Current SPX vs. Tech Bear Nearing Longest in History
The SPX peaked on a relative basis vs. the Nasdaq in Aug-2002. Since then tech has dominated, with the SPX down ~50% on a relative basis since. The magnitude of the ~50% cycle decline since Aug-02 is huge and appears to…...
Oil Equipment & Services Have Never Been this Oversold in the Post WW2 Environment
Below I plot the 10-yr RoC in the FTSE Oil Equipment & Services Index along with the index itself. A decade is a logical period for look-back analysis and doubles as the anniversary of crude’s 2008 all-time high print of ~$145. I’ve…...
Equity/Gold Ratio Too Elevated, Suggests Heightened Risk of Mean-Reversion Event
In continuing the commodities > equity thematic that I’ve been building out on the site in recent months, this evening I dug into historical SPX/gold cycles. Specifically, I analyzed the three historical secular peaks in the ratio of the SPX/gold…...
Final Preparations and Focus for Nikkei Rally to 40K
As I recently did with my silver work, today we focus on the tactical aspects of our broader, more strategic call for the Nikkei to hit 40K this or next year, first outlined here and then here. Put simply, I believe…...
China Nears 25-Yr Relative Support vs. SPX as R2K Ascends to 30-Yr Channel Resistance
Below the ratio of the SSEC vs. SPX is nearing a 25-yr support line. That line sits at ~1.00 vs. the ratio’s current print of ~1.05. So, a few % lower. Knowing China, there will probably be some theatrics involved…...
Japan Likely the Biggest Beneficiary of Shifting Global Trade Winds
“They have no choice, they’re either going to make the trades fair…and if it’s not fixed we’re not going to deal with these countries.” – President Trump at G7 Those sound like fightin’ words to me and they were largely directed…...
Excellent Place to Lay Down Longs for a Trip to 30K?
In the context of this week’s cycle-based work here and here, consider the following more granular and technical aspects of how the thesis presented therein (DJI –> ~30K –> Aug/Sep-18) could unfold. Specifically, note that the market’s Nov-17 parabolic blow-off happened to occur as…...
US Equity Cycles: One Chart to Rule them All?
Below I update a ~120-yr chart of the DJI with its associated linear regression plot and two standard deviation channels first revealed in this post in Jul-17. Red = extreme over-valuation and secular sells; light red = over-valuation; light green = under-valuation; green…...
Winter is Coming
Having failed to put a new and final lower low in place in late May as I had expected, the DJI appears to have broken out of its falling resistance this week, potentially – and finally – fulfilling the end…...
Speed & Ferocity of Commodity Decline vs. Stocks Since 2008 is Historic
I’ve recently discussed the speed and ferocity of the relative decline in commodities vs. stocks since the former, via the CRB Index, peaked in 2008 vs. the DJI. At the ratio’s recent low in Jan-18 it had fallen > 81% vs….