Bearishness Still Sells, But The Market Does Not

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I recently read a missive by John Mauldin wherein he makes an observation of what he is seeing from similar types of “analysis” of the stock market today:

“. . . a quick search of the usual suspects on the internet reveals a metric boatload of market analysts complaining about sky-high valuations, 8.5 years of bull market momentum, passive investing, over-concentration in cash-flow producing assets and the impending doom of a correction so massive it will clean our colons as well as our bank accounts.”

For those of you who read Seeking Alpha regularly, what percentage of the articles about the general equity markets have you read that have pointed to us being in a strong bull market and continuing much higher over the last 2 years? Based upon the ranking of the market analysts on this site, it would certainly suggest that most of the articles have leaned bearish, and, yes, I am being kind with that categorization. I mean, are these articles really necessary to explain to me that there are risks inherent in the financial markets? And, here I thought making money was easy. (more…)

Improved SlopeCharts Interface

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I am pleased to let you know a couple of big improvements to SlopeCharts, and these improvements are available to all users. Please note that you should press Ctrl+F5 on the SlopeCharts page to clear the cache and make sure you are using the most recent version.

As new features have been added, the menu bar at the top has been getting increasingly crowded. At this point, it just barely fits on a laptop screen.

1021-wifemenu

Since there are dozens of new featurings forthcoming in the product, this was intolerable, so what we’ve done is fold all the functions into a single menu. Importantly, we’ve also folded into the menu some of the “right click” menus that some people may not realize are there. It’s important to me that all of SlopeCharts functions are obvious and apparent. (more…)

“Great Rotation” Ahead: Inflationary or Deflationary?

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Update: This article ultimately leans toward the view that the reasons for a rising curve will be inflationary. But I woke up in the middle of the night and my thoughts drifted to the components of the article (yeah, that’s pretty sad, I know), and with further consideration I am leaning toward neutral or even a bit into the deflationary camp. The reasons will be the stuff of another article.

Think back to the blaring headlines about the Great Promotion  Rotation in the financial media in 2013. Perhaps the media circus started in January of that year when The Economist asked the question of whether the rise in bond yields signaled a “flight” out bonds and into equities. It was probably an earnest and right minded question asked by The Economist, but you know our friends in the greater financial media; get a good story and flog the hell out of it to harvest eyeballs. Reality be damned, man, it’s the eyeballs that matter!

As the mini hysteria grew that year we called it a “Great Promotion” (by the financial media) in expectation that the Continuum’s limiter (the red monthly EMA 100 on the 30 year bond yield chart below) would hold once again, just as it had during Bill Gross’s inflation hysterics that signaled a top in inflationary angst in early 2011. By the end of 2013, our ears were ringing with the media buzz and drone about the “Great Rotation”.

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How Times Have Changed

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One of my favorite little books is called Hey Skinny! Great Advertisements from the Golden Age of Comic Books, which pretty much describes the contents exactly. It is a hodgepodge of cheesy ads from the mid 1940s to late 1950s for all manner of junk, and it’s eye-opening to see via these come-ons just how much has changed in merchandising. I thought I’d provide a sampling for your amusement, not edification.

First up is the “Lucky Grab Bag”, in which children would send in their precious cash in exchange for a bag of……….stuff. God only knows what stuff would come back, but I suspect it was whatever overstock items happened to be laying around the office……..ballpoint pens, sanitary napkins, swizzle sticks. I suspect an entire generation of kids learned the meaning of disappointment from the receipt of these parcels o’ crap.

1020-grabgab

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Finally Monsieur, A Wafer Thin Mint

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I’ve been mentioning that TF/RUT has been forming some kind of bull flag that should deliver a retest of the all time highs on TF/RUT, and that bull flag is a clear falling megaphone flag on RUT that underthrew bullishly yesterday morning and broke up this morning with a minimum target at a retest of the all time high on RUT at 1514.94. The all time high on TF was made outside RTH and is slightly higher in the 1518.40 area. I’d expect both to be tested before any serious reversal. RUT 60min chart:

171020 RUT 60min

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