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May 29 2020

Can The Rally Recover From Its 0-For-8 Start?

  • May 29, 2020

The current rally is either the first upleg of a new bull market, or the second-largest bear market rally in the last 125 years. The lone development that can settle the issue is for the S&P 500 to move above its February 19th closing high of 3,386.15.

Mar 06 2020

Out Of The Blue?

  • Mar 6, 2020

There have been long-time divergences between blue chips and other market segments signaling that all is not “in gear” beneath the surface—but this cautionary activity never foretells the “timing.” Recently, Small Caps, the Value Line Arithmetic Composite, and Dow Transports staged pathetic bounces off the January 31st “Coronavirus 1.0” low, while the blue chips had strong momentum into mid-February. Normally, such divergences typically last for at least 3-4 months before they become meaningful.

Aug 07 2019

August Is No Time To Disconnect

  • Aug 7, 2019

Rather than stocks disconnecting from the economy, as some equity bears contend, we see the blue chips disconnecting from the rest of the market. The underperformance of leading groups, along with multimonth divergences in momentum, bullish sentiment, and credit spreads are all consistent with the deteriorating prospects for earnings and the economy.

May 07 2019

Divergence, Danger, And Delusion

  • May 7, 2019

The U.S. economy and blue chips have shrugged off the risk of the worst trade war since 1930’s Smoot-Hawley Act, while comparatively few stocks on either the NASDAQ or the NYSE have broken out to 52-week highs. There’s also the troubling talk of the Fed having tamed “the cycle.” Should investors bet on a potentially wild (but narrower) final melt-up over the next 6-12 months? We don’t like the odds.

Nov 07 2018

Divergence Everywhere—A Cross-Asset View

  • Nov 7, 2018

The 40 bps jump in the 10-year yield, a 2-standard-deviation event, occurred within a five-week win-dow. Interestingly, historical data doesn’t suggest a continued increase in the near term.

Oct 05 2018

Narrow Performance Divergence Among EM May Not Last

  • Oct 5, 2018

We’ve previously noted the narrowing performance divergence between top- and bottom-performing Emerging Market (EM) countries in recent years.

Nov 07 2017

Stock Market Observations

  • Nov 7, 2017

We remain bullish on stocks but with very limited visibility into 2018.

May 05 2017

Another Leg Down In Crude?

  • May 5, 2017

Remember the special amplifiers used by the fictional rock group Spinal Tap that could be dialed up to eleven? S&P’s decision last year to designate Real Estate as a full-fledged sector means that our GS rankings can now be dialed down to eleven, and unfortunately the Energy sector has been a frequent occupant of that undesirable spot.

Aug 05 2016

Divergence Among Quality Factors

  • Aug 5, 2016

Performance and valuation of the three Quality factors are diverging. From a valuation standpoint, we might see a reversal in performance, with the Stability factor weakening and the Leverage factor strengthening.

Jul 08 2016

Low Vol Divergence, Episode 3

  • Jul 8, 2016

The divergence between S&P 500 Low Volatility and High Beta Indexes has emerged for the 3rd time in a year. The 3-month performance spread is even more extreme than it had been on the eve of either the August or December stock market air pockets.

Nov 06 2015

What’s Driving EM Currency Weakness?

  • Nov 6, 2015

A strong dollar and low commodity prices are major forces dragging down EM currencies across the board.

Sep 09 2015

August Was No Anomaly

  • Sep 9, 2015
We might be sympathetic to the bulls’ rationalizations if the August decline had materialized out of thin air. But it didn’t. It has been many months (and probably longer) in the making.
Aug 07 2015

Stock Market Observations

  • Aug 7, 2015

The U.S. stock market has largely shrugged off the latest round of worries related to China’s stock market collapse, the new down-leg in crude oil, a more hawkish tone in Fed-speak, and sizable second-quarter declines in S&P 500 sales and earnings.

Aug 07 2015

Value, Momentum, And The Stock Market Cycle

  • Aug 7, 2015

Conventional measures of market action, like breadth and industry leadership, point to the formation of a bull market top. Divergences abound.

Jul 09 2013

Major Trend Moves To Neutral, But Not All Hope For The Bulls Is Lost

  • Jul 9, 2013

Deteriorating Technicals drove the move to Neutral, but a new positive reading in the Attitudinal category gives some hope to the bulls.

May 01 2013

The Disappearing "Large" Effect And Emerging Market Performance

  • May 1, 2013

While U.S. stocks have surged this year, Emerging Markets have languished. What is going on in Emerging  Markets to cause this unusual situation?

Dec 05 2007

Momentum/Breadth/Divergence Category Moves To Negative Ground

  • Dec 5, 2007

With this category now breaking into negative territory, we thought it would be interesting to look back at the other periods when the Momentum/Breadth/Divergence category shifted from a positive net reading to negative.

Dec 05 1994

Major Trend Index Negative

  • Dec 5, 1994

Bond market decline may be in find stages, but stock market can stilll fall 20%- 25%, even if bonds stabilize in coming months.

Jun 03 1982

The Major Trend: Still a Bull

  • Jun 3, 1982

Down more than expected in May but the Major Trend Index remains decisively bullish. Early Warning Index at +10, -3, combined with sentiment and momentum work leads to a conclusion that current decline may be about over, with market rallying again later in June. Advise accumulation.