Posts filed under “Cycles”
This morning, I made note of the difference between secular bull and bear markets. I described secular bear markets as being longer-term, characterized by strong rallies, vicious sell-offs and earnings contractions.
Secular bull markets include an investor willingness to pay more and more for the same dollar of earnings even as stock prices rise. (I’ll revisit this issue next week.) The simplest way to think of secular markets is as longer eras driven by overriding dynamics that define the period ether positively or negatively.
In the beginning of this year, we looked at some of the trading errors commonly made by gold investors during this cycle. At the time, gold had fallen 38 percent from its 2011 peak. Yesterday, spot gold traded at less than $1,242 before closing slightly higher. Gold is hitting new multiyear lows relative to the…Read More
@TBPInvictus here: On April 17, 2012, North Carolina Congresswoman Virginia Foxx stood before her colleagues in the House of Representatives and said (emphasis mine): Ms. FOXX. Mr. Speaker, the March employment report continues to show us that the Federal Government has not been helping to create jobs in our economy. A Wall Street Journal editorial…Read More
Source: Aleph Blog Here is a fascinating chart from David Merkel at Aleph Blog. The chart shows the sentiment cycle that arises due to performance chasing. That leads to crowded and, ultimately, unsuccessful trades. As David observes: When money is being thrown at a sub-asset class, like subprime RMBS in 2006-7, or manufactured housing…Read More
“Capitulation” is the term used to define a selling climax that often marks the bottom of a bear market. It translates into “surrender” — giving in to the overwhelming need to just make the pain stop. Retail brokers tell tales of individuals bailing out, often saying things like, “Just sell, get me out, please make…Read More
Source: Federal Reserve Bank of Philadelphia Via the Federal Reserve Bank of Philadelphia, by way of Business Insider, I decided to see what we could do if that was an animated GIF instead of static charts. The net result shows the month-to-month change from January 2005 – January 2014 of the Philly Fed’s coincident…Read More