zaterdag 29 juli 2017

Weekend Reading: Vacation Head

Let me just leave you today with one parting thought. The chart below is the S&P 500 on a WEEKLY basis going back to 1992. While it is clear the bullish trend is currently intact, which suggests the markets could indeed rise further, the deviation from the 1-year moving average is pushing more historical extremes... 


Furthermore, the two circles on the lower part of the chart show the longer-term “buy/sell” signals which have been historically accurate in adjusting risk in portfolios. As you will notice, just like in late 1998 and early 1999, there was a sell signal which was reversed WITHOUT the market dropping into a bear market. The subsequent rally pushed asset prices and valuations to extremes in early 2000. I don’t need to remind you what happened next. Currently, we see the same build up in exuberance, leverage, and speculation. The sell signal in 2015/2016 has been reversed following the Trump election. More importantly, just like in 1999, the indicators are running at historically very high levels. I probably don’t need to remind you what will happen next. It is just a function of time. In the meantime, the bullish trend remains intact.
# Politics / Fed / Economy;
- The Greater Moderation by DiMartino-Booth via Money Strong
- Partisan Conflict Is High by Jeff Sommer via NYT
- Fed To Start Unwinding Balance Sheet Soon by Akin Oyedele via BI
- Democrats Try To Rebrand Themselves As Populists via MarketWatch
- New Math Fetish Has Turned Economics Into Astrology via Aeon
- Gary Cohn Is The Wrong Choice For The Fed by John Tamny via Forbes
- Is The Economy Really Different This Time by Joe Calhoun via Alhambra Partners
- 4-Signs The Economy Is Stalling by Stephen McBride via Mauldin Economics
- The False Premise Of GOP Tax Cuts by Editorial via New York Times
- Fed Won’t Raise Rates Until Christmas by Pedro Da Costa via BI
- All Signs Point To Slowdown In Inflation by Lakshman Achuthan via Bloomberg
- The Quiet Demise Of Austerity by James McCormack via Project Syndicate
# Markets;
- What You Should Be Worried About by Mark Hulbert via MarketWatch
- How To Survive The Coming Market Storm via South China Morning Post
- ETF’s Are The Biggest Danger To Markets by The Heisenberg via Seeking Alpha
- Byron Wein Says Market In Uncharted Territory by Joe Ciolli via BI
- Will Perma-Bears Ever Learn by Taylor Dart via Seeking Alpha
- USD Breakdown, What Next? by Erik Swarts via Market Anthropology
- USD Close To The Edge Of The Cliff by Michael Kahn via Barron’s
- Wall Street Is Bracing For A Significant Correction by Steve Liesman via CNBC
- Earnings Outlooks Falling Rapidly by Anora Mahmudova via MarketWatch
- Why Financials Can’t Lead The Market Higher by Bryce Coward via Knowledge Leaders
- Over-valuation Not Due To Passive Investing by David Merkel via The Aleph Blog
- Stock Market Bulls Are Wrong, It Will End Badly by Doug Kass via The Street
- This Is Why It’s So Hard To Be A Contrarian by Stefan Cheplick via Medium
# Research / Interesting Reads;
- There They Go Again by Howard Marks via OakTree Capital
- Perceived Vs. Real Risk Tolerance by David Merkel via The Aleph Blog
- Dividend Cuts Accelerate In Q3 by Political Calculations
- 3-Examples To Consider In Retirement Planning by Paul Brown via NYT 
- FLASH CRASH: Seth Klarman Weighs In On HFT via Daily Reckoning
- 7-Habits To Help Your Kids Be Successful by Vanessa McGrady via Forbes
- The Reason Everyone Resents Millennials by Bill Murphy Jr via Inc.
- Student Borrowers Face Relentless Debt Collector via Reuters
- Taking Money Off The Table Is The Best Investment via Motley Fool 
- Maybe We Are Thinking About Productivity All Wrong via NYT
- If The Stock Market Makes You Rich, Why Are So Many Poor? via Market Watch 
- The Salient Features Of Past Bull Market Peaks by John Hussman via Hussman Funds
- Breakout Barrage, Is It Really Bullish? by Dana Lyons via Tumblr
- Podcast: William White On Experimental Monetary Policy via The Felder Report