Systematic Model Update
On 8/20 we noted our systematic model had generated its first sell signal since March. We noted at the time the signal itself meant nothing until we started to see choppy price action and/or some big intra-day reversal(s). Clearly, into…...
A Decade-Long Under-Performer, this Industry Could Soon See that Trend Reverse
First chart is the ratio of the DJ Specialized Consumer Services Index (DJUSCS) vs. SPX. This index is a hodgepodge of sorts but includes education & training companies, which are this post’s focal point as a source of potential out-performance…....
TASR Up 20% in Three Weeks as Defense Industry Out-Performance Thesis Bears Fruit
On October 2nd we noted in a post that companies in the defense industry were likely to out-perform the broader market moving forward. In that post we stated the following: “…we would anticipate that defense stocks could out-perform for some…
Spread Trade Opportunity in Semis
The chart below plots the ratio of AMD vs. INTC. With AMD’s dramatic decline of late the ratio sits on long-term support line (1). A potential spread trade here would be to go long AMD and short INTC. The trade…...
Continue to Believe that China Can Remain a Source of Out-Performance
Historically we’ve focused this thesis on the idea that such out-performance would come via the SPX. That said, with a little bit more digging, the ratio charts below also suggest that the SSEC can out-perform the companies that have historically…...
Crude May Continue to Under-Perform Other Risk Assets Such as Equities
The chart below plots the ratio of crude oil vs. the SPX. Earlier this year the ratio broke support line (1) which dated all the way back to 1998 – in effect, crude’s nearly 15 year trend of out-performance vs….
Analog Update
Focusing on the “4th consecutive annual gain” analog in this post. Heading into 4Q12 the analog suggested the potential for an immediate sprint higher for the entirety of the quarter or weakness in its first half, followed by strength in…...
Despite Today’s Decline, Nothing Has Technically Changed with Respect to GOOG
We’ve been favorably disposed to GOOG dating back to early September as this post suggests here. Because we recently had a victory lap post reminding readers that this call had heretofore been the right one, it’s only fair that we point…
Set-Up in CAD$ Appears Unfavorable; Could Lead to Continued Softness in Crude, Out-Performance in Airlines
We find the set-up in the CAD$ unfavorable, both technically and from a sentiment standpoint. Technically, the FX finds itself facing very stiff resistance region (A) which marks highs dating back to 1972 as well as 2008/2011. At the same…...
If U.S. Bonds are the “Big Short” of the Next Decade, it Likely Means Japanese Equities are the “Big Long”
We got to thinking yesterday and came up with the chart below… It plots the ratio of the SPX vs. Nikkei against the 10 Yr UST price since 1998, when things really started going “global” with LTCM, the Russian FX…...