Recipe for a Major Blow-Off?
Here’s an updated look at the 30-yr secular bear market analog showing the Nikkei’s path since its all-time high of ~40K in 1989 vs. 30-yr bears traced out by the same index 1920-1950 and silver 1980-2010. As I’ve said repeatedly,…...
Massive Decline in Commodities vs. U.S. Equities Since 2008 Remains a Key Big-Picture Paradigm
Depending on which index you use – SPX vs. DJI – commodities have fallen ~84%-87% vs. stocks since peaking in 2008, just as west-Texas crude touched ~$150 a barrel. I have discussed this reality repeatedly on the site over the…...
Making the Cyclical Long Case for Chinese Equities
Quick thought exercise: ownership of what asset is more anathematic than any other at the moment? Chinese equities! You can’t touch em’ with a 10′ pole. Can you name a single reason why you or anybody else should own them? This…...
Revisiting Tech Sector Outperformance Phenomenom
With a recent piece in Bloomberg highlighting the Nasdaq’s post-4Q18 out-performance resurgence, I thought I’d revisit the topic. Recall that back in Jul-2018 I noted that the Nasdaq’s run of out-performance vs. the SPX was nearing its longest/largest duration/magnitude in history. In retrospect,…...
Japan: Historically Cheap
I want to preface by stating I consider valuation analysis the least important part of process. It’s usefulness for calling a major inflection point in any asset class is or approaches zero. However, as part of a broader analytical tool-kit,…...
India: Best-Looking Equity Market in the World?
Below I plot the Bombay Sensex (BSE) Index going back to 1980 on the left, and 2001 on the right. The long-term view reveals that the BSE has performed excellently over time. It also reveals that it tends to make…...
Goldilocks 1950s-1960s Emerging as Most Likely Outcome for US Stocks?
Had a repeat of 1937 been on tap, the market would have followed through on last week’s ~300 bps decline with further weakness. It didn’t and instead, rebounded strongly. So, back to the drawing board. As you are well aware, I…...
FDR Redux?
Anchored off objective, definitive swing highs from Jul-33 and Feb-15 that went on to register one year “pauses”, we are approximately at that point in Aug-37 where the market, having made a significant retrace of its initial bear market decline…...
Global Commodities Hang by the Thread of 85-yr Support
Below, the Thomson Reuters Core Commodity Index sits atop nearly 85-yr support dating back to the early 1930s, specifically 1933. Even more specifically, the support begins in Apr-May-1933. This is what happened in Apr-May-1933. Support was last touched in late…...
Historic Rally Set to Take Place in USDJPY, Nikkei?
Below I plot USDJPY on a monthly closing basis dating back to the 1950s. Beyond the fact that the resistance is nearly 50 years old, it begins when Nixon abandons the gold standard in 1971 and runs atop the 1985 high that…