the recent correction has played out much as we suggested in the...

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Technically Speaking: Market Realized No Help Is Coming

Last week, we asked the question: “Is everything ‘priced in?'” On Monday, the market realized no help is coming as the political backdrop worsened markedly. However, we need to back up a little bit to discuss how we got here. In the middle of August, we wrote “Close But No Cigar,” which addressed the potential of a market correction due to the extreme positioning in markets. To wit: “With the markets overbought on several measures, there is a downside risk heading into the end of the month....

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Technically Speaking: Is Everything “Priced In?”

Is everything “priced in?” Investors have gone “all in” with a disregard for caution. But with markets extended and overvalued what should investors do now? As discussed in this past weekend’s newsletter, investors got even more speculative during the recent correction, which is the opposite of what you would expect. But if markets anticipate “good news,” then are there any “surprises” left? In other words, if markets have priced in perfection, then there is not a lot of room for...

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Technically Speaking: Why This Isn’t 1920. Valuations & Returns

Why this isn’t 1920 has everything to starting valuations and future returns. While, generally, I’m not too fond of comparisons between today’s markets and the past, Ed Yardeni made a comparison too bombastic to disregard in his blog: “We live in interesting, though not unprecedented, times. The Roaring 1920s could be a precedent for the Roaring 2020s. The good news is that the bad news during the previous precedent was followed by the Roaring 20s. So far, the 2020s has started with the...

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