Latest Research

In mid-summer we suggested that attaining new market highs would probably require a rotation away from the long-time Low Volatility market leaders and into High Beta areas like Technology and industrial cyclicals.

One never appreciates what he or she has until it’s gone. In our case, during the many years it was freely available, we failed to appreciate the zero interest rate. Now that it’s gone, we already feel pressured to join a game where we (and very few others) have any edge: Fed-watching. Our real edge is that we recognize this.

Allow us to put forth yet another theory for this season’s plummet in NFL television ratings: Fed watching is back!

Airlines, Asset Management & Custody Banks, and Automotive Retail all have attractive Valuations and strong VLT Momentum.

We examine the recent strength in the Dow Jones Transportation Index and its underlying industries: Airlines, Railroads, Air Freight & Logistics, and Trucking.

Regardless of whether the reflation theme continues, high quality spread products should continue to do well.

· One bright spot in last month’s lackluster market action was that inflation sensitive assets saw impressive relative returns.

It’s a throwaway line to say the current bull market is the “most hated in history,” but consider that this hatred in and of itself has led to probably the most dangerous extremity in the stock market today.

The S&P 500 drifted gently lower in October as election uncertainty crowded out the story of a much better than expected start to Q3 earnings. The S&P 500 closed the month only 3% from its all-time high set in August.

Growth stocks, especially in the Small Cap tier, received an outsized punishment compared to Value. Looking at historical valuations, Growth remains cheap compared to Value.

Small Caps are selling at a 4% discount to Large Caps. Our Ratio of Ratios logged the sixth consecutive month of Small Caps sitting in the discount zone.

Our initial Up/Down Ratio for Q3 sports a reading of 1.78. This “one-month” reading is the highest its been in seven quarters.

Also known as smart beta or strategic beta, factor investing has become the hottest portfolio management trend in the last five years. The smart beta space exceeds $600 billion in assets under management.

The Major Trend Index fell 0.02 to a ratio of 1.27 for the week ended October 28, 2016. Movements within the indicator categories continued the trend of recent weeks, in which losses in the Momentum/Breadth/Divergence work have been almost entirely offset by gains elsewhere.

We’ve annoyed a few media outlets by admitting to having no clue as to which of the presidential candidates would be “better” for the stock market.

The Major Trend Index declined 0.01 points to a ratio of 1.29 in the week ended October 21st, marking the 12th consecutive week the Index has been above the 1.20 level.

Early in the third quarter earnings season, S&P 500 companies are providing a glimmer of hope that the long earnings recession may be ending. 

The Major Trend Index declined 0.01 to a ratio of 1.30 for the week ended October 14th. Large swings in the Attitudinal and Momentum/Breadth/Divergence categories largely cancelled one another out, and the remaining three categories were essentially flat.

Fed tapering of its QE3 asset purchase program ended two years ago this month, yet we don’t believe this episode has received appropriate recognition for the role it’s played in the relatively flat stock market environment that’s followed the onset of tapering in January 2014.