Research Report Excerpt #1 A perfect depiction of setup years is recognizable in the table below, which we’ve offered in past reporting: At its “closing” lows on March 14th, the S&P 500 (SPX) was down 12.4% before the renewed strength. It’s been the 4th worst start to a year since 1928. As the table above clearly outlines, the…
Research Report Excerpt #1 It may prove counterintuitive to many market participants, but the higher the VIX moves, the better the long-term returns. Having said that, we may have to withstand more volatility as we trek through weekly headlines and a CPI delivery this coming week. With an average intraday trading range of 2 percentage…
In the short-run, it’s difficult to see an easy way out of the current geopolitical nightmare. The hopelessness of the day is often a precursor to the promise and eventual brighter, and better future. Most people get up in the morning looking to better themselves, better their future (Nick Maggiulli). That’s how society propels itself…
Research Report Excerpt #1 Lastly, we hear a lot of chatter surrounding China and the potential for the CCP to model what Russia is attempting to do with its war on Ukraine. We are not of the viewpoint that China will look to reacquire the independent Taiwan as Ukraine is attempting to do with Ukraine.…
Research Report Excerpt #1 Heading into 2022, we understood that the historic potential S&P 500 returns surrounding midterm cycles and Year 2 of Presidential cycles usually deliver higher volatility and lesser returns. There were no guarantees that history would repeat, but the seasonal cycles suggested that a strongly profitable 2021 should reinforce year-end rebalancing ahead…
Research Report Excerpt #1 As detailed since late last year, this is the S&P 500’s fourth longest run without a 10% pullback (~22 months vs. ~1 per year). Since 1980, the S&P 500 has averaged a 14% drawdown annually. As of Friday’s close, the S&P 500 has traveled 460 trading days without a 10% correction…
Research Report Excerpt #1 The data remains our guidepost (S&P 500 forward returns after falling below 200-DMA above table), which was a message also highlighted in Fed chairman Jerome Powell’s press conference this past week. So I ask of you, “If the Fed remains data-dependent, then why shouldn’t you? Furthermore, if much of the pessimism around…
Research Report Excerpt #1 In order for drawdowns to not become realized losses, sometimes we also have to elongate our time frame. You’ll find that to be the case when markets come under pressure, as they have in 2022. This is obviously not a new concept, but a concept that many traders and investors haven’t…
Fed Funds Rate History The charts below show the targeted fed funds rate changes since 1971. The Federal Open Market Committee (FOMC) didn’t announce its target interest rate after meetings until October 1979. The Fed adjusted the rate through its open market operations. Banks were forced to guess what the rates would be as a result. The Fed…
Research Report Excerpt #1 It’s important to respect seasonal patterns/data, but the seasonal data is often best utilized when pared with other quantitative studies/data. When it comes to the January Barometer, this may be especially true. The catch is the January Barometer has been broken lately. In fact, a lower January for the S&P 500 has been bullish…
