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SPECIAL EDITION - Bitcoin Follow Up

 
weekly Chart In Focus

Bitcoin prices have burst out to a higher high, getting a lot of people excited.  So I figured this was a good time for a follow up to my Jan. 26 Chart In Focus article.

That article a month ago illustrated the similarities between the price patterns in Bitcoin and the Nasdaq Comp from an earlier period.  The chart above is the same one I showed in that earlier article, updated for how Bitcoin prices have behaved since then.  One key point to observe is that the time scales for each plot... Read More

Crude Oil Foretold the Trump Rally 10 Years Ago

 
weekly Chart In Focus

President Trump is being given credit for the post-election rally, based on analysts’ understandings of investors’ assumptions about what potential policy changes might mean.  And someday, I am pretty sure Mr. Trump is going to be blamed for a stock market selloff he similarly had nothing to do with.  Such is the nature of the media. 

The uptrend still underway was foretold by crude oil prices 10 years ago, as this week’s chart illustrates.  This leading indication is one of the most fun... Read More

VIX Futures Traders Finally Getting Complacent

 
weekly Chart In Focus

The recent story about low readings for the spot VIX Index is well-reported.  What has escaped the attention of many is that prices are now finally coming down for VIX futures at the long end of the maturity spectrum.

The spot VIX has been below 15 for most of the time since July 2016, except for a brief spike up to 22.51 on the Friday before the November 8, 2016 federal elections.  Despite the spot VIX remaining low, the highest priced VIX futures contracts have been fairly steadily above... Read More

Low QQQ Volume a Sign of a Top

 
weekly Chart In Focus

When investors get complacent, they do certain things.  They show up as bullish in the various surveys.  They bid tiny premiums on options, driving down the VIX.  They put all of their cash to work, letting money market fund levels get down really low.  And they trade tiny volumes on QQQ. 

This week’s chart looks at a 10-day simple moving average in the daily trading volume of QQQ, the largest of the ETFs which tracks the Nasdaq 100 Index.  Low readings like this are associated with... Read More

A-D Line New High

 
weekly Chart In Focus

When the NYSE’s A-D Line hits a new high, it conveys a clear message that liquidity is plentiful.  The market might encounter other types of problems, such as investors’ emotions suddenly swinging, or a big news event rocking the market.  But if liquidity is strong, the market can more easily recover from such problems.

The DJIA has been in a concerted uptrend since making a final corrective low in February 2016.  The DJIA’s upward progress has been in fits and starts, while the NYSE’s A-D... Read More

Bitcoin is a Bubble We’ve Seen Before

 
weekly Chart In Focus

Most investors remember the 2000 Internet Bubble, which was an example of bubbles for the history books.  What is harder is to recognize a replica bubble when it appears again later, especially if it disguises itself. 

This week’s chart reveals that the price of Bitcoins is replicating the 2000 Nasdaq bubble and its aftermath.  But the curious point is that Bitcoin prices are tracing out the dance steps much more quickly.  This is a great example of the new and improved “Efficient Market... Read More