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Sudden Surge in Bearishness

weekly Chart In Focus

The past 3 weeks have seen a huge surge in the bearish percentage among the investment advisors and newsletter writers in the Investors Intelligence survey.  Often these data are shown as the spread between the bulls and the bears, but for this week I thought it would be informative to look at just the bears alone.  And to better correlate with price action, I have plotted those data on an inverted scale in the chart above. 

One important point to note in this chart is how these data have... Read More

QE is Bullish for Stocks, Bearish for Bonds

weekly Chart In Focus

The Federal Reserve invented “quantitative easing”, or QE, back in 2009, as a way to try to stimulate the economy out of the damage of the 2008 financial crisis.  It worked!  Or perhaps I should say, it worked at lifting up the stock market.  Its effect on the actual economy is still open for debate. 

When I say that QE1 worked for the stock market, I should clarify by saying that it worked right up until the Fed stopped doing it.  Once they turned off the spigot, liquidity dried up, and we... Read More

Stock Market Showing Another Example of “Rogue Wave” Behavior

weekly Chart In Focus

The term “rogue wave” applies to strangely massive waves which occur in the ocean.  And the same physics appears to show up in the movements of stock prices.

Oceanographers who study this phenomenon have observed that it is not just about a wave being very tall above the mean sea level.  A rogue wave does have a crest, and it also has an adjacent trough which is approximately the same depth below normal sea level that the crest is above it.  That is what makes a rogue wave so destructive to... Read More

Gold Moving Lower Despite Covid-19

weekly Chart In Focus

Gold futures fell $52/oz on Thursday, March 12, the same day that stock prices fell 10% and everyone is worried about catching Covid-19.  How can that be, since gold is supposed to be a “rainy day investment”?

The answer in part is that people buy gold in case of a rainy day event.  But when the rainy day gets here, people sell gold so that they can get money to buy actual things.

Gold prices should start trending down now, and for the next 5 years, according to this week’s chart.  I... Read More

VIX Rise Overdone, But Part of Enduring Trend

weekly Chart In Focus

The market has put on a big VIX Index spike in early 2020, thanks to worries about the novel corona virus and the 2020 election.  While the immediate spike is overdone in the short term, it is also part of a larger uptrend in the VIX which is due to last until March 2021.

This week’s chart is one I have shown before, and it compares a log-scaled VIX Index to the 3-month T-Bill yield.  The key trick is that the T-Bill yield plot is shifted forward by 2 years to reveal how the VIX tends to... Read More

Fed Pulling Back from Repos at The Wrong Time

weekly Chart In Focus

The Federal Reserve decided in September 2019 that it would start to insert itself into the market for “repurchase agreements”, or repos.  The reasons why the Fed honchos decided that they needed to do that will be an interesting subject for future historians.  For current market historians, the important point about the Fed’s intervention in the repo market is that it was beneficial for stock prices to have the Fed adding liquidity in this way.  And the Fed’s gradual departure since early... Read More

It Takes 15 Months for Yield Curve Inversion To Be Felt

weekly Chart In Focus

We had an inverted yield curve in 2019, and yet the planet did not tumble off its axis.  The sky did not fall.  So does that mean an inverted yield curve is not really a problem?

In a word, NO!  What the casual armchair economists do not realize about the yield curve is that the effects on the economy of changes in yields are delayed.  Generally speaking, it takes about 15 months for those effects to show up in overall economic data. 

This week’s chart makes for a great example of this... Read More

Daily Timing Chart


04/08/2020 IssuesVolume(000s)
McC OSC 280.094 738915
Sum Index -1610.393 -7080485

More Data

The McClellan Oscillator


OscillatorCreated 1969, the McClellan Oscillator is recognized by technical analysts as the essential tool for measuring acceleration in the stock market. Using advance-decline statistics, it gives overbought and oversold indications, divergences, and measurements of the power of a move.