A New Leg Higher? Or…

November 11, 2019|12:31pm

I’d like to start this week’s missive by wishing everyone a Happy Veterans Day and hoping that we can all take at least a moment to say a silent thank you to those who have kept our country safe for more than 240 years. Banks and the bond market have the good sense to be […]

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The Bear Camp Can’t Be Happy

November 4, 2019|4:52pm

Happy Monday and welcome back to the game; a game that must be a bit befuddling for the bears at this time. Think about it. Our furry friends would seem to have an abundance of firepower at their disposal. For example, there is the ongoing trade spat, which seemingly improving with China (or not, depending […]

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That Line In The Sand Again

October 28, 2019|4:28pm

Good day and welcome back to the land of blinking screens. Breakout or fake out? Despite the impeachment and BREXIT drama, the punk economic numbers, the trade war, the geopolitical issues, the Fed meeting and, of course, the ongoing earnings parade, this is really the only question that matters. In case you don’t spend your […]

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It’s All About The Parade

October 21, 2019|4:25pm

Good morning and Happy Monday. I’ve said it before, and I’ll say it again. With all of the issues, headlines, tweets, etc., it is a little surprising to see the S&P 500 sitting within a stone’s throw of an all-time high. Some will argue this is the market climbing a “wall of worry.” Others, such […]

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Current Market Concerns: The Good, The Bad…

October 16, 2019|4:27pm

In speaking with folks about the state of the stock market over the past week, it occurred to me that people’s views vary widely and seem to fall into one of three categories: the good, the bad, and the just plain ugly. Those seeing the glass as at least half empty are baffled by the […]

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Jumping The Gun But Looking Ahead

October 14, 2019|3:49pm

Good morning and Happy Columbus Day. While banks and the bond market have the good sense to take the day off, stock markets are open, and traders appear to be busy processing the latest headlines. In case you haven’t heard, it sounds like the White House may have jumped the gun with their enthusiasm over […]

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While We Are Waiting, Let’s Check On The Cycles

October 9, 2019|4:38pm

To be sure, the current stock market is focused on a couple key things. While this can clearly be placed in the Captain Obvious category, first there is the trade war. From a near-term perspective it’s this week’s trade negotiations. And second, there is the upcoming Fed meeting. Yes, yes, the economic data has had […]

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Models In Good Shape But Short-Term It’s All About The News

October 7, 2019|3:33pm

Good morning and Happy Monday. The headlines continue to drive the daily action with this morning’s weakness due to (1) news that the Chinese want to limit the scope of trade talks this week and (2) confirmation that there is at least a second whistleblower with a firsthand account of the President’s dealings with Ukraine. […]

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Assuming The Worst (Again)

October 2, 2019|2:56pm

Until yesterday, the thinking had been that the majority of the bad news was well worn. And the stuff that was new – i.e. the Dem’s Impeachment Inquiry – wasn’t likely to upset the apple cart to any great degree due to the assumption that a conviction in the Senate is a low probability bet. […]

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Despite The Headlines Bulls Hold On

September 30, 2019|3:22pm

One of the great things about spending time out in nature is you don’t focus on the intraday machinations of the markets nearly as much as when you are chained to your desk. This allows one to focus more on the big picture “state” of the market as opposed to the latest wiggle and giggle […]

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Let’s Continue to Give Bulls Benefit of Doubt

September 24, 2019|1:33pm

Greetings from the northern reaches of Yellowstone National Park. Although we’ve lived in “the west” for nearly 20 years now, my wife informed me earlier this year that we had never been to the nation’s first national park. “Let’s go this fall!” I replied. Of course this was before the trip to England and Scotland […]

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A Fistful of Reasons to be Optimistic

September 19, 2019|2:15pm

Despite all the worry, fear, and/or uneasiness in the markets these days, the S&P 500 closed Wednesday within spitting distance of an all-time high (0.63% to be exact). Not too shabby for a “hated” stock market, eh? Yep, that’s right, despite the global economic slowdown, the ongoing trade war, the unrest in Hong Kong, the […]

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The Message From The Models: Stay the Course

September 16, 2019|3:50pm

Good Monday morning and welcome back. Although I had every intention of “penning” a market missive last week and have an abundance of topics to comment on, a business trip to LA left me with little time to get anything written. My apologies for anyone missing my subjective take on the state of the markets. […]

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Monday Morning Market Model Review: Bulls Retain Possession

September 9, 2019|3:40pm

Good Monday morning and welcome back to the land of blinking screens. As long-time readers are likely aware, my weekly missive has been comprised of two sections. First, there has been my subjective take on the state and the drivers of the current stock market environment. And second, I have presented a summary of my […]

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Quick Take on The State of the Market

September 3, 2019|4:10pm

It’s been a hectic weekend and as such, I’m going to keep my subjective analysis of the market brief and let the indicators and market models do most of the talking this morning. However, since returning from our trip across the pond late last week, I have been asked a few times about my take […]

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We Don’t Need A Deal, But…

August 26, 2019|1:56pm

Greetings from York, England. We’ve just completed our driving tour of Scotland where I learned that a “dual carriageway” sign is a rare and welcome sight from the driver’s seat and that most of the “roads” in the Highlands (and rural England) are merely golf cart paths that aren’t really wide enough for 2 vehicles […]

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Has Anything Really Changed?

