Pull the trigger with confidence.

I wrote here back in September 2025 about how the total amount of Reverse Repurchase (RRP) agreements at the Federal Reserve was bottoming out, and how they were thus ceasing to be an issue for the stock market.  That thesis needs a review, given the past few days' data.

To review, a regular Overnight Repurchase Agreement (or Overnight Repo for short) is a transaction between the Fed and a member bank in which the Fed effectively lends money to a bank.  The process involves the sale of... Read More

Crude oil futures prices in the US have dipped to below $60/barrel, in spite of sanctions on Russian oil and other stresses in the energy markets.  Proponents of "Drill, Baby, Drill" are celebrating this price drop, as are motorists enjoying low average gasoline prices.

But the party is about over, according to the leading indication given by gold prices.  This week's chart is one I have shown here before, and it involves shifting forward the plot of gold prices by 19.8 months to reveal how... Read More

The US stock market is overvalued now by a long list of measures, and that has not mattered yet.  That is the key point about valuation - - it does matter, but not necessarily on anyone's schedule.  Valuation is a "condition", not a "signal". 

Years ago, Dr. Robert Shiller developed his "Cyclically Adjusted P/E Ratio" (CAPE) for the SP500, and he used prior data from the Cowles Commission to extend back all the way to 1871.  This week's chart shows Shiller's CAPE, and I left off the first... Read More

Breadth divergences are just now starting to appear in the stock market, but there is another bearish divergence which has been operative for a few months.  This week's chart shows an interesting relationship between the stock market and the spread between yields on US and German debt.  Specifically this spread compares the US 10-year to the equivalent "bund".  That term is short for "Bundesbank", the German central bank.  Bundes means federal in German.

Normally this spread goes up and... Read More

Crude oil prices have been in a downtrend since shortly after the big peak caused by Russia's invasion of Ukraine.  Those prices are near a turning point now, according to data from the CFTC's weekly Commitment of Traders (COT) Report.

This week's chart shows the net position of the big "commercial" category of traders.  To qualify as a commercial a trader must be either a producer of the subject commodity, or "use it in their trade or business".  This chart depicts the raw net short... Read More

Back in 2021, the Fed turned to what had previously been an almost-never used tool, the Reverse Repurchase Agreement (RRP).  This is a variation on the longstanding tool known as a Repurchase Agreement.  In a RRP, the Fed "sells" some of its Treasury debt to a bank, with an agreement to buy it back later for an agreed upon price.  As collateral for the transaction, the bank pledges some of its more conventional loan book assets.  Such a transaction therefore ties up those bank assets, making... Read More

Some recent data on trucking shipments in the U.S. serves as bad news for stock prices.  The folks at Cass Information Systems keep track of how much stuff is getting shipped by truck in the U.S., and how much the shippers are having to pay for that. Most of the time their data on shipments and expenditures move together, but there are slight differences which can be informative.

And more important for my purposes, both sets of data show an interesting relationship to stock prices.  This... Read More

Every US president and Treasury secretary claims to favor a strong dollar, although they usually secretly wish for a weaker dollar, to make US exports more attractive.  But I am betting none of them have ever been aware of the relationship between taxes and the dollar, shown in this week's chart. 

What this chart shows is the US Dollar Index, a basket of multiple world currencies' values versus the dollar, which is dominated by the euro.  Most of you are already familiar with that.  The... Read More