Tag Archive: The Stock Market

Did You Make Janet Yellen Rich?

2021-02-08

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2021-02-08

The Stress of Losing Billions. Up until the WallStreetBets crowd short squeezed Melvin Capital for a $7 billion loss, Robinhood had it made. But losing billions is stressful. And when your product blows up your customer the clucking that follows comes hot and heavy.

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Gold Stocks – A Show of Strength

2020-04-17

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2020-04-17

Gold Sector Outperforms Broad Market. The gold sector is in an uptrend since September 2018. The initially rather labored move accelerated after a secondary low was established in May 2019 and the 50-day and 200-day moving averages were breached for the second time. Last week the two moving averages were once again overcome in the course of the post-crash rebound.

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The Secret to Fun and Easy Stock Market Riches

2020-02-18

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2020-02-18

Post Hoc Fallacy. On Tuesday, at the precise moment Federal Reserve Chairman Jay Powell commenced delivering his semiannual monetary policy report to the House Financial Services Committee, something unpleasant happened. The Dow Jones Industrial Average (DJIA) didn’t go up. Rather, it went down.

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A Pharmaceutical Stock That Is Often Particularly Strong At This Time Of The Year

2020-02-15

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2020-02-15

Novo Nordisk, seasonal pattern over the past 10 years
An Example of Strong Single Stock Seasonality. Many individual stocks exhibits phases of seasonal strength. Being invested in these phases is therefore an especially promising strategy. Danish drug company Novo Nordisk.

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Riding the Type 3 Mega Market Melt Up Train

2019-11-11

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2019-11-11

Beta-driven Fantasy. The decade long bull market run, aside from making everyone ridiculously rich, has opened up a new array of competencies. The proliferation of ETFs, for instance, has precipitated a heyday for the ETF Analyst. So, too, blind faith in data has prompted the rise of Psychic Quants… who see the future by modeling the past.

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The Golden Autumn Season – One of the Most Reliable Seasonal Patterns Begins

2019-10-30

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2019-10-30

S&P 500 Index, seasonal pattern since 1950.
The Strongest Seasonal Stock Market Trend. Readers may already have guessed: when the vibrant colors of the autumn leaves are revealed in all their splendor, the strongest seasonal period of the year begins in the stock market – namely the year-end rally. Stocks typically rise in this time period. However, there are questions, such as: how often does a rally take place, how strong is it, and when is the best time for investors to enter the market?

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Scientific Long-Term Study Confirms: Seasonality is the Best Investment Strategy!

2019-07-23

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2019-07-23

Excess Returns
A Pleasant Surprise. You can probably imagine that I am convinced of the merits of seasonality. However, even I was surprised that an investment strategy based on seasonality is apparently leaving numerous far more popular strategies in the dust. And yet, this is exactly what a recent comprehensive scientific study asserts – a study that probably considers a longer time span than most: it examines up to 217 years of market history!

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Watch Europe – Free Pass for the Elliott Wave European Financial Forecast

2019-03-09

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2019-03-09

Euro Stoxx 50 and DAX, Daily
Europe at an Important Juncture. European economic fundamentals have deteriorated rather noticeably over the past year – essentially ever since the German DAX Index topped out in January 2018. Now, European stock markets have reached an important juncture from a technical perspective.

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The Bear Market Hook

2019-01-03

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2019-01-03

S&P 500 Large Cap Index
Has a Bear Market in Stocks Begun? The stock market correction into late December was of approximately the same size as the mid 2015/early 2016 twin downturns, so this is not an idle question. Moreover, many bears seem quite confident lately from an anecdotal perspective, which may invite a continuation of the recent upward correction.

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The Intolerable Scourge of Fake Capitalism

2018-11-20

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2018-11-20

Indexes, Nov 2017 - 2018
All is now bustle and hubbub in the late months of the year. This goes for the stock market too. If you recall, on September 22nd the S&P 500 hit an all-time high of 2,940. This was nearly 100 points above the prior high of 2,847, which was notched on January 26th. For a brief moment, it appeared the stock market had resumed its near decade long upward trend.

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Is the Canary in the Gold Mine Coming to Life Again?

2018-10-17

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2018-10-17

Canary
Back in late 2015 and early 2016, we wrote about a leading indicator for gold stocks, namely the sub-sector of marginal – and hence highly leveraged to the gold price – South African gold stocks. Our example du jour at the time was Harmony Gold (HMY) (see “Marginal Producer Takes Off” and “The Canary in the Gold Mine” for the details).

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Are Credit Spreads Still a Leading Indicator for the Stock Market?

2018-10-16

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2018-10-16

US and Euro Area Spreads Compared, Sep 2016 - 2018
Seemingly out of the blue, equities suffered a few bad hair days recently. As regular readers know, we have long argued that one should expect corrections in the form of mini-crashes to strike with very little advance warning, due to issues related to market structure and the unique post “QE” environment.

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How Dangerous is the Month of October?

2018-10-09

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2018-10-09

The largest one-day declines in the DJIA in history
A Month with a Bad Reputation. A certain degree of nervousness tends to suffuse global financial markets when the month of October approaches. The memories of sharp slumps that happened in this month in the past – often wiping out the profits of an entire year in a single day – are apt to induce fear. However, if one disregards outliers such as 1987 or 2008, October generally delivers an acceptable performance.

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US Stocks and Bonds Get Clocked in Tandem

2018-10-08

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2018-10-08

30 Year Bond and 10 Year Note Yields, Nov 2016 - Oct 2018
At the time of writing, the stock market is recovering from a fairly steep (by recent standards) intraday sell-off. We have no idea where it will close, but we would argue that even a recovery into the close won’t alter the status of today’s action – it is a typical warning shot. Here is what makes the sell-off unique:

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US Equities – Approaching an Inflection Point

2018-09-19

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2018-09-19

DJIA vs. NDX vs. NYA
A Lengthy Non-Confirmation. As we have frequently pointed out in recent months, since beginning to rise from the lows of the sharp but brief downturn after the late January blow-off high, the US stock market is bereft of uniformity. Instead, an uncommonly lengthy non-confirmation between the the strongest indexes and the broad market has been established.

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Wall Street – Island of the Blessed

2018-08-16

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2018-08-16

Which Disturbance in the Farce can be Profitably Ignored Today? There has been some talk about submerging market turmoil recently and the term “contagion” has seen an unexpected revival in popularity – on Friday that is, which is an eternity ago. As we have pointed out previously, the action is no longer in line with the “synchronized global expansion” narrative, which means with respect to Wall Street that it is best ignored.

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Stock Market Manias of the Past vs the Echo Bubble

2018-08-06

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2018-08-06

Dollar Value of Share Repurchase Announcements, 2009 - 2018
The Big Picture. The diverging performance of major US stock market indexes which has been in place since the late January peak in DJIA and SPX has become even more extreme in recent months. In terms of duration and extent it is one of the most pronounced such divergences in history.

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“Sell In May And Go Away” – A Reminder: In 9 Out Of 11 Countries It Makes Sense To Do So

2018-05-29

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2018-05-29

Most people are probably aware of the adage “sell in May and go away”. This popular seasonal Wall Street truism implies that the market’s performance is far worse in the six summer months than in the six winter months. Numerous studies have been undertaken in this context particularly with respect to US stock markets, and they  confirm that the stock market on average exhibits relative weakness in the summer.

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

2018-05-17

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2018-05-17

Good vs. Bad Seasonal Timing
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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The “Turn of the Month Effect” Exists in 11 of 11 Countries

2018-04-22

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2018-04-22

Rocket
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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