Posts filed under “Technical Analysis”

Comparing Generational Lows: 1942, 1974 & 2009


Source: Monthly Chart Portfolio of Global Markets, Bank of America Merrill Lynch

 

 

It seems that every 30 years or so, markets make what can be described as a “Generational Low.” We can define this as a capitulatory bottom, one that might be caused by a variety of factors, but usually includes some combination of fear and panic in the mix.

This equity market low point is likely to be unchallenged over the next 10-20 or so years. After that point, the combination of population growth, technological gains and of course, inflation, means that we will are highly unlikely to ever see stock indices at those prices again.

Towards that end, have a look at the chart above, courtesy of the technical team at Bank of America Merrill Lynch. “History may not repeat, but it rhymes” goes a quote which is often credited to but has never been verified as written by Mark Twain.

Continues here

Category: Markets, Psychology, Technical Analysis

Is The January Barometer Worth Following?

    As January goes, so goes the year?” That is the pithy version of the January Barometer. First identified by Yale Hirsch of the Stock Trader’s Almanac, it suggests a correlation between January’s performance and full-year returns. I am not a believer in the many omens Wall Street traders tend to obsess about, including…Read More

Category: Markets, Technical Analysis, Trading

Friday Was a 90/90 Day. What That Means

Last week ended on quite the down note. Friday’s big selloff saw the Dow Jones Industrial Average drop 2 percent, or 318.2 points. The Standard & Poor’s 500 Index fell 2.1 percent (38.2 points), while Nasdaq Composite Index declined 2.2 percent (90.7 points). The technically significant issue was that Friday was a 90/90 day —…Read More

Category: Technical Analysis, Trading

The Bull Market Ends (or Is It Just a Correction?)

We awoke this morning to see futures deep in the red. Over the past two weeks, markets seem indecisive, unable to make much progress. Lots of days began with positive trades, only to roll over and fall into losses. Several days that began in the red closed negative, though usually off their worst levels. Last…Read More

Category: Data Analysis, Investing, Technical Analysis, Trading

Over 400 Days Without a Correction

Source:Société Générale   From Société Générale strategist Andrew Lapthorne comes the chart above, and the observation that ”It has been 408 days since the last 10% correction in the MSCI World index, the 8th longest period on record.” As the char above shows, this is just about the median length of time between corrections. The mere…Read More

Category: Digital Media, Markets, Technical Analysis

BCA U.S. Equity Valuation Index

click for larger graphic Source: BCA Research   There seems to be an increasing concern that stocks have become wildly overvalued, especially in light of rising interest rates. However, somewhat overvalued U.S. equity prices can continue to rise if price/earning multiples keep expanding.   Continues here      

Category: Markets, Technical Analysis, Valuation

Gold Charts: 2000-Present, 2011, ’12, ’13

This is from a bigger project I am working on. I found it interesting that even thought Gold hit its peak in 2011, it did not have a negative year until 2013:   2000-2013 ~~~ 2011 2012 2013

Category: Gold & Precious Metals, Technical Analysis

Huprich: Wisdom Comes in the Smallest of Packages.

We previously published Art Hurpichs’ Market Truisms and Axioms back in 2011.  Art is a CMT with Day Hagan Asset Management, and he returns with an updated set of Stock Market Rules to Remember. Enjoy. ~~~ As you are reading this, we are in the process of moving our “youngest” to Virginia, as he prepares for…Read More

Category: Rules, Technical Analysis, Trading

Major Trend Analysis

Major Trend Analysis The 2000-2003 Bear Market The Major Trend Indicator (MTI-black line) is helpful in identifying when the market is vulnerable to an intermediate correction within a bull market, and the onset of a bear market. Ongoing bull markets are confirmed when the MTI climbs above the green line. When a rally fails to…Read More

Category: Markets, Technical Analysis, Think Tank

Advance Decline Line (Market Breadth) Says No Top Yet

Source: Chart courtesy of Carl Swenlin, Decision Point (annotations by Ritholtz)   One of the best ways to identify a market that is exhausted is to look for divergences between Breadth (i.e. the number of advancing equities versus the number of declining ones) and Price (i.e. new highs). That is a concept that Paul Desmond…Read More

Category: Markets, Psychology, Technical Analysis