The “dumb money” indicator is now showing that investors are extremely bearish, and this is a bull signal. On average, the best time to buy is 1 week after the signal. Several caveats are worth noting.
First, about 80% of the signals will produce positive results within a reasonable draw down. What is meant by “reasonable”? The SP500 should bottom within 6% of next week’s buy point. If the SP500 drops [...]
NYSE volume was the 3rd lowest of the year so far (while ES was just below average) as stocks leaked lower all day to small net losses by the close. Financials led the drop in stocks as they start to catch up the credit market weakness we have been pointing to for over a week but while HY (the high yield credit spread index) continues to underperform (and stocks following at a lower [...]
By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — It was unrealistic to expect the 200-day moving average to forever support the stock market, of course.
But when it finally failed on Tuesday, it did so in a big way.
You may recall that the 200-day moving average had provided support on several occasions in mid June, and as recently as Monday of this week. On each of those [...]
Dear Extended Family,
Today’s markets are exactly what you would expect as we enter illustration number three of the Skier.
Economic statistics are taking a hard fall.
Without QE who will buy US treasury issues?
Without QE where is the basis of world equity markets?
Without QE what do you think the chart of unemployment will look like?
Without QE how do you think the camouflage of the insolvent balance sheets of the financial industry will [...]
Well, the Canadian government raised interest rates this morning which propelled the CD upward with lasting vigor to say the least. The U.S. stocks, Bobbsy-twin-to-the-CD. rallied in lockstep with the CD, as if the U.S. had been as wise with their monetary policy as Canada! Interesting bedfellows those to make! Bonds took a hit as a result, because asset allocation is in vogue again among the herd. Until, of course, [...]