Tag Archive: Bear Market

The Market Crash – Hope In The Fear

2025-04-07

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2025-04-07

Last week, we noted that "nothing good happens below the 200-DMA," and the tariff-induced market crash this past week confirmed that statement. However, we also noted that over the last 30 years, previous failures at the 200-DMA have also often been buying opportunities. That is unless some "event" of magnitude creates a massive shift in analysts' estimates. …

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The Stock Market Warning Of A Recession?

2025-04-04

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2025-04-04

A Wall Street axiom states that the stock markets lead the economy by about six months. While not a perfect predictor, the stock market reacts to investor expectations about future corporate earnings, economic activity, interest rates, and inflation. When sentiment shifts due to anticipated weakness in any of these areas, equity prices often decline, reflecting …

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Failure At The 200-DMA

2025-04-01

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2025-04-01

In last week's post, "Is the correction over?" we wrote about the potential for a rally back to the 200-DMA. However, the failure of that test increased short-term concerns. As we noted in that post, there were early indications of buyers returning to the market. To wit: "The chart below has four subpanels. The first … Continue reading...

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Stagflation Panic: A Misdiagosed Media Spin

2025-03-28

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2025-03-28

Following the latest Federal Reserve meeting, there was a massive surge in media headlines stating "stagflation." The media's stagflation panic is unsurprising as it elicits memories of the late 1970s during the Arab oil embargo. Of course, a "stagflation" is excellent fodder for clicks and views as it scares the “bejeebers” out of people. Over the last …

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U.S. Recession Risks Not As High As The Media Suggests

2025-03-21

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2025-03-21

U.S. recession risks have been a headline over the last few weeks as the markets sold off. "Goldman Sachs and Moody’s Analytics in recent days joined forecasters raising alarm about the increased likelihood of an economic downturn.

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Retail Investor Buys The Dip Despite Bearish Sentiment

2025-03-18

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2025-03-18

It has been an interesting correction. The average retail investor was "buying the dip" despite having an extremely bearish outlook. This is an interesting point because, as shown, the retail investor used to be considered a "contrarian indicator" as they were prone to be driven by emotional behaviors that led them to "buy high and sell low." …

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Stupidity And The 5-Laws Not To Follow

2025-03-14

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2025-03-14

Human stupidity is the one thing you can rely on in financial markets. I recently read a great piece by Joe Wiggins at Behavioral Investment, which discusses why "Investing is hard." The entire article is worth reading, but here are the five key reasons investors often fail at investing: These are great points, particularly now that …

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CAPE-5: A Different Measure Of Valuation

2025-02-28

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2025-02-28

One of the most referenced valuation measures is Dr. Robert Shiller's Cyclically Adjusted Price-Earnings Ratio, known as CAPE. Valuations have always been, and remain, an essential variable in long-term investing returns. Or, as Warren Buffett once quipped: “Price Is What You Pay. Value Is What You Get.” One of the hallmarks of very late-stage bull …

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Estimates By Analysts Have Gone Parabolic

2025-02-25

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2025-02-25

Just recently, S&P Global released its 2026 earnings estimates, which, for lack of a better word, have gone parabolic. Such should not be surprising given the ongoing exuberance on Wall Street. As noted last week, correlations between all asset classes, whether international or emerging markets, gold or bitcoin, have all gone to one. Unsurprisingly, rationalizations …

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The Tariff Risk Isn’t In Inflation (Part II)

2025-02-21

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2025-02-21

For Part 1 on "Tariff Risk" read: Tariff Impact Not As Bearish As Predicted. In "Trumpflation" we discussed why the tariff risk was not inflation. To wit: "Today, globalization and technology give consumers vast choices in the products they buy. While instituting a tariff on a set of products from China may indeed raise the …

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Retail Exuberance Sets Market Up For A Correction

2025-02-18

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2025-02-18

Last week, we discussed the surge in retail exuberance in the market following the election of President Trump. "The market defies more negative news because retail investors continue to step in and "buy the dip." In our recent Bull Bear reports, we discussed the push by retail investors, but looking at retail sentiment is quite …

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The Impact Of Tariffs Is Not As Bearish As Predicted

2025-02-14

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2025-02-14

There are many media-driven narratives about the impact of tariffs on the economy and the markets. Most of them are incredibly bearish, predicting the absolute worst possible outcomes. For fun, I asked ChatGPT what the expected impact of Trump's tariffs will likely be. Here is the answer: "One of the immediate consequences of increased tariffs …

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Bull Bear Report – Technical Update

2025-02-11

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2025-02-11

I could not produce our weekly Bull Bear Report this past weekend as I presented at Michael Campbell's Moneytalks Conference in Vancouver. However, I wanted to use today's technical update to review some of the statistical analysis we produce each week in that commentary. Such is mainly the case given last Monday's "tariff" shock and …

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Forecasting Error Puts Fed On Wrong Side Again

2025-02-07

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2025-02-07

The Federal Reserve's record of forecasting has frequently led it to respond too late to changes in economic and financial conditions. In the most recent FOMC meeting, the Federal Reserve changed its statement to support a pause in the current interest rate-cutting cycle. As noted by Forbes: "The policy-setting Federal Open Market Committee agreed unanimously …

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Tariffs Roil Markets

2025-02-04

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2025-02-04

Over the weekend, President Trump announced tariffs of 25% on both Canada and Mexico, as well as a 10% tariff on China. Such was not unexpected, as contained in the Trump tariff Executive Order {SEE HERE}. Specifically, that order stated: "[Sec 2, SubSection (h)]: Sec. 2. (a) All articles that are products of Canada as defined …

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Bullish Exuberance Returns As Trump Takes Office

2025-01-31

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2025-01-31

Bullish exuberance is returning to the markets and the economy in a big way following the Presidential election. Such is particularly the case with recent executive orders signed by Trump, which fulfill Trump's promises to "Make America Great Again." Given that short-term market dynamics are driven primarily by sentiment, as investors, we can not dismiss …

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DeepSeek DeepSinks Bullish Exuberance

2025-01-28

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2025-01-28

On Monday, markets were rocked by news that a Chinese Artificial Intelligence model, DeepSeek, performed better than expected at a lower development cost. As we noted in our Daily Market Commentary yesterday: "The 3% panic sell-off on the Tech-heavy Nasdaq-100 futures is focused on the view that China’s DeepSeek AI model rollouts show AI products …

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Do Money Supply, Deficit And QE Create Inflation?

2025-01-24

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2025-01-24

I recently debated with Michael Pento, who made an interesting statement that increases in the money supply, the deficit, and a return to quantitative easing (QE) will lead to 1970s-style inflation. The recent experience of inflation in 2021 and 2022 would seem to justify such a view. However, is that historically the case, or was …

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Are Return Expectations For 2025 Too High?

2025-01-21

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2025-01-21

In a recent post, I discussed Wall Street's return estimates for 2025 for the S&P 500 index. To wit: "We have some early indications of Wall Street targets for the S&P 500 index, and, as is always the case, they are optimistic for the coming year. The median estimate is for the market to rise … Continue reading »

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Gardening Guide To Better Portfolio Returns In 2025

2025-01-17

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2025-01-17

As we head into 2025, investors are giddy over the market returns of the last two years. As shown, the annual returns, while elevated, have come with only average volatility along the way. However, while most analysts and investors expect 2025 to be another bullish year, there is always a risk of a more disappointing …

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