These are not my words, but those of Mr. Market, who is doing his best to let the central bank know that rates are too high. Chart 1, for instance, compares the market-driven 5-year yield to that of the Effective Federal Funds. The dashed green arrows indicate that, in 2021,... READ MORE
Global equities have risen for the last three weeks and now are at or just below key chart points. Chart 1, for instance, shows that the S&P 500 index ($SPX) is close to breaking above resistance in the form of its 2022–23 down trendline. In reality, that... READ MORE
Remember the wall-to-wall coverage concerning the FTX crypto collapse? It's a great example of why conventional wisdom and groupthink are usually wrong. The prevailing hysteria had most traders brainwashed into expecting further crypto collapses and price drops. The simple fact is that, the market had been anticipating trouble... READ MORE
In early February, I pointed out that five consistently correct long-term indicators had triggered primary bull trend buy signals. The article certainly did not represent good timing from a short-term point of view, as the market has been selling off ever since. Nevertheless, these indicators remain in the bullish camp.... READ MORE
There is a well-known saying going around Wall Street that, when the Fed hits the brakes, someone inevitably crashes through the windscreen. That obviously applies to shareholders and directors of Silicon Valley Bank (SIVB), though depositors, following a nail-biting weekend, are apparently off the hook. It also warns the central... READ MORE
Last May, I wrote an article entitled "Bitcoin Bubble Finally Bursts", where I laid out the technical case for substantially lower prices. It was partially based on the fact that the 18-month ROC had peaked from a level in excess of 200%. My research, featuring 26 case studies... READ MORE
Commodity prices are an imperfect but useful forecaster of consumer price inflation. A key secular trend indicator that I use for industrial commodity prices went bullish last year. Since then, prices have corrected. However, it makes sense to take the pulse of the commodity markets from time to time, in... READ MORE
We are all aware of the investment principle that it's time to buy when the news is blackest. Even knowing this, it's always difficult to step up and click on that buy button, because the problems seem unsolvable. Moreover, how do we know for sure that... READ MORE
The US Dollar Index ($USD) has taken a hit in the last few months, causing many commentators to cry "bear market." However, an examination of the long-term indicators doesn't indicate a consensus pointing in a southerly direction. Neither is there unanimity that the recent setback represents... READ MORE
Every business cycle has an inflationary and deflationary part to it. And if you know the prevailing phase, it can be enormously helpful. For example, when inflation is dominating, it's usually a favorable environment for commodities and commodity defensive sectors, such as mining and energy. At such times,... READ MORE
I have been negative on the market for some time. I believe that it's a wiser policy to wait for the long-term indicators to turn bullish, rather than trying to capture every twist and turn of those bear market rallies, pregnant as they are, with false breakouts and... READ MORE
From the financial crisis in 2008 until October of last year, the U.S. stock market handsomely outperformed the Dow Jones Global Index ($DJW). However, recent price action suggests that this relationship may be about to change. Stated more accurately, U.S. relative performance may have peaked last October, just... READ MORE
In the last couple of weeks, I've had a couple of conversations with clients asking how I go about selecting promising sectors, even when not much excites me at the moment. To start with, I'm a believer in the principle that the character of short-term moves—... READ MORE
Most of the time, the major indexes move in tandem. Occasionally, they'll throw up positive and negative divergences that technical analysts can use to better identify important trend reversals. Today, we will look at two market averages whose 2022 price action has resulted in completely different potential chart... READ MORE
I don't usually get into individual stocks, but, back in August, I found Tesla's price action to be quite interesting. That's because I felt the stock, along with its fearless leader Elon Musk, were important icons of the 2020–2022 phase of the post-financial... READ MORE
Statistically speaking, the last half of December is the best seasonal period of the year, part of which serves as what is popularly known as the Santa Claus rally. The first half of the month also has a slight edge to the upside, though that has not worked out so... READ MORE
One of my favorite chart lists is one called Interasset Ratios. As the name implies, it contains a library of charts that plot various long-term relationships between asset classes, such as the stock/bond ratio, bond/commodity relationship, and so forth. It's not something you want to focus... READ MORE
The price of gold has been on a tear recently, bouncing sharply from its October low. Â It could be a good time to see whether this is the start of a new bull market or just a flash in the pan. Let's begin with the big picture and... READ MORE
To many, October represents the low for the 2022 bear market and what we are seeing today is the first leg of a new bull trend. After all, interest rates have probably peaked, inflation is dying, supply chain problems are over and so is the pandemic. Looking Closely at the... READ MORE
Last May, I wrote an article entitled "Bitcoin Bubble Finally Bursts", where I laid out the technical case for substantially lower prices. It was partially based on the fact that the 18-month ROC had peaked from a level in excess of 200%. My research, featuring 26 case studies... READ MORE
