Collateral Damage

Maybe Warren Buffett can get through to Congress. In a CNBC interview aired this morning: “It’s so important that small businesses, which have become collateral damage in a war that our country needed to fight, but we, in effect, voluntarily had an induced shut down of parts of the economy, and it hit many types … continue reading →

The Yield Curve Model: Dec 8, 2020

One of my favorite market indicators is our yield curve model. It has warned us several times in advance of significant correctionsthis year. Warnings over the past few years have included: July 16, 2018: The Yield Curve Update – We were a little early. SPX closed at 2798 that day, rose to 2940 before crashing … continue reading →

Update on XLF: Nov 17, 2020

After being stuck in a textbook triangle pattern for almost six months, XLF finally broke out last week. We noted its having reached overhead resistance a few weeks ago [see: Yield Curve Model – Correction Imminent.] At the time, the 2s10s was threatening a breakout which, per our model, suggested a downturn for equities in … continue reading →

Update on Bitcoin: Nov 17, 2020

Almost 8 months ago I posted our first outlook on BTC [see: FOMC Embraces MMT.]   We noted at the time that the FOMC was “officially in the short-squeeze business” after ES came within 19 points (trading was halted there) of our 2155 target and the Dow was set to test the Nov 8, 2016 (election … continue reading →

CPI: MIA

Futures remained slightly lower following lower than expected initial claims (709K vs 740K consensus) and CPI – which came in at 1.2% annual and 0.0% for October.  Note that it took a plug number outlier +1.2% pop in electricity to keep CPI from going negative. One would think if the economy were really all that … continue reading →

There Will be Typos

It’s a little known fact that if you’re trying to get over the pain of back-to-back knee replacements, you should have rotator cuff surgery. At least that’s what my horoscope said. As a result, my typing skills will be a little off this morning, which means my market insight might also be a bit off.  … continue reading →

The Latest Cringeworthy Rally

Sometimes I cringe when I place a target on a chart. Such was the case yesterday when ES reached our IH&S target at 3425. If it kept going, it was sure to backtest the intersection of the broken rising white channel at the falling channel top. Was that likely in the midst of election and … continue reading →

Election Aftermath

Futures were all over the map last night, with ES’ 113-pt range dictated almost entirely by factors as opposed to election results – which, contrary to Trump’s declaration, are still AWOL. Note that ES tagged our IH&S neckline (also the former H&S neckline) target where it is currently running out of gas. As expected, the … continue reading →

GDP Beats, But…

After the government “put $5 trillion into a $3 trillion hole,” as Ares Management’s Michael Arougheti so eloquently put it, GDP bounced back sharply last quarter. Unfortunately, it’s still down 2.9% for the year.Keep in mind that this is also the advance read for the third quarter, days before an important presidential election, and that … continue reading →