Revisiting the Defense Industry as the First-Ever Audit of the DoD Commences

Revisiting the Defense Industry as the First-Ever Audit of the DoD Commences

All the way back in this Oct-12 post I highlighted the defense industry and a few of its individual components, noting what I thought were theire overall bullish positioning vs. the broader market after a decent stretch of under-performance. Below I…...

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Searching for the EM/Commodity Turn

Searching for the EM/Commodity Turn

Below I plot the ratio of the PCAC Index (Producer Price Index – All Commodities) vs. the USD Index (DXY) over time along with a ~43-year support line dating back to 1973. While not at support, the ratio is very…...

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Semiconductors Poised for Out-Performance vs. SPX

Semiconductors Poised for Out-Performance vs. SPX

In the chart below I plot the SMH semiconductor ETF vs. SPY on a monthly closing basis. Note that it is breaking above line (1) and (2) resistance; line (1) dates back ~16 years and line (2) a decade.  This…...

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Increasingly Likely that the Past Year Has Been a Consolidation Pause Paving the Way for a Blow-Off Equity Rally

Increasingly Likely that the Past Year Has Been a Consolidation Pause Paving the Way for a Blow-Off Equity Rally

I increasingly struggle to find bearish historical precedents that line up with the market’s tone, tenor and structure over the past ~year. Though I was able to nail the collapse that came in Aug-15 right before it occurred and correctly saw…...

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Channeling Wayne Gretzky

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…...

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Time to Buy WMT after Recent Downside

Time to Buy WMT after Recent Downside

In the chart below WMT sits atop ~17-yr support line (1) after having witnessed a fair degree of intense selling YTD, with that downside accelerating in the past few weeks. The same selling has also brought it back down to…...

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History Suggests 2015's Volatility Is Just another Mid-Cycle Pause

History Suggests 2015’s Volatility Is Just another Mid-Cycle Pause

This week I spent some time updating a master market data spreadsheet I maintain that largely consists of Shiller’s historical data. In doing so I noticed that as of Feb of this year, the SPX closed 31% > its 48…...

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Working Thesis for 2015

Working Thesis for 2015

It’s that time again.  Time to put pen to paper and make our best attempt at crystal-balling the upcoming year.  If we had to name 2015 or give it a theme we’d probably call it “The Year of Capitulation”.  By…...

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The Next China Play

The Next China Play

Remember this post from September 2012? In it we suggested commodities were not the best way to play a resurgence in Chinese economic or financial market prosperity.  Instead, we suggested the following: “…we have higher conviction that global, U.S.-based consumer…...

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Buying this Mega-Cap Tech Stock

Buying this Mega-Cap Tech Stock

Very much in-line with our ongoing semi and MSFT thesis, be a buyer of CSCO. In the chart below the stock is breaking above ~13-yr resistance line (1) dating back to the early 00s. The height of the pattern formed…...

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