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Jan 13 2023

Is This Year’s Strong Start “Signal Or Noise?”

  • Jan 13, 2023

This year is off to a much stronger start than suggested by the 3-4% gains in the blue-chip averages: Through January 12th, the Value Line Arithmetic Composite—an equally-weighted index of about 1,700 stocks, was up 7.0%.

Dec 01 2022

Jay Powell, The Chartist

  • Dec 1, 2022

When Jerome Powell took the reins of the Federal Reserve in early 2018, many commentators cheered the fact that he does not possess a Ph.D. in Economics. It will be many, many years before historians are able to conclude whether that’s a good or bad thing.

Yesterday’s action, though, left us wondering whether Powell might stealthily be in the process of earning a different designation—that of Chartered Market Technician (CMT). 

Nov 05 2022

VLT: A Double-Sworded Edge

  • Nov 5, 2022

“Oversold” usually has a positive connotation in financial jargon, yet history’s worst air-pockets have almost always occurred when the stock market was deeply oversold. More time is needed before a “low-risk” entry point for the S&P 500 will be triggered from the VLT’s currently “oversold” status.

Jun 07 2022

What Will A Low “Look Like?”

  • Jun 7, 2022

We think it’s much too early to be looking for a major bottom in stock prices, but it’s worth reviewing some of the signals that will help confirm such a low is at hand.

Mar 05 2022

Don’t Fight The Tape?

  • Mar 5, 2022

Longstanding concerns over the stock market’s lofty price tag are frequently dismissed with the observation that “valuations are not helpful timing tools.” We don’t disagree. In that spirit, then, let’s review three simple trend-following models that have been useful timing tools.

Jan 14 2022

Limping Into Wildcard Weekend With A Compound Fracture

  • Jan 14, 2022

We wrote in the latest Green Book that a breadth indicator that should be more well-known than it is—the High/Low Logic Index (or HLLI)—had moved to “maximum negative” right at the cycle high in the NASDAQ Composite on November 19th. Specifically, the 10-week moving average of this indicator showed a perilous internal condition in which too many NASDAQ stocks were reaching 52-week New Highs and New Lows simultaneously. That’s the very definition of a “fractured” market, and has preceded some important NASDAQ declines. There have also been a couple of premature warnings, as in the summers of 1996 and 2019.


Sep 08 2021

Let Us Add To The Bullish Cacophony

  • Sep 8, 2021

It’s been a heck of a stock market year, and there are still four months left. What else could go right? Monetary conditions, for one thing—at least as proxied by our Dow Bond Oscillator (DBO).

Aug 06 2021

Smarter Than The Bond Market?

  • Aug 6, 2021

The half-percentage-point drop in the 10-year Treasury yield, since mid-March, has investors worried about “what the bond market might know” that the stock market doesn’t. Maybe it’s time to stop lionizing the bond market’s prescience and give the stock market its due.

Mar 12 2021

Stocks And Yields Revisited

  • Mar 12, 2021

The S&P 500 and 10-Year Treasury bond yield could accomplish something fairly rare today by closing at “joint” 52-week highs. The relevant levels to meet or exceed are 3934.83 on the S&P 500 and 1.49% on the bond yield.

Jun 26 2020

Should You Trust The Thrust?

  • Jun 26, 2020

During the first two months of the rally (and +30%) off the March lows, we noted that the usual cyclical leaders of a new bull market were underperforming on a relative basis, and there had been nothing even close to the “breadth thrust” that often accompanies an initial bull market up-leg.

Jan 08 2019

Watching For An Internal Washout

  • Jan 8, 2019

Having monitored market internals for warning signs for longer than we care to admit, it’s refreshing to turn around and watch many of the same signals for… wait for it... BUY signals!

Nov 07 2018

Bond Investors Get It Right Again!

  • Nov 7, 2018

Having devoted all of our professional lives to the monitoring and modeling of equity markets, we’re naturally ticked off that this year’s best stock market signals have in fact been rendered by bonds.

Feb 05 2016

Learning From Failures?

  • Feb 5, 2016

There’s an old trader’s adage which holds that “the most powerful sell signal is a failed buy signal.” Last fall we noted that European equities and Small Cap Value had triggered BUY signals on our Very Long Term (VLT) Momentum algorithm.

Dec 08 2015

BUY Signals In A Topping Market?

  • Dec 8, 2015

Here’s an example of just how disparate underlying market action has become: with the S&P 500 only 2% away from a cycle high, several major U.S. and foreign market indexes have already moved into an oversold position on the basis of our Very Long Term (VLT) algorithm—with a few (including EAFE, Chart 1) actually triggering “long-term, low-risk” BUY signals in the last two months! We are not sure what to make of this action.

Oct 07 2015

A Whimpering Sell Signal...

  • Oct 7, 2015

It’s been more than two years since NYSE Margin Debt broke out above its 2007 high, and we remember the rash of bearish commentary that accompanied that milestone. We later showed the Margin Debt increase was almost perfectly proportional to the gain in the stock market itself, and not a reason to turn bearish in and of itself. But our tune has changed.

Jul 08 2015

A BUY Signal That Says SELL?

  • Jul 8, 2015

Last month we discussed the negative market implications of May’s “Death Cross” signals in the Dow Transports and Dow Utilities.

Jun 02 1999

VLT Momentum Buy Signals...Good News For Small Cap Fans

  • Jun 2, 1999

Maybe we are too cautious about calling a turn in relative small cap performance. VLT work on Russell 2000 and Value Line now both giving buy signals.

Oct 05 1994

Major Trend Deteriorates In September, Remains Negative

  • Oct 5, 1994

Major Trend Index deteriorated by 591 points in September, and remains quite decisively in negative territory. We continue to approach equity investing with a great deal of caution, operating in a bear market mode.

Jul 05 1993

Early Warning Index

  • Jul 5, 1993

This aspect of our work has not been particularly helpful recently, even though it at times has been quite productive in years past. We can't squeeze blood out of a turnip and in recent years we haven't been able to squeeze a 7%-10% correction out of the low volatility market.

Nov 05 1992

Questions Clients Are Asking

  • Nov 5, 1992

Since the Milwaukee poll taken in early October, it appears that optimism has continued to build. This opinion is supported by the kinds of questions we are now fielding from clients.

Dec 05 1991

“When The Bears Have Thanksgiving…..”

  • Dec 5, 1991

As I recall, at one time I checked out the accuracy of this stock market folklore and it seemed to work pretty well. I think it will prove true again in 1991.

Sep 05 1991

August: A Dull Month (Except for Four Days)

  • Sep 5, 1991

If you had been vacationing on an island with no communication during the last two weeks of August, you’d think from the month to month statistics that August 1991 was a big late summer yawn.

Nov 01 1990

Major Trend Index Improved, But Still Negative

  • Nov 1, 1990

This issue marks the first anniversary of the most recent Major Trend Index sell signal, transmitted to clients on Halloween 1989. Here in October 1990, this work has improved significantly from a month ago.

Apr 01 1989

VLT Momentum: Based on DJIA Monthly Averages

  • Apr 1, 1989

In the fall of 1988, this publication detailed a very reliable long-term stock market indicator we call VLT momentum. Herein, we present the record tracking back to 1897, employing average monthly prices in the calculation rather than month end prices.

Mar 01 1989

Three Steps and Stumble

  • Mar 1, 1989

The most recent rise in the discount rate triggered the “Three Steps and Stumble” rule. Years ago, Edson Gould popularized this theory. In effect, it is based on the assumption that tight credit ultimately terminates a bull market.