The Correction Continues image

The Correction Continues

Executive Summary: Stocks find themselves in a negative state again this morning as the headlines are all bad. There are new fears about an economic shutdown in the UK, concerns about the startling rise in new COVID cases, the global banking scandal, and worries a…
More Art Than Science image

More Art Than Science

Executive Summary: As I have mentioned a time or two, "early warning" or mean reversion work tends to be more art than science. The main problem is that strong trends will reach an "extreme" overbought/sold reading and then stay there for some time. As such, it is…
The Lines In The Sand Are Clear image

The Lines In The Sand Are Clear

Executive Summary: The good news is the bulls have been able to hold the line at key support levels (think 50-day moving averages) across the board on the major stock market indices. The bad news is the recent rebound hasn't reversed the trend or moved the bulls c…
Bulls Deserve Benefit of Doubt image

Bulls Deserve Benefit of Doubt

Executive Summary: There are times when it can be difficult to make sense of the contrasting messages from market models and the price action playing out on your screens. For me, it is to understand/remember the time frame you are looking at. Obviously, if you are…
Thoughts On The Correction, Fundamentals, and Valuations image

Thoughts On The Correction, Fundamentals, and Valuations

Before we get to our weekly review of market fundamentals, let's look at the state of the current pullback happening in the stock market. After a 3-day pummeling of the market leaders that appeared to be triggered by the combination of extreme overbought conditions, excessive spec…
My Base Case image

My Base Case

Executive Summary: One week ago, investors fretted about keeping up as the stock market winners continued to march higher on a daily basis. But as the saying goes, trees don't grow to the sky and our Early Warning board gave us ample time to recognize that the "ta…
Are The Bears Back In The Game? image

Are The Bears Back In The Game?

Executive Summary: After the rather ridiculous run higher in July and August, during which time we saw some truly ridiculous moves in names like Tesla (TSLA) and AAPL on the back of stock split announcements (which, of course, mean N-O-T-H-I-N-G), the bears finall…
Corrective Action Isn't Surprising image

Corrective Action Isn't Surprising

Executive Summary: Last week, I questioned if the bull case had become a little "too easy" and, in turn, a bit too popular. The implication was that the recent joyride to the upside had become more than a little overdone. Cue some options unwinding, some profit-ta…
You Knew It Was Coming, Right? image

You Knew It Was Coming, Right?

Before we get to the state of the market fundamentals, I figure it is probably a good idea to address the current violent selloff happening in the stock market. First, the fact that the market suddenly fell, without notice, and on no news, should not come as ANY surprise to reader…
Of #FOMO and #OnHold image

Of #FOMO and #OnHold

Executive Summary: Stocks remain overbought, sentiment remains at extreme levels, and IMO, complacency has set in. And yet, the S&P 500 and NASDAQ indices continue to march higher on a daily basis. As such, the bears are sure to be asking, how can this be? Fro…