This is the video recording of our September 5th Monthly Charts Live Strategy Session
Is now the time to get long equities?
If you kept up with the headlines and what the sell side analysts have to say, you’d think it would be.
Fortunately we try to stay ahead of the curve around here.
Yesterday we discussed the recent sentiment shift among permabears, wall street analysts, hedge funds and financial media.
To add to that sentiment shift, here is the our internal sentiment composite which includes data from Individual Investors, Advisories, Active Investment Managers, Volatility and the Options Market.
As you can see last year saw some of the most pessimistic levels in history, giving us one of the greatest buying opportunities we’ve ever seen.
Today, Sentiment is at the opposite extreme: [Read more…]
The stock market bears have been capitulating. Have you noticed?
Those twitter spaces full of permabears crying about how bad things are going to get for stocks, no longer exist. They’ve completely disappeared.
These sell side analysts who missed this entire bull market are now coming out saying things might not be so bad.
The worst performing ETF in the history of ETFs was just delisted because the permabear fund manager doesn’t know how to not be a permabear during a raging bull market.
Goldman Sachs came out saying their Hedge Fund clients covered their short positions last month at their most aggressive pace in years.
Everyone agrees that this recession isn’t coming.
Everyone agrees that inflation is no longer a problem.
Boy have things changed over the past year.
Look at the latest MoneyWeek cover featuring a child robot riding a bull racing across the floor of the NYSE throwing research reports at adults in suits with ridiculous smiles on their faces.
Things you see near tops? Or things you see near bottoms?
Just to put things in perspective, here’s what the MoneyWeek covers looked like the week that the New Lows List peaked in June of 2022.
The market got consistently stronger with broadening participation, immediately after these magazine covers were published.
The back half of this year has already been much different than the first half.
Besides, this is the time of the cycle when the major indexes are supposed to struggle.
Just as the bears are capitulating, we enter the weakest seasonal period of the cycle:
After one of the most legendary runs in the history of the stock market, it’s the perfect time for the indexes to take a break.
Doesn’t it make sense for that to occur once everyone finally agrees with us that this is a bull market?
I don’t like being long when everyone agrees we should be long.
It’s better being lonely in my positioning.
I think there will continue to be huge winners underneath the surface while the major indexes like the S&P500 and Nasdaq100 struggle.
This is the video recording of our August 2nd Monthly Charts Live Strategy Session
Technical Analysis is the study of the behavior of the market and its participants.
So while identifying price trends is our ultimate goal, sentiment plays an important role in that process.
Prices don’t move up or down because of “fundamentals” or “the economy”. The price of assets move based on positioning.
When investors are all positioned one way, and are at a consensus, who’s left to drive prices further in that direction?
Last summer we saw some of the most pessimistic sentiment towards stocks in history.
Some of that sentiment has started to shift a bit, like in the AAII and II polls. We’re back somewhere towards the middle in those. You need, at least, some bulls to buy stocks to have a bull market.
But when it comes to Fund Managers, Cash is still their largest position, and they’re most bearish on equities. [Read more…]
We interrupt this raging bull market to update you on some historic positioning in the bond market that is sure to impact your portfolio, whether you like it or not.
Even if you don’t trade bonds, this is really really important.
You see, I know it’s easy to sit back and chill out with the S&P500 making new 52-week highs, the Dow Jones Industrial Average and Dow Transportation Average making new 52-week highs and, of course, the Nasdaq100 making new 52-week highs after posting its best first half to a year EVER.
Market breadth continues to expand and sector rotation is frustrating the hell out of anyone trying to short this market.
The thing is, what even changed?
What happened that stocks have absolutely been ripping higher since last year?
It’s not the economy that drives stocks. It certainly isn’t fundamentals.
It’s positioning. [Read more…]
This is the video recording of the July 2023 Mid-month Conference Call.
It’s hard for me to have a conversation about the stock market without bringing up what’s happening in bonds.
Think about it like this, the market cap of all US Stocks is somewhere around $40 Trillion. For the bond market it’s over $120 Trillion.
Volatility in bonds tends to trickle down to other asset classes, especially stocks.
US Stocks really got going in the 4th quarter last year, once the US 10-year Note stopped falling in price.
I don’t believe that was a coincidence.
But at this point, Large Speculators have on their most aggressive short position in bonds ever.
So in other words, what is historically the “dumb money”, particularly at turning points, are betting more aggressively than ever that bond prices are going to fall and rates will now continue higher: [Read more…]