Category Archive: 7) Markets

Main Author John Henry Smith
John Henry Smith
John Henry Smith of Grail Securities specializes in the U.S. stock market and offers a unique and powerful advisory service to private investors, institutional investors, and SME asset managers, who are seeking to consistently beat the market. All our strengths are at your disposal to provide stock market research and recommendations with the only aim of growing wealth. To achieve this we develop with you a customized investment strategy in terms of your risk and return preferences.

Global Turn-of-the-Month Effect – An Update

The “turn-of-the-month” effect is one of the most fascinating stock market phenomena. It describes the fact that price gains primarily tend to occur around the turn of the month. By contrast, the rest of the time around the middle of the month is typically far less profitable for investors. The effect has been studied extensively in the US market. In the last issue of Seasonal Insights I have shown a table detailing the extent of the...

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House View, May 2018

Pictet Wealth Management's latest positioning across asset classes and investment themes. In spite of a certain loss of momentum in positive surprises, a strong Q1 earnings season continues to justify our bullish stance on equities in most regions. We reiterate our negative view on core government bonds and remain short duration. Volatility is still higher than last year, and has increased noticeably in the bond market once again.

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The “Turn of the Month Effect” Exists in 11 of 11 Countries

I already discussed the “turn-of-the-month effect” in a previous issues of Seasonal Insights, see e.g. this report from earlier this year. The term describes the fact that price gains in the stock market tend to cluster around the turn of the month. By contrast, the rest of the time around the middle of the month is typically less profitable for investors.

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US Stock Market: Happy Days Are Here Again? Not so Fast…

Obviously, assorted crash analogs have by now gone out of the window – we already noted that the market was late if it was to continue to mimic them, as the decline would have had to accelerate in the last week of March to remain in compliance with the “official time table”. Of course crashes are always very low probability events – but there are occasions when they have a higher probability than otherwise, and we will certainly point those out...

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US Stock Market – How Bad Can It Get?

In view of the fact that the stock market action has gotten a bit out of hand again this week, we are providing a brief update of charts we have discussed in these pages over the past few weeks (see e.g. “The Flight to Fantasy”). We are doing this mainly because the probability that a low probability event will actually happen has increased somewhat in recent days.

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Repo and Repo Markets



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US Stock Market – The Flight to Fantasy

The chart formation built in the course of the early February sell-off and subsequent rebound continues to look ominous, so we are closely watching the proceedings. There are now numerous new divergences in place that clearly represent a major warning signal for the stock market. For example, here is a chart comparing the SPX to the NDX (Nasdaq 100 Index) and the broad-based NYA (NYSE Composite Index).

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Stock and Bond Markets – The Augustine of Hippo Plea

Most fund managers are in an unenviable situation nowadays (particularly if they have a long only mandate). On the one hand, they would love to get an opportunity to buy assets at reasonable prices. On the other hand, should asset prices actually return to levels that could be remotely termed “reasonable”, they would be saddled with staggering losses from their existing exposure. Or more precisely: their investors would be saddled with staggering...

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Stock Market Selloff Showed Gold Can Reduce Portfolio Risk

Stock Market Selloff Showed Gold Can Reduce Portfolio Risk. Recent stock market selloff showed gold can deliver returns and reduce portfolio risk. Gold’s performance during stock market selloff was consistent with historical behaviour. Gold up nearly 10% in last year but performance during recent selloff was short-lived. The stronger the market pullback, the stronger gold’s rally. WGC: ‘a good time for investors to consider including or adding gold...

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Market Efficiency? The Euro is Looking Forward to the Weekend!

As I have shown in previous issues of Seasonal Insights, various financial instruments are demonstrating peculiar behavior in the course of the week: the S&P 500 Index is typically strong on Tuesdays, Gold on Fridays and Bitcoin on Tuesdays (similar to the S&P 500 Index). Several readers have inquired whether currencies exhibit such patterns as well. Are these extremely large markets also home to such statistical anomalies, or is market efficiency...

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Seasonality of Individual Stocks – an Update

Readers are very likely aware of the “Halloween effect” or the Santa Claus rally. The former term refers to the fact that stocks on average tend to perform significantly worse in the summer months than in the winter months, the latter term describes the typically very strong advance in stocks just before the turn of the year. Both phenomena apply to the broad stock market, this is to say, to benchmark indexes such as the S&P 500 or the DJIA.

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Great Graphic: Stocks and Bonds

The relationship between stocks and bonds does not appear to have changed much. It is difficult to eyeball correlations. Question the meaning of a chart that has two time series and two scales and.

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US Stocks – Minor Dip With Potential, Much Consternation

On January 31 we wrote about the unprecedented levels – for a stock market index that is – the weekly and monthly RSI of the DJIA had reached (see: “Too Much Bubble Love, Likely to Bring Regret” for the astonishing details – provided you still have some capacity for stock market-related astonishment). We will take the opportunity to toot our horn by reminding readers that we highlighted VIX calls of all things as a worthwhile tail risk play....

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How to Buy Low When Everyone Else is Buying High

The common thread running through the collective minds of present U.S. stock market investors goes something like this: A great crash is coming. But first there will be an epic run-up climaxing with a massive parabolic blow off top. Hence, to capitalize on the final blow off, investors must let their stock market holdings ride until the precise moment the market peaks – and not a moment more. That’s when investors should sell their stocks and go to...

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Is This The Greatest Stock Market Bubble In History? Goldnomics Podcast

GoldNomics Podcast (Episode 2) Is This The Greatest Stock Market Bubble In History? In our second GoldNomics podcast, we take a look at one of the important financial questions of our day – is this the greatest stock market bubble in history? Listen on iTunes, SoundCloud and Blubrry. Watch on YouTube below

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Punch-Drunk Investors & Extinct Bears, Part 1

We didn’t really plan on writing about investor sentiment again so soon, but last week a few articles in the financial press caught our eye and after reviewing the data, we thought it would be a good idea to post a brief update. When positioning and sentiment reach levels that were never seen before after the market has gone through a blow-off move for more than a year, it may well be that it means something for once.

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2018: The Weakest Year in the Presidential Election Cycle Has Begun

Our readers are probably aware of the influence the US election cycle has on the stock market. After Donald Trump was elected president, a particularly strong rally in stock prices ensued.  Contrary to what many market participants seem to believe, trends in the stock market depend only to a negligible extent on whether a Republican or a Democrat wins the presidency.

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Oil Supply Globally: Market Price Compared to Production Costs

Mainstream media often speaks of the great shale gas/oil revolution and how it makes the United States more productive and a net exporter of oil. We wanted to go into more details,we compare oil production costs for US shale and global oil producers. As reason for the cheap oil we see the combination of two effects: Demand: Cheap US money supported a Chinese investment boom in factories and housing until 2012. The over-investment phase is...

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Free portfolio performance 10 Jun 16

Up to Wednesday, the S&P 500 rose to a 10-month high of 2119.12 points, less than 1% below its all-time high of 2130.82 of 12 May last year. But stocks pulled back on Thursday and more decisively on Friday, as bond yields around the world reached or neared record lows amid looming gloomy political and economic headwinds.

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Will the U.S. Stock Market give birth to its own Black Swan?

At 2099.06 points the S&P 500 is now in a confirmed uptrend and on the cusp of attacking the 19 April high of 2100.80. But uncertainty of the “we will - we won’t” vacillation of the Federal Reserve, remains.

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