Last week, I wrote that the dollar and commodities were poised at inflection pointsand we should be on the lookout for an important move in both. The U.S. Dollar Index ($USD) obliged with the completion of a head-and-shoulders top, as shown in chart 1. It's clearly overstretched... READ MORE
The Dollar Index has had a good run to the upside, but is starting to show some possible signs of fatigue. That potential weakness could take the form of an actual reversal in its primary uptrend, or an intermediate counter-correction. At the same time, commodities, which often (but certainly not... READ MORE
Last time I reviewed the stock market, many of the Indexes had just experienced a bullish outside bar (see chart for the DIA). Since several of the oscillators had reached oversold readings, the idea of a rally seemed appropriate. By the same token, its important to remember that there is... READ MORE
When I am looking at a downtrend of a specific market that has been in existence for a while, I often ask myself which components might be on the verge of an upside breakout and could therefore lead it higher. Conversely, I have to ask if there are any downside... READ MORE
Last week, I suggested that some unusually bullish outside bars, in conjunction with positive short-term momentum and a favorable seasonal going into year-end, could trigger a worthwhile rally. That does not make me wildly bullish, because I still think we are in a bear market. When my long-term indicators turn,... READ MORE
Thursday's price action began bearishly with the probing of recent bear market lows. By the end of the session, the DJIA, along with several other markets, totally encompassed Tuesday's trading range and then some, in a one-day pattern known as an "outside day". To... READ MORE
Just when it seemed that oil was peaking, OPEC breathed new life into the commodity this week by threatening a sizeable production cut. That does not change the overextended nature of the longer-term indicators. Nevertheless, it does hint that oil prices and their related stocks may be on the verge... READ MORE
Polls show that the number one issue with voters is inflation, but some intermarket relationships are signaling otherwise. I am not saying that inflation is about to be wrestled to the ground, but it goes in waves, as you can see from Chart 1. Also, once prices go up, they... READ MORE
The relationship between the stock market and money market interest rates is as old as the hills. The "hills," in this case, go back to 1900 and before. The concept rests on the idea that, at the beginning of the cycle, when the economy is falling like a... READ MORE
It is a well-established fact that the dollar and oil prices move in opposite directions, most of the time. Perhaps a more accurate way of saying the same thing is to observe that a rising dollar acts as a headwind for energy prices, while a falling one acts a tailwind... READ MORE
This may seem like a foolish title, given that the Fed could be about to raise short-term interest rates by as much as 75 basis points in September with further, but smaller, hikes following that. However, bonds revolve around the business cycle in a chronological sequence, as do stocks and... READ MORE
The big daddy of all market trends is the secular or very long-term one, and it's about to have a big influence as to whether the June low will hold, meaning prices are about to reach new all-time highs, or if we are going to return to a... READ MORE
Back in June, I wrote an article entitled Are Commodities Losing their Mojo?It drew attention to the fact that some long-term indicators were pointing to at least a temporarypull-back in prices. That process is already underway, but the article also pointed out that energy usually lags other industrial commodity... READ MORE
It's a Primary Bull Market for the Dollar Chart 1 shows that the US Dollar Index is very much in a primary bull market, having violated a (dashed) secular down trendline a few months ago and, more recently, completed a 7-year rectangle formation. The green-shaded areas identify those... READ MORE
The summer rally has enabled several indexes to push through important resistance, but, since there was a lot of backing and filling at higher levels earlier this year, there are several places where even more resistance is apparent. If you want to be bullish, for instance, take a look at... READ MORE
The rally since mid-June has taken several indexes back to their extended breakdown trendlines, which mark one demarcation point between bull and bear. Chart 1, for instance shows that the NASDAQ completed a top in May and then followed through with further weakness. By mid-June, the Index found a bottom... READ MORE
This week, we diverge from our normal chart talk to focus on the economy, as the word "recession" is now on virtually every one's lips, provoked by a lot of misinformation. First, there seems to be a general understanding in the media that the definition of... READ MORE
Due to its sensitivity to interest rates, housing has the greatest average lead time going into recessions than any other economic (as opposed to financial) indicator. For that reason alone, it is worth examining amid the constant talk of recession. The HMI vs. Housing Starts Earlier this week, two important... READ MORE
In late April, I wrote that bond yields had run into resistance and a pause in the on-going uptrend was likely. Yields on longer-dated maturities initially moved slightly higher, but are now at approximately the same level as that April article. However, more corrective activity appears likely, as commodities (e.... READ MORE
Waterfall declines leading to capitulation are easy to observe and understand when we have the benefit of hindsight. However, they are almost impossible to identify ahead of time. One characteristic often associated with such uncomfortable price moves is an unexpected weakening of economic activity, where confidence literally falls off a... READ MORE