Pull the trigger with confidence.

Technical analysts like to put moving averages on their charts, and each analyst has his own favorite for the type of moving average and the  speed at which it adjusts to changes in the data.  The two most common types in use these days are Simple Moving Averages (SMAs) and Exponential Moving Averages (EMAs). 

To understand why technicians care about EMAs versus SMAs, a quick look at this chart provides some an illustration of the difference.  During trending moves upward or downward, a 10%... Read More

The good news for the stock market bulls is that the federal government is not taking too big of a bite out of Americans’ incomes.  The latest data from the Treasury Department show that total federal receipts from all sources for the 12 months ending September 2019 amounted to 16% of GDP.  That still seems like a pretty high percentage empirically, but it is below the average of the past 4 decades.

This week’s chart compares that measure of the tax bite to the movements of the SP500.  The... Read More

The SP500 has now finally broken out above its declining tops line, and closed at a new all-time high.  Whether it could do so was in doubt for a while, but we had a strong hint that it was coming from this week’s chart.  It shows a comparison between the SP500 and EEM, the big emerging markets ETF sponsored by iShares.

EEM has the really fun property that when it disagrees with the SP500, that is usually really useful information.  When there is a divergence or other disagreement, EEM... Read More

Brokerage firms have been bemoaning the declining amounts of share volume versus a few years ago.  Trading volume equals commissions, or at least it used to before Schwab led the race to the bottom and went to zero commissions on online retail trades.  The other discount brokers followed suit.

Economists will tell us that if you lower the price of something, people will consume more of it.  But so far, that is not working out for trading volume with zero commissions.  Instead, trading... Read More

Short term interest rates have been falling, pushing the Federal Reserve to cut its own Fed Funds rate target.  This week’s chart says that there is still a lot further for rates to fall. 

I get a lot of data out of the CFTC’s weekly Commitment of Traders (COT) Report, and I review the relevant insights every Friday in my Daily Edition.  This week’s chart features data from the eurodollar futures contract, showing the “commercial” traders’ net position in that contract.  That is the red... Read More

Just over a year ago, I wrote here about how annual seasonality has undergone a change versus how it used to act years ago.  We all know about how November to April is the strong period for seasonality, and then we are supposed to “Sell in May and go away”.  That was based on how things used to go, when the stock market would typically make a bottom in late October and then start higher.

In recent years, though, the seasonal inflection point has been creeping to an earlier point on the... Read More

The American Association of Individual Investors (AAII) releases its weekly survey of its members’ every Thursday, and this week shows a pretty big spread between the bulls (21%) and the bears (39%).  Another 39% of participants are “neutral”, and not willing to make a commitment about their opinion, and that’s actually a pretty high reading for the “neutrals”.

When investors shift over to saying that they are bearish in a pretty big way, it is usually a good marker for an intermediate term... Read More

Back on August 22, I wrote here about how the spread between the 10-year T-Note yield and the 3-month T-Bill yield gives us a leading indication that is relevant for small cap relative performance.  This time, I look at the "yield curve" in a different way, via the spread between 10-year and 2-year yields.

The 10-year to 3-month spread is a leading relationship for small cap relative performance, but the 10-2 spread is a coincident one.  Sometimes analysts show that as a 2-10 spread, but it... Read More