• 707 days Will The ECB Continue To Hike Rates?
  • 707 days Forbes: Aramco Remains Largest Company In The Middle East
  • 709 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,109 days Could Crypto Overtake Traditional Investment?
  • 1,114 days Americans Still Quitting Jobs At Record Pace
  • 1,115 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,119 days Is The Dollar Too Strong?
  • 1,119 days Big Tech Disappoints Investors on Earnings Calls
  • 1,120 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,121 days China Is Quietly Trying To Distance Itself From Russia
  • 1,122 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,126 days Crypto Investors Won Big In 2021
  • 1,126 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,127 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,129 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,129 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,133 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,134 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,134 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,136 days Are NFTs About To Take Over Gaming?
Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

  1. Home
  2. Markets
  3. Other

The Bullish Case for Equities

Our indicator constructed from the trends in the CRB Index, gold, and yields on the 10 year Treasury has not been in the extreme zone for 8 weeks now , and within the context of a trend following strategy that I have detailed here, here, and here, the SP500 should have a positive bias. In essence, with prices on the SP500 above its 40 week moving average and our indicator not in the extreme zone, prices should move higher. The trend remains up and inflation pressuresare neutral. This is the bullish case for equities.

But let's me be clear about one thing: the gains that equities might enjoy are unlikely to be as great or as accelerated as if the market is coming off a bottom. With rising bullish sentiment and less money on the sidelines, stocks just won't have that "uumph". Gains are possible but not at the rates that are seen at market bottoms.

The indicator constructed from the trends in the CRB Index, gold, and yields on the 10 year Treasury is shown in the middle of a weekly chart of the SP500 in figure 1. I last discussed this strategy (click here) 8 weeks ago in the context of "buying the dip".

Figure 1. SP500/ weekly
SP500/ weekly

 

Back to homepage

Leave a comment

Leave a comment