Is Market Euphoria Finally Here?
Euphoria is tough to respond to as an investor. A cursory look at the market in times of enhanced excitement would make you think euphoria is great because the market is going up. Anyone who is long the market is making a boat load of money regardless of what stocks he/she owns. When optimism is…
Political Risks Facing Equities (Le Pen & Debt Ceiling)
In this article, I will review the political risks facing the market. The two most pressing issues facing the market are the French presidential election and the potential issues surrounding the debt ceiling in America. Both have the potential to cause volatility in the equities market if they turn out to have unforeseen outcomes. The…
Strategies for This Market - When Low Volatility Meets High Skew
All of the major indexes closed the week slightly off all time highs. The low volatility and high SKEW has drained the options market of many of the most widely used strategies. In this extended weekend video let's review what volatility and SKEW is, why it's important, and look at the limited options strategies that…
The Hope That Tax Reform Gets Passed In 2017
In this article, I will discuss the critical lever which will determine where the stock market will go in the next 3 months. There is a big difference between survey data and hard data. When the survey data initially improved in December, I was skeptical of it because of the size of the pop. For…
How Expensive Do Stocks Have To Be For It To Matter?
In this article, I will review possible flaws in using valuation metrics and defend why they are important. I think some bullish investors make a critical error when they blindly discount valuations. There is a bias against valuations that tends to get built in over time when investors hear for years that stocks are overvalued…
The Auto Loan Market Seems Weak
This article will describe the two recent trends I’m noticing in the economy. Then I will refute part of a list of arguments made against using the Shiller PE as a reason to have a cautious stance when analyzing stocks. The first trend is related to the auto loan bubble; sales look like they topping.…
Rare Exhaustion Signal = Upcoming Range?
Light selling today across the board as traders take profits at all time highs. In tonight's video let's look at a rare exhaustion signal and one strategy that we rarely would recommend, but might be the right one for this market...
The Scariest Chart Ever?
Wednesday was an abnormal day for the market because the VIX rallied along with the S&P 500. It was only the 4th day in history where the VIX was up over 10% and the S&P 500 also closed positive. The chart below shows what the inverse of the VIX looked like before Wednesday. Savvy investors…
CPI Comes In Hot
The CPI report came out today. To no one’s surprise, the stock market is up on the news. It reached a record high for the 5th straight day even as the VIX was up 11.45%. The Shiller PE has reached a 29 handle which means it is about 3.5 points away from the high set…
Risk on the Rise as Markets Hit Record Levels
You may or may not be tired of hearing this - new record highs across all of the major indexes were hit today. In tonight's video we will revisit the expected move for the week and look at what the market expects for the next 2 days. Please note in the video I erroneously mention…