Le Pen Gaining Ground

The equities market is in such a hyper bullish mode, it is no longer a surprise to see the Nasdaq, S&P 500, Dow, New York Stock Exchange, and Russell 2000 all hitting all-time closing highs simultaneously. Amazon, Apple, and Goldman Sachs also all hit new all-time highs. Even with this broad-based rally, the VIX was…

Is Market Euphoria Finally Here?

Euphoria is tough to respond to as an investor. A cursory look at the market in times of enhanced excitement would make you think euphoria is great because the market is going up. Anyone who is long the market is making a boat load of money regardless of what stocks he/she owns. When optimism is…

Political Risks Facing Equities (Le Pen & Debt Ceiling)

In this article, I will review the political risks facing the market. The two most pressing issues facing the market are the French presidential election and the potential issues surrounding the debt ceiling in America. Both have the potential to cause volatility in the equities market if they turn out to have unforeseen outcomes. The…

The Hope That Tax Reform Gets Passed In 2017

In this article, I will discuss the critical lever which will determine where the stock market will go in the next 3 months. There is a big difference between survey data and hard data. When the survey data initially improved in December, I was skeptical of it because of the size of the pop. For…

How Expensive Do Stocks Have To Be For It To Matter?

In this article, I will review possible flaws in using valuation metrics and defend why they are important. I think some bullish investors make a critical error when they blindly discount valuations. There is a bias against valuations that tends to get built in over time when investors hear for years that stocks are overvalued…

The Auto Loan Market Seems Weak

This article will describe the two recent trends I’m noticing in the economy. Then I will refute part of a list of arguments made against using the Shiller PE as a reason to have a cautious stance when analyzing stocks. The first trend is related to the auto loan bubble; sales look like they topping.…

The Scariest Chart Ever?

Wednesday was an abnormal day for the market because the VIX rallied along with the S&P 500. It was only the 4th day in history where the VIX was up over 10% and the S&P 500 also closed positive. The chart below shows what the inverse of the VIX looked like before Wednesday. Savvy investors…

CPI Comes In Hot

The CPI report came out today. To no one’s surprise, the stock market is up on the news. It reached a record high for the 5th straight day even as the VIX was up 11.45%. The Shiller PE has reached a 29 handle which means it is about 3.5 points away from the high set…

Semi-Annual Fed Report

Today the Fed gave its semi-annual monetary policy report to the Senate. It’s debatable whether any policy changes on interest rates were made because it’s a matter of tone. According to Goldman Sachs the chance of a rate hike in March increased from 15% to 20%. The chance of a rate hike in June increased…

The Dow Likely Isn’t Going To 36,000: Part 1

In this post, I will respond to the article in the Atlantic which is titled “Dow 36,000.” The article is filled with contradictory statements and logical fallacies. I think it’s a good idea to debate the concepts it promotes head on. I’m starting the debate out on the losing end for some readers because they…