Latest Research

Hard-core statisticians might be disappointed to learn that the 140-ish inputs in our Major Trend Index (MTI)aren’t entirely “independent and uncorrelated.”

Read this week's Major Trend Index.

For years, the Cabot Market Letter has tracked a “Two-Second Indicator” that’s based on the number of NYSE New 52-Week Lows.

Read this week's Major Trend Index.

While it’s not currently the most inflated measure among our Intrinsic Value readings, the S&P 500 P/E on 5-Year Normalized EPS has nonetheless just moved into its tenth historical decile. The latest reading of 23.6x ranks in the 93rd percentile of all observations dating back to 1926.  

Read this week's Major Trend Index.

Read this week's Major Trend Index.

Following 2016 underperformance, High Quality stocks eked out an advantage over Low Quality stocks to begin 2017 (+5.3% versus +2.1%, respectively). Yet, the “Junk Rally” trend seems difficult to reverse.

Quantitative investing has become an integral component of professional investment management, and smart beta funds have become popular vehicles for advisors as they assemble actively-managed client portfolios.

We’ve seen several pundits’ analyses of the “Sell In May” phenomenon of late, but none of them has addressed the most salient feature of this anomaly, which is that it’s historically been a predominantly Small Cap phenomenon.

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.

Ongoing investor obsession with stability strikes us as considerably more dangerous than the situation in the Tech sector. While many see market parallels with 1999, we instead see a mirror image.

The S&P 500 eclipsed the “Twin Peaks” (2000 and 2007 highs) in 2013, and two years later the NASDAQ topped its 2000 high.

We remain cyclically bullish on equities, but nonetheless like to engage in occasional downside “target practice” to shape our expectations for the next bear market.

Buying the S&P 500 on one of the worst possible days in history ultimately yielded a total return of +87.4% (+6.8% annualized) through the end of April 2017...darn, sounds like an advert for Vanguard!

The S&P 500 has labored beneath its March 1st bull market high for the last two months while underlying breadth and leadership trends have remained mostly favorable.

Bull markets bail out bad decisions—like buying the market high ahead of the Great Recession.

Value has taken its lumps to start 2017, but is it really that bad for the factor and its dedicated followers?

Mr. Market bumped his head for the first time in quite awhile. After a streak of five consecutive months with new all-time closing highs, the S&P 500 failed to break through the March 1st highs during the month of April.

2017 is shaping up to be a Growth story. Our Royal Blue High P/E Tier is outperforming the Low Tier by a spread of 10% only four months into the year.