August 19, 2019|6:42am

Greetings from London. My wife and I are spending a couple weeks exploring England and Scotland, which so far has been, as the Brits like to say, “quite lovely.” Our visits to Westminster, Big Ben, Parliament, Buckingham, Kensington, Leeds Castle, Canterbury, Dover Castle and the local pubs, restaurants and taverns have been simply, “brilliant!” (P.S. […]

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About That ‘Message’ From The Bond Market

August 12, 2019|4:05pm

After five days of wild, news-driven swings in the stock market, where the action was dominated by escalating trade tensions, the threat of a currency war, and the possibility that the next U.S.-China meeting scheduled for September may not happen, investors can’t be blamed for starting the week with some questions. Not the least of […]

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The Indicators Suggest Weakness Should Be Bought

August 5, 2019|4:43pm

It’s been a hectic travel weekend and I’m still on the road. And with all the news flying around at the moment, I’m spending a lot of time analyzing the situation. As such, I’m going to let the indicators do the talking this morning. Weekly Market Model Review Now let’s turn to the weekly review […]

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How Do We Model For This?

July 29, 2019|1:49pm

As a risk manager, I try to find and/or create models for as many different market inputs as possible. For example, we have models for corporate earnings, monetary conditions, interest rates, valuations, the U.S. economy, commodities, the global economy, inflation, volatility, overbought/sold conditions, investor sentiment, market momentum, breadth, volume relationships, trends, cycles, leading indicators, lagging […]

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Is There Any Upside From Here?

July 22, 2019|3:04pm

Let’s review. The S&P 500 is just 5 days removed from its most recent all-time high. Central bankers around the globe are either cutting rates or getting ready to cut rates. Economic growth is slowing. Earnings in the U.S. continue to beat estimates (although the bar for the current season appears to be sitting on […]

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A Singular Mission

July 15, 2019|4:16pm

Good Monday morning and welcome back to the land of blinking screens. While there are many topics to discuss on this fine summer day (earnings, inflation, trade, economic data, etc.) I think we need to recognize that the most important topic and the topic that is driving the action in both the stock and bond […]

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What Should We Expect in the 2nd Half of 2019?

July 8, 2019|2:06pm

To be sure, Friday’s jobs report created some uncertainty in terms of traders’ Fed-expectations. While I can argue that the expectations regarding the degree and speed of anticipated rate cuts had gotten a little out of hand, the question of the day now becomes, what should we expect? As in what should we expect from […]

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How Can We Tell When The Next Big Bear Will Arrive?

July 1, 2019|2:07pm

Let’s review. The Fed is no longer the enemy. There is, at the very least, a cease-fire in the trade war between China and the good ‘ol USofA. Rates are low. Inflation is nowhere to be found. Earnings will likely set a record this year. The U.S. economy continues to chug along. And if one […]

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Lots of Inputs But Only One Real Focal Point

June 24, 2019|2:14pm

So many inputs, so little time for a Monday morning market missive. For example, there is a new record for the S&P 500. A new record for the amount of global debt sporting negative yields (now $13 trillion according to Barron’s). A new approach for many of the world’s central bankers. A new reason to […]

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Fed on Tap But Models Still Favor the Bulls

June 17, 2019|4:51pm

This week’s big news will likely come from the Fed meeting and/or the ensuing press conference with Mr. Powell. In addition, everyone on the planet is now watching the economic data for signs of weakness/recovery. And of course, any news on the trade front – such as the scheduling of an official meeting between Xi […]

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Things Can Change Quickly These Days

June 10, 2019|3:49pm

What a difference a week can make in this game, right? Last week at this time, the market was reacting in a rather hysterical fashion, of course, to news that the President was planning to use punitive tariffs in his quest to strike a deal on immigration with Mexico. At the beginning of last week, […]

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Which Message Is The Right Message?

June 3, 2019|1:47pm

There can be little argument that the stock market is a slave to the news at the present time. Friday’s surprise pronouncement that the President plans to use tariffs in a new way is exhibit A in this argument. Tweets go out. Threats are made. Uncertainty increases. Stocks are sold. Bonds are bought. Rinse and […]

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Punk Data Prevails

May 28, 2019|7:41am

It’s our last day of exploring the Greek Isles, so I’ll once again keep this brief. If you haven’t visited, I highly recommend a trip to Crete, a simply magnificent island with friendly people, gorgeous land/seascapes and lots to do and see. Oh and the seafood isn’t too shabby either! Looking at the big picture […]

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The Nuclear Option?

May 20, 2019|8:57am

Greetings from Mykonos, Greece. Since I am traveling with my wife and exploring the Greek Isles, I’m going to keep my commentary brief for the next couple weeks. One of the benefits of traveling abroad is you are removed from the daily machinations of the markets, which sometimes makes it a bit easier to focus […]

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Here We Go Again?

