Dow Bond Oscillator
Deflation And Deception
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We think the current economic cycle is more likely to end in a deflationary bust than with a bout of late-cycle “overheating,” and analysts and investors should recognize that such a cycle ending could be especially difficult to detect.
Mixed Monetary Messages
Confidence in the U.S. economy’s health reached a new peak with the April employment report, with a blowout number for nonfarm payroll coinciding with a soft wage print.
About That Great Jobs Report...
The December employment report temporarily eased fears of a severe U.S. slowdown. That’s a mystery to us.
Foreign Stocks “De-Coupling”
Market action has been broader and better than we expected given monetary conditions, and Small Cap strength seems to lend credence to contention that rates aren’t yet high enough to bite.
Breadth Is Great— Except Where It Matters The Most
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Last week’s piece challenged the now popular view that new highs for the Russell 2000 are a decisively bullish factor for the stock market in the near term. To our surprise, we found that market returns during periods of well-defined Small Cap leadership are significantly lower than when Smalls are laggards.
Should Bond Bears Barbell?
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The deterioration in stock market liquidity remains at the forefront of our concerns and is a key reason that the Major Trend Index is hovering just above its bearish threshold of 0.95...
Market Pressure Points?
Last month we detailed a handful of economic and monetary measures that were approaching critical thresholds from a stock market perspective.
Rates: Does Trend Or Level Matter More?
Our Dow Bond Oscillator (chart) issued what looks like an increasingly prescient SELL signal on January 26th.