Historical Cycle Analysis Update
This post looks at bull market cycle lengths through history. We define length as follows: 1) Cycle begins when Dow YoY goes to positive territory (at least +5%) from negative on a monthly basis 2) Cycle ends when Dow YoY goes…...
A Perennially Poor Market Timing Tool, Why is the Shiller P/E Ratio Critical all of a Sudden?
Take a look at the rolling 10 year average P/E ratio on the SPX below. It current stands at ~22.5x. What do you notice? Why has this level been so important in the context of history? Why is it that…...
Does the Macro Technical Landscape for Equities Include 10%-15% More Upside?
We plot the SPX and Dow in three charts below. In the weekly SPX chart on the far left, note the massive ascending wedge pattern b/t lines (1) and (2) – line (1) runs to the 1987 top and line…
Nasdaq is at a 12 Year High, What’s it Mean in the Context of History?
Last week the Nasdaq closed at 3,194. This marked a 12 year high. The index hadn’t notched a 12 year high in 674 weeks, or nearly 13 years. What’s that mean in the context of history? Well, because the Nasdaq…...
Historical Cycle Analysis – What Type is This & Where Are We?
The chart below plots the Dow since the late 1800s and includes its four-year rate-of-change (RoC). Why do I plot the four-year RoC? Through history, bull cycles have lasted 48 months on average, or four years. As such, I thought…...
Equity Analog Update
1987 vs. 2011 Crash Lows “Volatility” Analog 4th & 5th Consecutive Annual Gain Analog (including 1928) 4th & 5th Consecutive Annual Gain Analog (only 1988-1989 vs. 2012-2013)...
Working Thesis for 2013
Let’s just get this out of the way right up front – I was completely,unequivocally wrong to pivot to the “not-bullish / mildly bearish” camp late last week. I think it’s quite clear that the combination of Monday’s ~25 pt…
Re-Thinking the Proper Analogs & Trading Environment
This post builds off my previous email today in which I effectively drew a line in the sand and pivoted to the “not bullish / mildly bearish” camp. As I noted in that email, with the Dow down ~340 bps…...
Analog Update: You Can’t Stop this Bull, You can Only Hope to Contain it
Ridiculous title aside (which is a vague reference to the phrase I heard over and over again listening to commentators do play-by-play for the greatest athlete of all time growing up as a kid), could you ask for a better road…...
Houston, Do we Have a Problem?
Remember this post that had us wildly bullish a few months back given the statistical significance of its conclusions? Well, that analysis went into effect as of the week of 8/17/12, the week we received the signal. As of the…...