CFNAI Suggests the Fed Has Destroyed the Market’s Discounting Mechanism Over Past Decade with Pay-Back Being Increased Volatility
Stepping away from the “only prices matter” meme for a second to highlight some more work on the Chicago Fed National Activity Index (CFNAI). Historically, when the rolling 3 month average of this index hits and/or dips below a reading…...
SSEC Finds itself at Another Important Support Zone as FXI Faces Resistance
All the way back on August 27th we noted the SSEC was in the process of breaking below long-term support dating back to 1994. At the time, we noted that while such a break was unlikely to be an incremental…
Some Additional Evidence that Suggests Fear Levels May Have Recently Become too High
More on the sentiment side of things today. The chart below shows the proportion of Rydex assets that sit in money market funds as vs. total assets at the fund family. The higher the %, the more people are fearful…...
Did Sentiment Get Too Bearish, Too Quickly Yet Again?
Had struggled to find anything that was suggestive of excess bearishness recently until stumbling across this last night, which I pulled from SentimenTrader. The chart below shows the net long or short position that Hulbert Financial Digest newsletter writings are…...
Analog & Systematic Model Updates
The chart below shows our 4th/5th consecutive annual gain analog updated for Friday’s closing value on the Dow. At its intra-day low on Friday the Dow had corrected ~830 bps off its mid-September high of 13,600 and at its closing…...
Some Key Risk-On Assets Reaching Support?
SPX, AAPL and Euro all approaching some type of relevant support. I find the combination of all of these approaching support levels interesting in the context of our analog work which suggests we should expect a near-term bottom in equities…...
Two-Month, 450 bps Sell-off in the SPX Apparently Now Enough to Ring the “Crash” Sirens?
We’re once again seeing notable calls or premonitions for some type of impending market crash. Tonight, ZeroHedge trots out such a call with the use of some analogs, apparently by way of Bloomberg and Citi. We are also on the…
Updating Our Downside Targets
Our assumed downside target of ~1,360-1,370 is quickly approaching per line (1) support and analog support against the 1988-1989 4th/5th consecutive annual gain moves. We would begin to slowly raise net long positions in equity indices as this level approaches…...
Analog Update: More Near-Term Downside Likely but Cyclical Outlook Remains Bullish
We’re updating our 4th and 5th consecutive annual gain analog in the charts below. First chart displays those years in history that have represented 4th consecutive annual gains. As we have often noted, including in our 10/24 analog update, if…...
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…...