10 Reasons Investor Confusion Reigns Supreme In 2014

Considering the way the markets behaved during the first half of the year, it should come as no surprise that there are high levels of investor confusion surrounding the near-term direction (and theme) of the markets. On a day-to-day basis, investor sentiment ranges from a head scratch to a high five to you gotta be kidding me.  Several technical and fundamental indicators have flashed caution to no avail. And this has given way to an

Managing Risk Through Unforeseen Events

The theory of “black swan events” was originally developed by Nassim Taleb to profile unexpected occurrences or rare events that few were able to predict or prepare for.  The recent tragedy of the plane crash along the Ukraine-Russian border that led to a swift global sell off is one such occurrence that caught nearly everyone off guard. And events like these add another element to managing risk. From a regional

What Does The Huge VIX Spike Mean For Stocks?

On Thursday, the S&P 500 dropped 1.18%, ending its streak of days without a 1% move (up or down) at 62 days in a row.  While this streak was significant and worthy of my attention (check out my Tumblr blog), something else occurred that day that caught my eye: the Volatility Index (VIX) spiked. In this piece I want to take a closer look at the VIX and market performance post VIX spikes.

Will China Be Joining The Great Rotation Anytime Soon?

Russian economist Nikolai Kondratiev identified long-term growth cycles (50+ years) in market economies almost a century ago.  And I believe the economic turbulence over the past several years is part of a global shift into the next Kondratiev Cycle.  For developed nations, this has been a drawn out and painful transition.  One byproduct of the current Kondratiev wave transition is the Great Rotation, a phrase highlighting the transition from long-term bonds

Is The SPX Up 5 Months In A Row Bearish?

The S&P 500 (SPX)  is up an incredible 5 months in a row.  That has to be bearish, right?  Most would think a market up ‘a lot’ is probably due to come back down and negatively impact S&P 500 performance thereafter. Makes sense, yes? But as Lee Corso would say, “Not so fast my friends!” First things first, here are the longest monthly winning streaks for the SPX going back

Is Investors Intelligence Poll Sounding Contrarian Alarm?

We’ve been seeing some very extreme readings from the Investors Intelligence polls lately and today I want to dig in and see what it might mean.  First off, the Investors Intelligence poll is officially known as the US Advisor’s Sentiment Report and it looks at over 100 independent market newsletters to assess their current stance on the market:  bullish, bearish, or correction. Like most polls, this has a contrarian nature

Large Cap Stocks Redefining “Risk-On” In 2014

Despite a quick wave of uncertainty and renewed European bank fears, U.S. equities continue to show resiliency in the face of selling. Especially large cap stocks: Although no indicator should be used in isolation, I think that it’s interesting to note that large caps are showing little deterioration thus far. On the flip side, high beta little brother, the Small Caps (as measured by the Russell 2000), are getting hit hard

Why Crude Oil Is Back On Investors’ Radars

The ups and downs of Crude Oil prices can provide a pretty good barometer of what to expect from the general market. Last August, I drew our attention to the oil paradox: The Oil Paradox is simply when demand confirms recovery early in a bull market cycle and prices continue rising until outsized input costs later precipitate a price fall. The tight band that Crude Oil prices travel depicts the consumer’s vulnerability in a steadily

Is Low Volume Signaling An End To The Bull Market?

One of the long used bearish points during this bull market has been volume is light.  The thinking is that low volume is a sign of a lack of participation. And that this will open the door for a big sell-off. The only problem with the low volume argument is we’ve been hearing it for years now. I remember back in September 2009 first hearing this while doing some bull/bear

Happy Days Are Here Again… Or Are They?

“Clap along if you feel like happiness is the truth … Clap along if you know what happiness is to you.” – Pharrell Williams Happy times are here again and the financial crisis seems like a distant memory, at least judging by record highs on the U.S. stock indexes. But is everything really hunky-dory? I might be crazy, but some interesting patterns I’ve noticed in consumer confidence and the velocity