Mid-Term Election Years Have The Biggest Drawdowns

Q4 Earnings Look Great So Far Last week the FactSet aggregate S&P 500 calculations were severely altered by Citigroup’s one time loss related to the tax cut. This week FactSet changed the numbers as they calculated Citigroup’s earnings to be $1.28 instead of -$7.15. This excludes the one time write off related to the tax…

Timing The Late Cycle

The Other Model Indicators Let's take a look at the indicators in the macro model to see whether the stock market is overvalued and if the economy is late in the cycle. In my opinion, many of the indicators are distorted making this model a talking point rather than actionable advice. I skipped the consumer…

Is The Market Near A Top?

Extremely Extended Bull Market According to the RSI, the Dow was the most bullish since 1904 three days ago and it has been up since then! With records being topped, it’s interesting to see a comprehensive look at a bunch of indicators. The macro model below does just that as it shows the periods since…

Investors Ignore The $40 Billion In Q4 Write-Offs

Almost Every Streak In The Book Broken On Thursday, stocks went from a gain to a loss as some investors wondered if the market would finally fall. Alas, the market righted the ship and it closed about flat. The biggest down days we’ve seen are when the market gives back some of its gains, but…

Steve Mnuchin Sends Dollar To A 37 Month Low

Dollar Is Crashing? Manufacturing is being helped by the declining dollar. As you can see from the chart below, the dollar has been in a one way path downwards. The DXY hit a 37 month low as it’s down against every major currency in the past year. The daily sentiment index for the dollar is…

Euphoria Continues As Investors Beg For A Correction

Stock Market Still Overheated There have been many odd records this year which you normally don’t hear about. That’s what happens when the S&P 500 hits a new record almost every day. I’m not exaggerating with that statement. As you can see from the chart below, the S&P 500 hit a new high in 12…

Bank Of America Capitulates By Raising Its Year End S&P 500 Price Target

S&P 500 Has A Great Year In 3 Weeks The stock market has already had a good performance for the year with about 3 weeks in the books. The 6.22% return in the S&P 500 this year means the market has already pushed passed some full year projections. The euphoria is real as the market not…

Speculative Exposure At An Unprecedented Level

Traders Don’t Care About Protection The price of the puts compared to calls is 2 standard deviations below the 5 year average as you can see in the chart below. You would think with stocks going up in a straight line, investors would seek to buy protection to lock in their gains. However, euphoria makes…

Is A Cyclical Slowdown Coming In 1H 2018?

Economic Growth Weakening? The term ‘global synchronized growth’ has become a buzzword in the financial press in the past few months. Obviously, just because it is widely used doesn’t make it wrong; in fact, it has been an accurate portrayal of reality. However, it’s always important to question the mainstream opinion. We often see trend…

Stocks Rally As Shutdown Ends

Government Shutdown Ends The government shutdown matters to the economy; I talk it down because the media likes to exaggerate its importance. The good news is it looks like it will end soon as of Monday after it went on for just 3 days. The chart below shows all the government shutdowns since 1976. As…