This week the cover of Barron’s had as one of its headlines “Time To Dump Stocks?” This should not be ignored. Having been an avid Barron’s reader for 3 decades, I would describe such headlines as… …not usually very timely, …frequently correct, …and usually a good indication of institutional sentiment. With that in mind, consider the fact that SPY, DIA and QQQ are all sitting on or near their 50-day moving averages, while the IWM is sitting just below its 200-day moving average. In short, every major index is at an inflection point that institutions tend to respect as good areas to dump or buy stocks. Last week’s market acti...
Current Position of the Market SPX Long-term trend: The uptrend should continue after pausing for a correction. SPX Intermediate trend: “An ending pattern appears to be in its last stages of completion. This should be followed by an intermediate term correction into October.” The correction has started. Market Overview: After the 20-wk (40-wk?) cycle made its low on 8/21 (date adjusted from 8/10), SPX started a counter-trend rally — or a b-wave, after the a-wave low of 2417, if you prefer — and there is no conclusive sign that this rally is over. Most of the short-term indicators are still biased upwardly, and until we break t...
While the financial industry remains divided over what precisely is the cause of the malaise that affects modern markets, characterized by plunging volumes and trading activity, record low volatility and dispersion, a relentless ascent disconnected from fundamentals, and generally a sense of foreboding doom, manifested by an all time high OMT skew – or record high price for crash insurance – as discussed previously… … it can agree on one thing: it has something to do with the interplay of QE, the artificial force that has disconnected market prices from values for the past 8 years, and ETFs, which as some prominent in...
“Greece, long Europe’s economic problem child, is trying to prove that it has made progress in its recovery efforts by announcing plans to sell debt for the first time in years. The proposed bond sale, the details of which were released on Monday, offered hope that Greece might at last be preparing to wean itself off the international bailouts totaling 326 billion euros, or about $380 billion, that it has relied on since 2010 to stay afloat. The sale is a pivotal moment in the painfully fought efforts of Greece to recover from troubles stemming from the financial crisis that began on Wall Street nearly a decade ago and that at one point...
Just a quick note on emerging markets. We’ve talked a lot lately about the extent to which EM credit weathered the storm a bit better than HY this month as Trump turmoil and heightened risk on the Korean peninsula catalyzed a bout of risk-off sentiment – or, perhaps more appropriately, “what counts as risk-off sentiment these days.” This is a pretty important dynamic to keep track of. Generally speaking, a lot of the jitters we’ve seen in August are tied to Donald Trump and it’s no secret that his insistence on pissing off lawmakers is creating considerable uncertainty around the fiscal outlook in the U.S. That, in turn, has wei...
Sometime a picture says it all. This week’s Market Outlook commentary is simply the observation you choose to find in this chart. All politics aside (although they are likely the driving force behind these trends). The chart illustrates the percent change trends of key markets since President Trump’s inauguration.In an effort to avoid misrepresenting the longer time frame which should include election day, that time frame is also included so you can see how the assets traded after the election. As you’ll read below, this week’s video is filled with some interesting market development from what may have appeared to be an uneventful wee...
The last few weeks have been quite turbulent for volatility traders with swings in the VIX of greater than 20% on several occasions. The roller-coaster ride in volatility indicated in the chart below identifies, however, real opportunity and not just implied opportunity. Timing volatility from the long side would prove to be difficult, but adding short positions into volatility spikes has proven more advantageous and with great capital gains. Having reduced my short exposure to volatility ahead of those rip-roaring spikes in the VIX, I was fortunate enough to recapture my short positions significantly higher than where I had covered. An...
EUR/USD: The pair remains biased to the upside after resuming its medium term uptrend the past week. Resistance comes in at the 1.1950 level with a cut through here opening the door for more upside towards the 1.2000 level. Further up, resistance lies at the 1.2050 level where a break will expose the 1.2100 level. Its weekly RSI is bullish and pointing higher suggesting further upside pressure. Conversely, support lies at the 1.1900 level where a violation will aim at the 1.1850 level. A break of here will aim at the 1.1800 level. All in all, EUR/USD faces further upside pressure medium term....
The top 9 cryptocurrencies of 2017, in terms of market cap, are visualized in this one chart. It is a 6-month chart, and it includes the start of the big rise of alt-coins in March of this year. It is amazing to see how strong most of these cryptocurrencies have risen. Interestingly, there is a diverse picture since June: Bitcoin, Ethereum, NEM, Dash corrected or consolidated, but are rising again, and look bullish. Litecoin consolidated but seems to be setting a series of higher lows now, and could be breaking out big time once it breaks above $55. Iota and Neo are consolidating their recent gains, and are preparing a sharp move higher or ...
Is There Alpha In Gender Disparities? The conventional wisdom for years, as this Harvard Business Review post exemplifies, has been that having more women as senior executives and directors would improve corporate performance. It appears that this may be untrue. I elaborate below, and discuss whether awareness of this may be a potential source of alpha. Background: What You Can’t Say If investing in companies with fewer women executives and directors were a simple way of finding alpha, you would figure you’d hear more about this. In fact, the first I heard this suggested was by Got News founder Charles C. Johnson, at a dinner in...