Posts filed under “Technical Analysis”

Merrill’s Secular Road Map Projects S&P 500 2300 in 2017

S&P 2300? Give It Four Years: Ritholtz Chart
secular measured breakout
Source: BAML

 

It took more than 13 years, but the S&P 500 managed to eclipse its 2007 highs of 1576 earlier this year. This move takes it out of a long term trading range, and according to the Technical Analysts at Bank of America Merrill Lynch, marks a transition to a new secular bull market.

Some folks might disagree with that characterization. The arguments against are that one cannot tell for sure (and certainly not this soon) after new highs if they are false breakout or not; they may not stick if earnings fall or rates rise. Further, given the Fed’s role in driving stock prices, once “the Taper” begins, all bets are off as to whether we stay in the new trading range above SPX 1576.

Note that the false breakout was hellish for traders in the 1970s . . .

 

Continues here

 

 

 

 

Category: Cycles, Technical Analysis

Does Too Few Bears = Correction?

  What do you get when you cross an overbought market with too few bears? Often, that combination of complacency leads to a correction. So far, all it has produced is a lot of frustrated contrarian traders. Stephen Suttmeier, technical strategist at Merrill Lynch, put the situation into broader context in his monthly chart book…Read More

Category: Sentiment, Technical Analysis

What Indices Are At All Time & 2013 Highs?

A hedge fund manager friend had mentioned a research report that had noted the Dow, FTSE and Nikkei were at neither all time nor 2013 highs. Those there indices sounded like it a bit of cherry picking to me. So rather than succumb to the usual confirmation bias, I decided to see what major indexes…Read More

Category: Investing, Markets, Technical Analysis

Shiller: U.S. Stocks Are ‘Highly Priced’

Shiller’s cyclically adjusted price-earnings ratio click for ginormous chart Source: Bloomberg     Robert J. Shiller, a co-winner of this year’s Nobel Prize in Economic Sciences says US stocks are expensive. They are the most expensive relative to earnings they have been in more than five years — since the lows follwoing the great collapse…Read More

Category: Technical Analysis, Valuation

90% Up Days Are Bullish

A 90% up day is bullish & the stats support a year-end rally click for giant table Source Merrill Lynch BA     On Thursday. we had a huge up day, with US markets gaining ~2%. Some folks credited the possibility of a debt ceiling deal, while others called it a low volume short covering…Read More

Category: Markets, Technical Analysis

Bull Market Corrections, 2009-2013

click for ginormous chart Source: Investech     We are almost through September and despite its reputation for volatility, the month has seen strong upside and new bull market highs. The S&P500 lost “only” 4.6% in August, but based on the Sturm und Drang you are forgiven for assuming it was 3X that amount. As…Read More

Category: Cycles, Markets, Technical Analysis

Stock Market Sentiment & Technical Indicators

You know I love these sorts of things: Dr. Ed Yardeni has a nice set of monster sentiment charts posted at his site. The link is Stock Market Indicators: Fundamental, Sentiment,. & Technical and its 20 pages of fun.   courtesy of Yardeni Research, Inc. September 17, 2013.

Category: Sentiment, Technical Analysis

Dow Theory or Buy and Hold?

Reading through the classic textbook, Technical Analysis of Stock Trends, last night I stumbled upon a stunning stat comparing the returns of a strategy using Dow Theory versus buy and hold. Using Dow Theory buy and sell signals would have turned an initial investment of $100 in 1897 into $492,597.38 by the end of 2010. …Read More

Category: Dividends, Technical Analysis

Shiller P/E Bottoms

Shiller P/E Bottoms Coincide with Major Lows, Downtrend Breaks Precede Rallies Click for ginormous chart Source: Merrill Lynch   Nice chart from Stephen Suttmeier & Co looking at how the Shiller P/E ratio compares to regular P/E at major lows, downtrend breaks, and before rallies: The good news is that secular trading ranges lead to…Read More

Category: Technical Analysis, Valuation

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