May 13, 2019|1:29pm

For those of you keeping score at home, the S&P 500 is in the midst of the second longest stretch without a 3% correction in the last 10 years (source: Ned Davis Research Group). Although the action was certainly exciting at times last week, that streak remains intact as the S& closed Thursday down just […]

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Tips From Real-World Wendy Rhoades

May 6, 2019|2:06pm

It was a very busy week/weekend as I first attended NAAIM’s (National Association of Active Investment Managers) annual conference. The conference was stellar, and it was great to hang out with so many like-minded investment professionals Sunday through Wednesday. I picked up some trading psychology tips from Brett Steenbarger, PhD, who was at one time, […]

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The Best Slowdown Ever

April 29, 2019|1:10pm

I’m not sure who I borrowed the title of this week’s missive from, but I think we all have to admit that this is probably the best recession/slowdown ever! Instead of the economy flirting with negative growth in the first quarter, which, if you will recall, had become the common expectation as the calendar was […]

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Is “Melt-Up” The Operative Word?

April 22, 2019|2:02pm

We’ve been talking lately about the idea that big hedge funds and systematic traders have been caught on the wrong side of the stock market’s recent run for the roses. The thinking is this fact alone could account for the lack of downside volatility and the relentless dip-buying that has been occurring this year. And […]

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About That “Retest” Thing…

April 15, 2019|1:48pm

Last week, we reviewed Marko Kolanovic’s research showing the positioning of hedge funds and systematic traders. The bottom line here is the equity exposure of these managers continues to be at very low levels relative to history. But with the stock market indices a chip shot away from all-time highs, the question is why are […]

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Is There More Upside Ahead?

April 8, 2019|1:54pm

Stocks closed at a fresh cycle high on Friday as the S&P 500 has been enjoying a 7-day win streak, which is the longest in 18 months. Don’t look now fans, but the venerable blue-chip index is now just 38 points or 1.3% away from its all-time high. And unless the upcoming earnings season provides […]

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It’s All About Expectations Versus Reality

April 2, 2019|1:19pm

One of the first headlines on CNBC.com after Monday’s closing bell read: Stocks gain 300 points, but why? The article implied that markets can’t seem to decide whether rising rates are good or bad. The author opined that just a couple months ago, stocks would have quaked at the idea of rates rising because the […]

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Does #GrowthSlowing Suddenly Matter?

March 25, 2019|1:31pm

One of my favorite sayings on Wall Street is, “Things don’t matter until they do. But then they matter a lot.” For example, the dueling issues of #GrowthSlowing and the flattening yield curve have been with us for quite some time now. In fact, we’ve known that global growth has been slowing for more than […]

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There Are Reasons For Concern

March 18, 2019|1:00pm

Well it’s official. As of Friday’s close (a close that was likely influenced by the quad-witching event and a handful of S&P index rebalances), the S&P 500 is now up +20.05% from the 12/24/18 panic low. Wow talk about a joyride to the upside! Along with the market’s surge higher, which, for the record, has […]

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A Constructive Pullback So Far

March 11, 2019|10:59am

The fact that stocks pulled back a bit last week shouldn’t have come as a surprise to anyone. The S&P 500 had enjoyed an historic joyride to the upside in a very short period of time. As in +19.2% in just 10 weeks. Along the way, stocks became overbought and sentiment got a little too […]

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A Picture Is Worth A Thousand Words

March 5, 2019|2:49pm

It is said that a picture is worth a thousand words. So, this week, I’ve decided to try and sum up the keys to the current market environment with a series of charts and graphs. I started out looking for five key charts. That quickly turned into ten. And before I knew it; I had […]

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The Message From Our Models: The Bulls Own The Game, But…

March 4, 2019|2:55pm

It was a busy weekend of birthday celebrations and important family events in my household (our youngest is moving into her first apartment!) and as such, I didn’t take the opportunity to spend a couple hours of quality time at the keyboard. While I’ve got a good start on a missive entitled “Twelve Charts Tell […]

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Understanding The Big Picture

February 26, 2019|3:41pm

One of the most important lessons I have learned about the business of investing is the drivers of the market action change over time. Sometimes dramatically so. It is for this reason that no one, I repeat, no one, has ever perfected the game for any length of time. You see, like golf, the conditions […]

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Models Say Bulls In Charge, But…

February 25, 2019|3:38pm

Each week we do a disciplined, deep-dive into our key market indicators and models. The overall goal of this exercise is to (a) remove emotion from the investment process, (b) stay “in tune” with the primary market cycles, and (c) remain cognizant of the risk/reward environment. In this process, we analyze our big-picture market models, […]

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The Stock Market Party Continues

February 20, 2019|2:26pm

The joyride to the upside in the stock market continued last week as the S&P 500 surged another 2.5%. If my calculator is correct, this means the venerable blue-chip index is now up 10.7% so far in 2019 and has put in a nifty gain of 18% since the December 24th panic attack. Impressive. What […]

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An Important Line In The Sand

February 11, 2019|2:26pm

On Tuesday, February 5 and again on Wednesday, February 6, the S&P 500 bumped into its 200-day moving average. While I’m not exactly sure why this particular indicator captures the attention of so many (there are a myriad of more effective trend-following tools readily available), the crossing of the 200-day is viewed as a big […]

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