This Industrial Company’s Break-Out from Two Years of Consolidation is Bullish, but Also Signals the Potential for a Similar Move in Broader Equities
In the chart below ITW has, as of today (if gains hold), officially broken out from a ~two-year consolidation/flag pattern b/t lines (1a) and (2a). The stock should be bought on this break-out. However, at the same time, note how…...
SPX Technicals Suggest Fair Value of ~1,400
Perhaps the simplest, yet most elegant way to think about fair value for the SPX is to view it through the prism of the long-term technical chart below. In that chart you’ll notice the index has traded in an upward sloping…...
The Federal Reserve’s Epochal Bubble-Creating, Cycle-Breaking Abilities
The Nasdaq reached a new all-time high in late-2014, surpassing the previous one it put in place in the early 2000s at the height of the tech bubble. This successful reclamation project was quite a feat – in accomplishing it…...
Has Russia Signaled the end of the Global Emerging Market Bear Cycle?
Over and over we have used the DJI over the course of 1904-1914 as an analogy to emerging markets (via EEM as a proxy) from 2004-current. Conversely, we’ve belabored the idea that 1937 and/or 1974 are the best analogies for…...
Massive Break-Out in Trade-Weighted USD vs. SPX Signals Intensification of Global Financial Stress
In the first chart below I show a scatter plot of the weekly returns in the trade-weighted USD (USTWBROA; y-axis) vs. gold (x-axis) dating back 20 years into 1995. The red dot is this week’s data point. Note that this…...
Channeling Wayne Gretzky
Over the past few months we’ve outlined in increasing detail and conviction within the site’s bear market category that the global bull cycle from 2009 had likely come to its end in 2015. The framework we’ve used in building that case…...
Ratio of Advancing vs. Declining Issues on NYSE Increasingly Washed Out, But Must Equity Prices Rise Sustainably as a Result?
Top panel below you’ll see a 10 day MA of the ratio b/t NYSE advancing vs. declining issues; bottom panel is a plot of the SPX. As of the Wednesday close this ratio printed 0.55. Dating back to the ~1987…...
SSEC Has Another ~20% of Additional Downside and is Likey to Remain in Relative Free-Fall
On the heels of our late Dec-15 post that suggested China’s depression was set to intensify in early 2016, I’ve updated that view via the SSEC plot below. The chart pattern over the past 18 months – base, large run…...
Nimr al-Nimr as Franz Ferdinand (Echoes of 1914 Update)
As far back as 7/23/15, three weeks before the CNH devaluation and a full four weeks before global risk assets began plunging, I laid out what I thought was a compelling case for the period of 2004-2015 for emerging market equities…...
Russell 2000 Finalizes Bearish Topping Pattern with Significant Breakdown to Start 2016
Per the chart below, with today’s material break-down in global equities, the Russell 2000 appears to have completed a major, bearish, head & shoulders topping pattern that has formed over the past two years. Similar patterns formed around the index’s…...