CategoryComplimentary

Back in the day, coal miners took canaries into coal mines. The birds were an early warning of an invisible and lethal danger because canaries are more sensitive to dangerous gases than humans are. Consequently, the coal miners knew it was time to leave the coal mine if the canary died because hazardous gases were present. …

Those who read our recent write-ups know that we made a case to buy the dip. Fundamental evidence motivated the bullish call. First of all, sustained bear markets unfolded during recessions only. However, historically reliable leading macro indicators were not flashing red lights. Moreover, sentiment and position gauges showed pessimistic extremes. Investors held a strongly bearish …

Investors were bearish lately and many expected a waterfall selloff after Russia invaded Ukraine. However, the S&P 500 did not match their expectations. The index rallied after a brief period of weakness. It trades higher than before the geopolitical event hit the newswires. The underlying conditions were not fertile for a more substantial selloff. Macroeconomic …

A lot of folks expected a stock market crash after Western countries imposed sanctions on Russia this weekend. They were wrong again. Equities did not crash despite having enough narratives to justify a waterfall selloff. Tensions morphed into a large-scale conflict of a nuclear superpower with NATO. The financial system has been weaponized as Western …

“The economy is not the stock market” is an almost generally accepted proverb. However, it is misleading as both are related. Sustained bear markets unfolded in recessions only. Selloffs that occurred outside of economic recessions almost never accounted for more than -20% losses and recovered swiftly.  Assessing the odds of a recession helps investors judge …

Sentiment indicators became increasingly pessimistic. Some of them are at capitulation levels already. Moreover, technical indicators signal an oversold stock market. Stocks typically reversed to the upside on similar conditions during the past decade. Nasdaq investor sentiment is a representative example. According to Mark Hulbert, newsletter advisors are as bearish as in March 2020 and …