Posts filed under “Contrary Indicators”

Generational Lows: 1942, 1974 & 2009

 

Click for ginormous chart
Chart
Source: Merrill Lynch

 

I love the giant chart above using the overlay of the S&P 500 off the 1942, 1974, and 2009 generational lows as a guide. Its beautiful in its simplicity, and has a little something for everyone.

The bulls get a chart that is bullish longer-term, the bears get a broad overview that shows the risk of sell off/trading range for a few years that will be sure to confuse everyone.

Here’s Suttmeier:

In mid-to-late 2013, this risk coincides with the US equity market moving into the weakest part of the Presidential Cycle. The rally off the 2009 low (thick red line) fits best with the rally off the 1942 low (solid green line). After a 1946 peak, the S&P 500 pulled back before decisively breaking out in 1950.

All good stuff . . . .

 

 

Source:
Monthly chart portfolio of global markets
Stephen Suttmeier, MacNeil Curry, Jue Xiong
Merrill Lynch, September 10, 2013

 

Category: Contrary Indicators, Investing, Markets, Sentiment, Think Tank

Sell Side Indicator: Wall St’s Improving Optimism

Click to enlarge Source: Merrill Lynch/BoA   This is an interesting chart: Improving Wall Street sentiment is still no where near the levels associated with excessive sentiment. Despite the ongoing rally — or perhaps because of it — we are now all the back to the levels enjoyed at the lows in March 2009. Merrill notes…Read More

Category: Contrary Indicators, Sentiment, Technical Analysis

Japan versus Gold?

Charts like this make me want to Sell Japan and Buy Gold — at least for a quarter or so.   click for larger chart Source: Josh Brown

Category: Contrary Indicators, Technical Analysis, Trading

Polling the Public About Investing Is Loads of Fun!

Back in August of 2011, Gallup decided to do what they do best — which is poll the American public for their thoughts. In this instance, it was their thoughts on investing. The questions asked was simply: What do you think is the best long term investment? Their answers were very instructive: 34% of Americans said…Read More

Category: Cognitive Foibles, Contrary Indicators, Investing, Really, really bad calls

The Smartest Man in Europe

I have been reading this (for lack of a better word) series from Byron Wien for many years. I remain unsure if The Smartest Man in Europe actually exists or if it is a clever ruse that allows Wien to say things at arm’s length that perhaps he would not be able to if he…Read More

Category: Contrary Indicators, Investing

World's Biggest ETF/Contrarian Indicator: GLD > SPY

GLD was briefly the world’s biggest exchange-traded fund. In August 2011, GLD had assets of more than $77 billion, surpassing SPY (SPDR S&P 500 ETF) for a short time. The SPDR Gold Trust’s market capitalization rose to $76.7 billion  — gold briefly topped $1,880/ounce. At the same time, SPY’s “capitalization” was ~$74.4 billion. I missed…Read More

Category: Contrary Indicators, ETFs, Gold & Precious Metals, Technical Analysis

World’s Biggest ETF/Contrarian Indicator: GLD > SPY

GLD was briefly the world’s biggest exchange-traded fund. In August 2011, GLD had assets of more than $77 billion, surpassing SPY (SPDR S&P 500 ETF) for a short time. The SPDR Gold Trust’s market capitalization rose to $76.7 billion  — gold briefly topped $1,880/ounce. At the same time, SPY’s “capitalization” was ~$74.4 billion. I missed…Read More

Category: Contrary Indicators, ETFs, Gold & Precious Metals, Technical Analysis

Putting Investor Bearish Sentiment into Context

Individual Investors Are Not Buying It Click to enlarge   Lots of people have been discussing how negative investor sentiment is, showing the chart above. It shows markets making new all time highs as expectations that markets will be higher six months hence is at a mere 19% of AAII respondents. (See Individual Investors Are An…Read More

Category: Contrary Indicators, Investing, Quantitative, Sentiment

Sell Side Consensus Indicator Still Extremely Bearish

Click to enlarge Source Merrill Lynch     I’ve shown this chart several times over the past year, but its worth repeating: The Street remains very bearish by historical standards. Note this is not at all a short term indicator; and does operate with a bit of a lag.     Previously: Strategists Most Bearish…Read More

Category: Contrary Indicators, Sentiment

Rug to be pulled out from under the short bonds trade ?

In certain aggressive managed accounts, we have been nibbling on some TBT, the inverse 20 year treasury ETF. Data such as the AAII Asset Allocation Survey show investors are very overweight bonds relative to their 27 year mean.  Additionally, the multi-decade drop in interest rates suggests we are likely at a secular low, and ready to…Read More

Category: Contrary Indicators, Fixed Income/Interest Rates, Think Tank