Category: Momentum Relative Strength
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Stock Market Resumes Downtrend
The U.S. stock market as measured by the S&P 500 stock index, has trended down from a lower high. The S&P is not yet oversold, and implied volatility is around 20%, which is the prior… Read More
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Fundamental Valuation: Is the Stock Market Cheap or Expensive?
For me, and everyone else even if they don’t realize it, the price trend is the final arbiter. For more than two decades, I’ve focused my efforts on developing systems to identify trends early in… Read More
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Interesting convergence between small and large company stocks
Market cycles and trends are dynamic, ever evolving, so labels such as big and small are subjective, relative, and change over time. Everything is impermanent, so nothing lasts forever. Investors expect smaller companies stocks to… Read More
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So far, 2020 has shown us some fine examples of risk, investor sentiment, divergence, and volatility
Implied volatility, as measured by the CBOE Volatility Index (VIX) has trended up about 50% since the most recent low on June 5th. I’ll call it a moderate volatility expansion. Normally a volatility expansion from… Read More
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Panic selling drove a waterfall decline and washout for the stock market
Growing up in East Tennessee and the Great Smoky Mountains, I observed a lot of waterfalls. Wiki says a fall of water is an area where water flows over a vertical drop or a series… Read More
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Profiting from the Madness of Crowds
If we want to profit from the madness of crowds, we necessarily need to believe and do different things than the crowd at the extremes. You may have heard the stock market was down a… Read More
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Is the panic selling drying up?
After yesterday’s continued selling pressure, only 7% of the S&P 500 stocks remain in uptrends as measured by the 50-day moving average. As most stocks are participating in the downtrend, this breadth measure is about… Read More
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The stock index falls below its long-term trend, but stocks are now getting oversold
The stock index falls below its long-term trend, but just as stocks are getting oversold. The 200-day moving average was about 11% below the high February 19th, just eight days ago. As you can see… Read More
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Dow Jones is down -10% off its high
Dow Jones is down -10% off its high. I don’t pay much attention to the Dow Jones Industrial Average as it’s a price-weighted index of 30 stocks. But, the S&P 500 capitalization-weighted index of approximately… Read More
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What volatility expansions tell us about expectations for stock market trends
A volatility expansion implies that stock prices are expected to spread out more, as measured by the (VIX) CBOE Volatility Index. Currently, it’s at 28, which would imply a 28% expected volatility over the next… Read More