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
Long-term indicators, such as the KST and the S&P relative to its 12-month MA, remain in a bearish mode, but, that said, it would certainly be unusual to see them turn bullish immediately after the final low. Indeed, Chart 1 shows that the Index is currently well below... READ MORE
Commodities have been on a tear since their lows set in the spring of 2020, but every news outlet you tune into these days is talking about inflation, gasoline in particular. That does not mean that prices cannot go higher. Over the long-term, that's probably a realistic scenario.... READ MORE
Prices often move in the opposite direction to the expectations of most investors and traders. In many cases, that happens because the latest news has already been factored into prices and market participants have already begun to anticipate the next development. For example, a group of institutions might like the... READ MORE
A couple of weeks ago, I wrote about the fact that the technical position of gold was extremely finely balanced, and that it was "Either in a Hard Place or a Sweet Spot". My conclusion was that its short-term position was improving and that the sweet spot scenario... READ MORE
It is possible for prices of individual asset classes to move in a linear up or down trend for an extended period. However, this rarely happens with inter-asset relationships, which rotate around the business cycle. As a result, it is helpful to monitor inter-asset relationships and their momentum to see... READ MORE
The long-term technical position of gold is extremely finely balanced and could easily tip into a full-fledged bear market, or start a new secular up leg to the bull trend that began in the opening years of this century. Chart 1 really says it all. First, it expresses gold adjusted... READ MORE
The stock market's recent sell-off has made the front pages and top headlines in TV broadcasts, and CNN's famous Fear and Greed Index has fallen to an extreme level of fear. My contrarian bones say it's time for a rally. Is that right? Yes... READ MORE
Chart 1 shows that the Invesco DB Commodity Tracking Fund could be on the verge of breaking out from a 3-month consolidation pattern. It also points out that the number of commodities participating in the rally has been narrowing of late. That's because the indicator monitoring a universe... READ MORE
I have written two articles about Bitcoin in recent months. The first,last December, concluded that "there are definitely some cracks appearing (in the technical structure), but a shrinking consensus of evidence continues to point to an uptrend." Thesecond, entitled "Has the Bitcoin Bubble Burst", noted... READ MORE
Chart 1 reflects the fact that some market averages are on the edge of a cliff, in the form of major support trendlines marking the lower edges of potential top formations. Another, such as the Russell 2000, has already completed a top and is edging below a subsequent trading range.... READ MORE
I'll get to the Fed element later, but, first, a few words on the Dow Jones Global Stock Index. Chart 1 shows that it has been experiencing a series of declining peaks and troughs since last November. That's not a bullish sign. Neither is the fact... READ MORE
A few weeks ago, I wrote a piece entitled "The Fed Raises Rates; What if it's Already Priced into the Market?". The idea was to point out that the Fed is a lagging indicator and that multiple bond yields had already reached mega resistance in the... READ MORE
I've been reading and hearing a lot about an impending recession, which reminds me of the saying that, when everyone thinks alike, everyone is usually wrong. That's not to say everyone is expecting a recession, but we may have reached a point where there is sufficient... READ MORE
In early December of last year, I wrote an articleon whether Bitcoin had reached the tipping point in terms of signaling a peak in the crypto bubble. Some may disagree about the "bubble" label; however, it seems to me that a financial category coming out of nowhere 10-years... READ MORE
In early December of last year, I wrote an article on whether Bitcoin had reached the tipping point in terms of signaling a peak in the crypto bubble. Some may disagree about the "bubble" label; however, it seems to me that a financial category coming out of nowhere... READ MORE
At the turn of the century, this ETF achieved a ten-timer, rallying from $4 in 2002 to $40 in 2008. It's been consolidating for the last 12 years and looks set to embark on a move to new all-time highs. It's not a tech stock, nor... READ MORE
Markets discount the future, so if the Fed tells the market it's going to raise rates, it goes ahead and raises them anyway. Why wait on the railroad tracks when you know a train is coming? Ironically, the widely-telegraphed rate rise has arrived at a time when bond... READ MORE
In October 2021, we made the case for a new secular commodity bull marketand concluded that this environment would likely spill back into the economy and stock market. That process is already underway, as the NASDAQ Composite was recently down 20% from its high, compared to a drop of 12%... READ MORE
Changing relationships between differing asset classes and markets do not speak that often. When they do, strong evidence that important changes may be afoot is often provided. One of the characteristics that has caught my attention since the beginning of the year is that, on one side, stocks been reacting... READ MORE
I've been bearish on the NASDAQ -- or, more specifically, on its relative action against the S&P Composite -- for about a year. Now that the financial press has announced that the Index, by virtue of passing the somehow magic -20% level, has "entered bear... READ MORE
The Business Cycle and Sector Rotation The business cycle undergoes a set series of chronological events which are also related to primary trend peaks in bonds stocks and commodities, as laid out in Figure 1. You can read about this concept in greater detail here. Based on the position of... READ MORE
Chart 1 shows that, starting in early 2020, stocks began to slowly but quietly underperform commodities. Since the start of this year, though, this trend has begun to really accelerate on the downside, i.e. moving in favor of commodities. The center window also shows that, when a lengthy trendline... READ MORE
Chart 1 shows that, starting in early 2020, stocks began to slowly but quietly underperform commodities. Since the start of this year, though, this trend has begun to really accelerate on the downside, i.e. moving in favor of commodities. The center window also shows when a lengthy trendline of... READ MORE
In a recent late January article,I pointed out that many market averages had fallen to key support levels at a time when a lot of them were experiencing selling climaxes. This kind of condition is usually followed by a rally or basing period, but I also noted that other... READ MORE
Since its August 2020 high, gold has been a very tricky market to call. Let me put it another way; it has been easy to call, but exasperatingly difficult to call correctly because of the numerous false breakouts that have taken place in the last 18 months-or-so. Monday's... READ MORE