Classical models of market activity hold that there are predictable cyclic rotations in the equity markets. We are familiar with the overlapping sine waves of market segments as they progress through their stages of growth and decline. In broad brushstrokes, as leading industries such as financials mature, we would expect to see robust economic activity … Continue reading Cycles And Rotation
The Big Picture
The Significance Of Ranges
Experienced market participants know that stocks spend most of their time in seemingly random ranges. It is only for a short time that they will actively trend up or break down. This is logical since companies will go about their business in a somewhat predictable and systematic way. When something unusual or extraordinary happens, or … Continue reading The Significance Of Ranges
Cyclical Strategies
One of the comments I often address is whether only buying stocks that are making new highs is the best methodology. If you are an active trader, this makes sense because you want to go where the momentum is. While stocks do ebb and flow, it makes sense to be invested in the strongest stocks … Continue reading Cyclical Strategies
The Significance Of Trend
It's been almost 4 months since the initial shock to the stock markets ostensibly caused by the panicked entreaties of health officials. A number of factors contributed to the massive selloff which ensued over the following months based on the sudden introduction of unknowns. The lack of substantiated facts was one factor but also the … Continue reading The Significance Of Trend
Market Update May 14
On March 22, almost a month ago, we discussed scenarios for the direction of the market, specifically the Dow Jones in the weeks to follow. At the time, the market was at maximum fear and volatility measures were spiking to all time highs. Because of the climatic nature of the sell off at the time, … Continue reading Market Update May 14
Needs vs Wants
In line with the theme of the previous post, I am going to illustrate a thought process that anyone can employ. One of the hallmarks of a strong economy is the strength of the consumer sector, especially in what is labelled as 'consumer discretionary'. This sector encompasses companies that sell consumables or luxuries, including such … Continue reading Needs vs Wants
May Update
We are well past the initial bomb blast that hit the markets in mid February. The panic selling that ensued was a function of an un-quantifiable outside force which hit the markets without much warning. Over the months, the nature of the threat has been identified and there are measures being taken globally to address … Continue reading May Update
Contrarian Ideas
The majority of articles that I've written are concerned with finding the best investment vehicles when they are most in demand, hence the focus on relative strength and momentum. There is another school of thought that views investments from an entirely different perspective, that is from a contrarian and necessarily longer term horizon. Investing in … Continue reading Contrarian Ideas
Where Is The Action?
When the media refers to "the market", the normal reference is to the Dow Jones Industrial Average. As we know, the Dow is only a very narrow measure of stock market activity. Though its constituency changes over the years to better reflect the most dynamic sectors of the US economy, it does not necessarily measure … Continue reading Where Is The Action?
Tactic Update
We've been able to logically navigate the swings in the market thus far using some technical tools, some logic and as always, a bit of luck. Much of what has moved markets has been unpredictably external to market dynamics and we are still under some uncertainty in that regard. The activity in the markets reflects … Continue reading Tactic Update
