Curent Cyclical Rally Entering Rarefied Air, Heightening Chances of Another Bad Ending, Though Timing Still Unknown
I’ve touched on this statistical subject a few times in the past and wanted to give an update on it. Last July we had this post showing the length of cyclical/secular rallies through history on the Dow. More recently we…...
How Gold’s Recent Decline Measures Up Against History
In the chart below I plot gold against its 2 Yr RoC. Though it stands at only -15% right now, come August/September when it will be lapping its August/September 2011 highs, its 2 Yr RoC will be ~-35%, assuming steady…...
SSEC Has Been a Major Under-Performer vs. the SPX, Will it Persist?
In the scatter-plot below I show the 2 Yr RoC for the SSEC (X-axis) vs. the 2 Yr RoC for the SPX (Y-axis). As of this morning they are -30% and +25%, respectively, with major SSEC under-performance occurring over the…...
Is Barron’s Call for a Credit Crisis in China Correct?
Two weeks ago Barron’s made what appeared to be a bold call for a credit crisis in China. They all but suggested that the probability of a Depression-style event was either rising or imminent. But, similar to their call to…...
Recent Divergence in Equity/Commodity Performance Not Atypical in Context of History
In the scatter-plot below I show the 2 Yr RoC in the SPX (Y-axis) vs. the 2 Yr Roc in the Continuous Commodity Index (CCI) (X-Axis) dating back to 1986. In the last few weeks the plot has been clustering…...
When will This Commodity’s Downside End?
Warming up to coffee given the historical tendency for downside to abate when the two year RoC (i.e,. price momentum) reaches the -55% level, as it is now. This is in contrast to our ardent bearishness on the product dating…...
Can Markets & Cycles Really be Timed?
I’ll get to the point – this is probably the best market timing tool I have ever seen or developed. More importantly, it’s the simplest. It’s something you can use on your own into perpetuity with a single, easy spreadsheet…...
Does Valuation Matter and if so, When from a Historical Cycle Standpoint?
I’ve done a few posts over the past few months on why this level of the Shiller P/E is so important. In a nutshell – this level of valuation historically acts as a switch either turning off more upside and…...
Market Nearly Perfectly on Track to Deliver 15% Median, One-Year Gain as Suggested Last August
On August 15 last year in this post we noted that if the market closed that week above 12,982 there was a 91% chance it would be higher one year later, with a median expected gain of 15%. The market closed…
Shiller P/E Suggests Any Additional Valuation Expansion Engineered by Fed Could Result in a Parabolic Move Higher for Equities
In the chart below note that the Shiller P/E currently stands at a line of demarcation. Historically, any further expansion in SPX valuations has coincided with parabolic moves higher and/or bubbles including the late 20s, mid 90s and the 2002-2007 global…...