Charting a Path to 45,000
We were very early to the Nikkei long and secular bull story, having first outlined the rough sketches of this call all the way back in June 2012, long before it was fashionable. We added greater depth and confidence to…
This Works
On 6/17 I indicated I liked the publishing industry as a source of alpha/out-performance. Fundamentally, this post was prompted by the 6/13 announcement that GCI would acquire BLC for a 30% premium and that this deal likely portended additional consolidation…...
Fair Value for the 10 Yr?
Risk-free, 10 Yr UST rates DO influence pricing on Aaa-rated corporate issues. As such, the Fed’s bond buying program of government securities has invariably pushed yields on Aaa-rated issues lower than they would be ex the Fed’s influence, resulting in…...
24-Year Support at Hand for This Ratio
The ratio of the Yen vs. Nikkei is at 24-year support line (1) below. Additionally, line (2) support is at hand. I would note that line (1) was not hit in May when the Nikkei peaked at 16K. Line (1)…...
Lower-Risk/Higher-Reward Spread Trade Idea Useful for Those Looking to Deploy Excess Cash Balances
In the following chart we show the ratio of the Nikkei vs. gold. Into its 2012/2013 low of ~5, this ratio had fallen ~90% from its 2000-era high of ~70. However, upon hitting 12.38 last week, note the ratio has…...
Though Down 30% in a Year, More Declines Likely in This Ratio
Since our 11/14 post highlighting the likelihood that the Nikkei would not experience another short-term, 20% decline and would instead begin to rally sustainably again into our long standing 45K-50K target, the index has rallied 450 bps. By comparison, the…...
Obscure Measure of Market Internals Pointing to a “Bull Treat”?
I’d like to think nobody has ever considered using the RSI of the ratio of XLP vs. SPX to gauge market internals and overall macro risk before. As far as I know, I’ve never seen anybody use or write about…...
More Thoughts on Global Equity Allocations
Over the past two months or so we have become increasingly bearish / less bullish on the U.S. from an intermediate-term cyclical standpoint. We first began questioning the remaining intermediate-term upside of this 46 month cyclical rally in the U.S. in…...
Recent Decline in Rates to Continue Near-Term but Likely to Reverse over Time
Dating back to July of last year I’ve advocated the idea that bond yields were nearing the end days of their secular move lower. Beginning in May of this year we explicitly began to communicate the precise end of that…...
Global Equity Spread-Trade Update
I want to reiterate my belief that Europe, like China, is set to out-perform U.S. equities moving forward. That thesis remains grounded in the chart below, which shows the ratio b/t the Vanguard Euro Vipers ETF and the SPX. The…...