Pull the trigger with confidence.

"The target is marked by the burning LOH."

When I was an reconnaissance helicopter pilot in the Army many years ago, that was a popular saying that was passed down by the more experienced pilots, some of whom had flown during the Vietnam War.  It was meant to convey our own frailty, and the foolishness of being too eager about finding the enemy's location.

LOH back then stood for Light Observation Helicopter, either a Hughes OH-6 Cayuse or a Bell OH-58.  It was pronounced as "loach". ... Read More

When every other segment on financial TV is about the question over whether to "Sell In May And Go Away", it is natural to wonder whether the belief in seasonality has become overdone.  When everyone believes in something so thoroughly, especially about the stock market, can it still remain valid?

If you were to average together the market's performance in one year chunks of time, it might look something like this week's chart.  It is made up by averaging together the performance of the... Read More

I like to get the answers ahead of time, and one of the fun ways to do this is with price pattern analogs.  This is a technique that employs examining a price pattern from the past, and finding that it matches up more or less with what's happening now.  The implication is that if the correlation is good up until now, it should continue to be good into the future. 

The example this week compares the current price structure of gold prices to what gold was doing back in 2005-06.  You can see... Read More

The Summation Index can give us important information about what lies ahead for the stock market, as long as one knows how to interpret it correctly.  For longer term comparisons like this, I like to use the Ratio Adjusted Summation Index (RASI) instead of the classic version, because the RASI factors out changes in the total number of issues traded on the NYSE. 

Back in January 2012, I wrote about the important bullish message that the Summation Index was giving us.  The RASI had just... Read More

When it comes to the overall stock market, there are only 2 fundamental factors which matter.  Forget dividend yield, earnings growth, book value, etc.  The only two factors which matter for the overall market are (1) How much money is there? and (2) How much does that money want to be invested?

This week's chart looks at a big contributor to factor #1.  It compares the SP500 to the size of the combined balance sheets of the European Central Bank (ECB) and the US Federal Reserve.  The ECB... Read More

There are lots of investments that are undeserving of investors' money, and T-Bonds are at the top of the list.  Even though the principal is guaranteed by Uncle Sam's (or Uncle Ben's) ability to print new money, the current yield on even the longest duration bonds is still at roughly the same level as the inflation rate.  So any interest you earn on your money gets eaten up by the loss in value of that money due to the Fed's unwillingness to do its job and achieve price stability. 

But in... Read More

Here is an update to an article I posted in September 2011, describing the leading indication that lumber prices give for the shares of housing related stocks.  Back then, it was saying that a rally was ahead for homebuilders, building materials providers, and others involved in the housing industry.  And that opinion ran contrary to what was being voiced back then by a lot of other analysts. 

Now the commentary I hear on the business TV channels seems largely bullish toward housing... Read More