Archive for the ‘Stocks - U.S.’ Category

Weekly Videos

Friday, January 12th, 2018

This week’s video will be posted on the new home for Short Takes. If all goes well, it will appear sometime between 6:00 and 8:00 pm ET.

Investing 2018: Leveraging World Class Strategies

Friday, January 5th, 2018

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Were Charts Helpful In 2017 And How Can They Help In 2018?

Wednesday, January 3rd, 2018

The best way to review the effectiveness of evidence-based investing in 2017 is to look back at dated posts from the last thirteen months. The posts below all appeared on Seeking Alpha between December 23, 2016 and December 31, 2017; the dates are links to the original posts:

  1. Secular Stock Market Signals Have Occurred Only One Other Time Since 1928 - Dec. 23, 2016
  2. Are Valuations Similar To Bull Market Peaks Concerning? - Jan. 7, 2017
  3. How Does 2017 Compare To Historical Bubbles? - Jan. 11, 2017
  4. How Was The Collective Mood As Stocks Started A 19-Year Secular Bull Run In 1982? - Jan. 19, 2017
  5. Are Stocks Set Up For A 2011-Like Plunge? - Jan. 23, 2017
  6. Stocks: The View From 30,000 Feet - Jan. 30, 2017
  7. Are The World’s Greatest Value Investors Bearish? - Feb. 6, 2017
  8. How Concerning Is Talk Of Overbought Markets? You Can Decide 1982-2017 - Feb. 22, 2017
  9. Rare Signal Says Stock Rally Is The Real Deal - Feb. 27, 2017
  10. Stocks Post 35-Year Breakout - Mar. 6, 2017
  11. Why Odds Still Favor New Record Highs In Stocks - Apr. 3, 2017
  12. This Indicator Had A Divergence In Both 2000 And 2007; A Divergence Is Also Present In 2017 - Apr. 26, 2017
  13. Are Defensive Assets Waving Red Flags For Stocks? - May 2, 2017
  14. Stocks: The Big Picture - May 16, 2017
  15. Numerous Facts Support Long-Term Bullish Case - May 30, 2017
  16. Low Volatility And Stock Market Risk - Jun. 5, 2017
  17. How Concerning Are Predictions Of A Stock Market Crash? - Jun. 12, 2017
  18. Will Narrow Framing Cause Many To Miss A Generational Rally In Stocks? - Jun. 19, 2017
  19. Are Stocks In A Bubble That Is About To Burst? - Jun. 24, 2017
  20. Is The NASDAQ Showing 2007-Like Cracks? - Jul. 11, 2017
  21. Stocks: The Forest And The Trees - Jul. 24, 2017
  22. These Charts Paint A Long-Term Bullish Picture - Aug. 1, 2017
  23. Is The Market Reacting To Earnings Or Just Charts? - Aug. 7, 2017
  24. Skeptical Bias Toward Stocks Aligns With Bullish Charts - Aug. 14, 2017
  25. How Concerning Are These 7 Bad Signs For Stocks? - Aug. 21,2017
  26. Red Flags Coming From This Breadth Indicator? - Aug. 28, 2017
  27. Why 2017 Looks Nothing Like 1929 Or 1987 - Sept. 28, 2017
  28. Has This Important 2016 Stock Signal Flipped? - Oct. 2, 2017
  29. The Mother Of All Breakouts Still In Play - Oct. 24, 2017
  30. Stock Ownership Figures Look Nothing Like A Bubble - Nov. 7, 2017
  31. Tech Stocks: 2017 Looks Nothing Like 2000 - Nov. 14, 2017
  32. The Big Picture In 3 Charts - Nov. 28, 2017
  33. Fed Rate Hike History Says Bull Could Run For A Long Time - Dec. 14, 2017

100% Bullish Conclusions - No Opinions

The articles above are a sample of evidence-related posts on Seeking Alpha over the past thirteen months. If you review the entire list, you will see 100% of the fact-based posts related to stocks came to bullish conclusions. The posts are not based on personal opinions about valuations, politics, or the state of the U.S. economy; they are based on observable evidence.

Were Charts Helpful In 2017?

The question in the header above is like asking is a golf club helpful in the game of golf? The answer depends on how the golf club is used. Charts, indicators, and ratios are tools that can be used effectively or ineffectively, just like a golf club.

This week’s stock market video looks back at charts presented throughout 2017, allowing us to answer the question, can charts be used as an effective tool in the realm of investing? You can decide after reviewing the video with dated clips. The vast majority of CCM’s weekly videos were included in Seeking Alpha posts in 2017.

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Was 100% Of The Evidence Bullish In 2017?

Could we have found bearish charts in 2017? Yes, we can always find bearish charts, indicators, or data sets; the key is to make decisions based on the weight of the evidence. The weight of the evidence was bullish in December 23, 2016 and remained that way until the last article was posted on December 14, 2017.

How Can All This Help Us In 2018?

