• 253 days Will The ECB Continue To Hike Rates?
  • 253 days Forbes: Aramco Remains Largest Company In The Middle East
  • 255 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 655 days Could Crypto Overtake Traditional Investment?
  • 660 days Americans Still Quitting Jobs At Record Pace
  • 662 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 665 days Is The Dollar Too Strong?
  • 665 days Big Tech Disappoints Investors on Earnings Calls
  • 666 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 668 days China Is Quietly Trying To Distance Itself From Russia
  • 668 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 672 days Crypto Investors Won Big In 2021
  • 672 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 673 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 675 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 676 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 679 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 680 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 680 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 682 days Are NFTs About To Take Over Gaming?
Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

  1. Home
  2. Markets
  3. Other

a Confession

a Confession

Consider me still an atheist here. A chosen sinner - so to speak. Bereft of faith and comfort in the equity markets almost endless and droning bid. Four, five, six, seven - perhaps even eight sessions of strength later, confirms that it's the cadence of the market's sermon, that frictions against my own understanding of the universe's balance. The closer we get to the heavens, the more I can see their scaffolding. Absence of faith - this is not normal, healthy or sustainable. Taken in context - the charts back up this theory. With that said, ignorance is bliss - and a sincere kudos for those that went along for the last part of the ride.

From the perspective of an outlier within the range - this past week is in rare company. Below is a Bollinger series of charts of a wide variety of markets and asset classes that all display extended moves outside of the bands. While it is not uncommon to find one market or asset outside from time to time - it is quite unusual to see them all register at once. While I imagined a blowoff top in early December - this has become a move only the true believers could embrace. Again, I envy their faith - if only from a distance.

XLF

VIX

TNX

SPX

TLT

NDX

TRAN

Interestingly, the only major index that has not exhibited a move beyond the Bollinger bands is the Russell 2000. And although Goldman just gave the green light for scooping up small caps at these heights (based on their relative underperformance), my research points to perhaps an oversight in that thesis. Namely, the secular pivot that appears to be taking place in the relative outperformance of large caps versus small caps. For the last six or seven years we have heard from many an analyst of this almost mystical dynamic that never quite materialized.

"We recommend - high quality large cap dividend stocks..."

As it did last time, it appears to be taking place alongside a pivot in the dollar.

RUT

SPX:RUT U.S. Dollar

Incorporating my work on silver and gold over the past few weeks, I do believe its message to the bulls has fallen on deaf ears. That message being - volatility in the precious metals and commodity markets, typically presages volatility in the equity markets. And just as silver provided a false breakout to traders a few weeks back (culminating in a move outside of the Bollinger band) - the equity indexes appear to be completing the same pattern.

SLV

Silver Silver:Gold Ratio

XLF XLF:SPY Ratio

As always - stay frosty - but with a warm heart.

 

Back to homepage

Leave a comment

Leave a comment