Stocks & Bonds

August Seasonality: Strong And Weak Trending Stocks

A new month is here. So it’s time to take a look at some stocks and ETFs that show strong and weak seasonality trends for the month of August. Let’s look at the data tables below and provide some august seasonality stats and insights. Strong August Seasonality A couple of items worth noting: Stocks/etfs like Eldorado Gold (EGO) and iShares 20+Year Bond Fund (TLT) have shown strong August seasonality trends

S&P 500 Study: Bounces Follow Drops In Market Breadth

Today’s stock market plunge raises the prospect of buying when the crowd is panicking. I’m not ready to make any broader comments about the current market outlook. But here are some numbers for swing traders to consider if the market and market breadth figures stay down as we near the close this afternoon. I did a market breadth & timing study based on the following strategy: buy the S&P 500 Depository

Is Margin Debt Flashing A Major Warning Sign For Stocks?

NYSE margin debt for June just came out and it surged 5.9% from May and is now just 0.3% away from the March peak. Let’s dig into the data and see if this is reason for investor concern. Margin Debt Since 1995   Margin debt has long been used as a contrarian indicator over the years,  with the thinking being once everyone is on margin this is a sign of

Potential Warning Signs For Investors

There have been some interesting developments in the markets during the past few weeks.  They could be signaling some warning signs, so I’d like to bring these developments to your attention with some charts I’ve been watching. Let’s get right into it. The first set of charts takes a look at the retailers via the Retail Index ETF (XRT).  As you can see from the chart below, the XRT found

Semiconductors: Is the Charge About to Die?

In striking contrast to 2014′s dominant theme of “record low volatility” and the numbingly granular tedium with which it has been analyzed, some US equity sectors and industries have never stopped partying following 2013′s outlying bullish performance. A few have left pundits perplexed (e.g. Utilities continues to outperform it’s sector peers year-to-date), but others are held up as an affirmation that the post-crisis cyclical bull market – now well into

Why Higher Stock Market Highs Matter

One of the most important traits of successful traders and investors is they think in probabilities. Markets have many moving parts and thus take on various shades of grey; set-ups are never binary or black and white. Why Do We Care About Higher Stock Market Highs? Higher highs remove the possibility of a lower high. A lower high increases the probability of bad things happening. The chart below of the

Follow The Leader: What’s Next For The Nasdaq 100?

If you haven’t noticed, large cap tech stocks have been on fire of late. And there’s no better measure for this sector than the Nasdaq 100 (NDX). Check this out:  Since mid-April, the Nasdaq 100 is outperforming the S&P 500 by almost 2 to 1 and the Dow Jones Industrial Average by almost 3 to 1. And since the equity markets typically only go as far as its leaders take

Why The VIX Could Stay Low For Years

Ah, the VIX.  Everyone’s favorite fear/greed instrument, but in reality it is probably one of the most misunderstood things in all of finance. So many have incorrectly (for years now) said a low VIX is bearish, because it shows everyone is complacent.  This just isn’t true.  The Volatility Index (VIX) is simply a measure of how much traders are willing to pay for various S&P 500 options over the next

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