One of the great things about the financial markets is there are an almost infinite number of ways to attack the risk-reward dragon; our approach is one of many. Under our system, the key to 2018 will be the same as 2017:

  1. Wake up every day and ask are we allocated prudently based on the facts we have in hand?
  2. If the answer is yes, hold “as is”.
  3. If the answer is no, make an incremental adjustment to get the investment allocation back in line with the hard evidence.

This approach allows us to stay fully invested in stocks when the odds are favorable (see 2017); it also gives us an exit/migration strategy for the next inevitable bear market (see 1929-1932, 2000-2002, and 2007-2009).

Real World Example: Evidence-Based Model

The same approach is used to forecast and track hurricanes; an analogy described in Stocks: The Read From Probability Models. The concept of using evidence in the early stages of a bear market to migrate to a defensive posture is outlined in Are Stocks Market Trends Starting To Roll Over?.

Can You Measure And Test It?

If you can quantify something and test if it works in the real world, then you have an objective input. It is nearly impossible to use subjective inputs to make rational and calculated risk-reward decisions in the financial markets. The bearish headlines below, that were not particularly helpful in a year marked by stock gains, were posted between December 31, 2016 and May 31, 2017.

Leveraging 2017 Charts To Improve 2018 Odds

Friday, December 29th, 2017

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Charts Say A Lot About Stocks 2018-2028

Friday, December 22nd, 2017

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Extremely Rare Long-Term Setups For Stocks 1928-2017

Friday, December 15th, 2017

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Fed Rate Hike History Says Bulls Could Run For A Long Time

Wednesday, December 13th, 2017

Facts Say Be Open To Better Than Expected Outcomes

Dating back to August 2016, our weekly videos have covered numerous long-term charts that tell us to remain open to the possibility of stocks rising for several more years, including:

  1. Bullish Monthly Momentum (MACD) - December 2, 2016
  2. Long-Term Breakout In Stock/Bond Ratio - December 9, 2016
  3. Annual Signal Last Seen Before 1982 Bull Run - December 30, 2016.

Are Fed Rate Hikes A Showstopper For Stocks?

The Fed raised rates by 0.25% Wednesday and projected an acceleration in U.S. economic growth. It seems tempting to say “the Fed will kill the bull market”. However, as noted by Senior Market Strategist Ryan Detrick of LPL Financial, it is in the realm of historical possibility for stocks to continue to rise for some time.

A List Of Concerns

This week’s stock market video reviews present day facts to help us better understand the stock market’s concerns related to:

  1. Valuations
  2. Geopolitical Events
  3. Predictions Of Gloom And Doom
  4. Threat Of U.S. Recession

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Is The Market Concerned About…?

Friday, December 8th, 2017

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Is Volume/Breadth Aligned With Bullish Case?

Tuesday, December 5th, 2017

An August 2016 analysis outlined a long-term bullish signal for stocks that has occurred only ten other times in the last thirty-five years. If we fast forward to December 2017, is market breadth/volume aligning with or contradicting bullish data we have in hand?

The chart below shows up/down volume (1996-2010) for the NYSE Composite Stock Index, along with its 50-week moving average (thick blue line).

Notice how all-things-being equal, the probability of bad things happening increases when the 50-week moving average is flat or negative (see orange and red arrows below). Conversely, the probability of good things happening increases when the 50-week moving average turns back up in a bullish manner (see green arrows below). The S&P 500 is shown at the bottom of the image below for reference purposes.

Trend Flipped In Favor Of The Bulls In 2016

In simplified terms, volume patterns shifted from favoring declining issues in early 2016 to favoring rising issues in the second half of 2016 (see green arrow below).

Is The Bullish Bias Still In Play?

As shown in the chart below, the slope of the 50-week moving average still favors good things happening over bad things happening looking out weeks, months, and years. The chart below is dated December 5, 2017.

What Can We Learn From Eight Monthly Charts?

This week’s stock market video looks at numerous monthly charts to see if they align with or contradict the bullish case. The video covers facts rather than opinions or fears of what may or may not happen in the future. The video covers the following:

  1. S&P 500 vs. Bonds
  2. Financials vs. S&P 500
  3. Tech Stocks
  4. Tech Stocks vs. Bonds
  5. Industrial Stocks vs. Bonds
  6. NYSE Composite
  7. Homebuilders
  8. Small Caps vs. S&P 500

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A Foolproof Signal?

Since there is no such thing as a foolproof indicator or signal in the financial markets, the recent bullish shift in up/down volume assists us with probabilities. As long as the slope of the 50-week remains positive, the odds of good things happening will be higher.

Long-Term Means Long-Term

The facts covered above relate to longer-term outcomes, meaning weeks, months, and years. For this data to be used effectively, we must have realistic expectations about normal volatility within the context of a rising trend.

Are Monthly Charts Starting To Show Some Cracks?

Friday, December 1st, 2017

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