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Countertrend Rally or New Uptrend? RASI Holds The Key

weekly Chart In Focus

“Gobs of breadth is a good thing.”  That is one of my favorite sayings, and we seem to be getting it since the Dec. 24, 2018 bottom. 

When there are multiple days in a short period with really strong Advance-Decline (A-D) numbers, it is a sign of strong liquidity.  It is possible to lift a few important stocks when liquidity is tight and the mood swings bullish.  But to lift the majority of stocks takes a much bigger firehose of money coming in.  So when we see a lot of strong breadth... Read More

Crude Oil Leads Bond Yields

weekly Chart In Focus

If you want to know what long term bond yields are going to do, you don’t need some fancy econometric model that incorporates GDP growth, unemployment rates, factory utilization, and all of the many other data series that economists watch.

You just need to watch crude oil prices, and then wait 3 weeks.

This week’s chart compares the Treasury Yield Index (TYX) to the price of the near month crude oil futures contract.  The catch is that the oil price plot has been shifted forward by 3... Read More

Santa Claus’ Report Card Is In

weekly Chart In Focus

If Santa Claus should fail to call, the bears may come to Broad and Wall.

That’s the old saying in the financial markets, referring to the “Santa Claus Rally” period which consists of the last 5 trading days of the year plus the first two of the next year.  Yale Hirsch first took on the task of quantifying this in his Stock Traders’ Almanac, and in his book, “Don’t Sell Stocks On Monday”. 

The basic idea is that this period is usually an up one for the stock market, and my own research... Read More

Finally a 10-1 Up-Volume Day

weekly Chart In Focus

The big bounce day on Dec. 26, 2018 saw NYSE Up Volume of more than 10x the amount of Down Volume, distinguishing it as a “10-1 Up Volume Day”.  These are pretty special days, because they do not come along very often.  They are also special because the interpretation of what one of them means depends on the context in which it appears.

Generally speaking, a 10-1 Up Volume Day which appears in the middle of an up move can mark a blowoff end for that up move.  But a 10-1 Day which appears... Read More

T-Bond Blowoff Top Signaled

weekly Chart In Focus

T-Bond prices have had a nice run upward since the lows in October and November 2018, but now we are seeing an important indication of a blowoff top, suggesting bond prices will not be able to continue higher from here. 

The indicator in this week’s chart is a Ratio-Adjusted McClellan A-D Oscillator for high grade corporate bonds.  The A-D data as well as the determination of which bonds are high grade is as provided by FINRA.  And see this article for a description of the difference... Read More