The Palace Intrigue

The trading range is narrowing: The lines are converging on March 30. I suspect that sometime in the next week or so we will see a significant move in the Nasdaq. Will it be up or down? Tough to say. Generally when we see a symmetrical wedge pattern on the chart, we assume the breakoutContinue reading “SIGNIFICANT NASDAQ MOVE IMMINENT?”

This chart made rounds last year, but it deserves a re-up: During regular market hours (9:30am-4pm EST, M-F), markets have made basically zero gains since 1993. But outside of regular trading hours, meaning pre-market and after-market trading hours (4am-9:30am, 4pm-8pm), the market has gained nearly 600%. This is an eye-opening chart. So what does itContinue reading “ALL STOCK GAINS SINCE 1993 HAVE HAPPENED AFTER-HOURS”

The other day I wrote about the idea that stocks can’t be in a bubble if everyone knows we’re in a bubble. I argued that it’s indeed possible for a variety of reasons, but now we have this poll of fund managers from Bank of America that shows only 15% actually think stocks are inContinue reading “B OF A SURVEY: ONLY 15% OF FUND MANAGERS THINK STOCKS ARE IN A BUBBLE”

When it comes to markets, I try to be agnostic about the data. In other words, I try not to allow data to sway me too much, because for every data point and the accompanying conclusions about the market people draw from it, there’s usually a contradictory data-point out there that, accordingly, leads others toContinue reading “WHAT IF THE REOPENING DOESN’T LEAD TO A SPIKE IN INFLATION?”

Shiller P/E levels compared with the 10 Yr. yield by decade: Starting with 1870-1900, we can see that interest rates were falling, and stock valuations were rising. 1900-1920: Interest rates were on the rise, stock valuations were in decline. Remember that the Federal Reserve was founded in 1913, and it was just starting to comeContinue reading “A CLOSER LOOK AT INTEREST RATES & STOCK VALUATIONS”

This might be the most important chart of them all: Observations: In the 1890s, you can see that as interest rates dipped, stock valuations spiked. But then between 1900-1920, when interest rates were rising, stock valuations plunged. The Roaring ’20s coincided with falling interest rates. A miniscule uptick in interest rates in 1929 coincided withContinue reading “STOCK VALUATIONS VS. INTEREST RATES”

We might just be in the endgame now: Great headline by New York Times: a .JPG file just sold for $69 million. I think we’ll see this record broken at some point in the near future, too. We will probably see the first $100 million NFT.

That’s the common refrain from people who are skeptical of the claim we’re in a bubble. Before I get into my response, I want to first put out the disclaimer that I’m not 100% certain we’re in a bubble. I’m like 85% sure we’re in a bubble. But you have no way of knowing forContinue reading “HOW CAN WE BE IN A BUBBLE IF EVERYONE KNOWS WE’RE IN A BUBBLE?”

Monthly RSI on the Russell 2000 index is now at 74, which is higher than all but a few instances in the past 25 years: Here are the prior instances where Russell 2000 RSI was as high as it is today, and how long it stayed above that level: July 2 – Sept. 4, 2018:Continue reading “RUSSELL 2000 RSI REACHES RAREFIED AIR”

I saw this tweet a moment ago: They happen a lot during bear markets, in fact some of the greenest days ever come during bear markets. They trick bulls into thinking the selling is over with. Here’s Investopedia’s definition: A bear Market Rally refers to a sharp, short-term price increase in a stock or marketContinue reading “BEAR MARKET RALLIES (A.K.A. “BULL TRAPS)”

Recently I wrote that the Energy and Financials sectors are no longer undervalued and are in fact now getting into overheated territory. Tech is very overbought even still after this selloff. I wanted to look at the rest of the S&P 500 sector ETFs to see if any of them are decent values. My assumptionContinue reading “WHICH S&P 500 SECTORS, IF ANY, ARE BARGAINS RIGHT NOW?”

With still a half hour left til close, the Nasdaq is up 4.24%, the S&P is up 1.95% and the Dow, yesterday’s darling, was up 0.62%. Tech absolutely exploded higher today, led by Tesla which is currently up nearly 20% on the day. A lot of people are proudly proclaiming that the tech selloff isContinue reading “INSANE TECH P/E RATIOS EVEN AFTER SELL-OFF”

Much has been made about the sector rotation from tech to “value,” e.g. things like Energy, Financials and value ETFs. I already went over XLF in an earlier post, and concluded that it was highly overbought and all the “easy gains” have already been made. There is not a lot of upside left in XLF,Continue reading “TIME TO BUY “VALUE”?”

In 2020, Tesla represented 79% of the US electric vehicle market: The next-largest player in the EV market was Chevy with just 8%. At its peak share price of $900, Tesla had a market cap of $821 billion. After the recent sell-off, Tesla’s market cap is still a sizable $525 billion. What if, over time,Continue reading “IS THIS SUSTAINABLE?”

Dow at all time highs, Nasdaq down over 10%: Obviously stuff like this doesn’t happen very often, at least as it pertains to the Dow and the Nasdaq. So it’s difficult to take much from this data point because it happens so infrequently. Something is only predictive of future market direction if it is repeatedlyContinue reading “LARGEST DISCONNECT BETWEEN DOW & NASDAQ SINCE 1993”

Rejected: You can see that the ~12900 level, which has represented support 6 different times this year, is now acting as resistance for the Nasdaq index. That’s the neckline of the head and shoulders top. The Nasdaq got slammed today, losing 2.41% from its prior close, despite briefly rising all the way to 13001 inContinue reading “NASDAQ FAILS TO CLEAR NECKLINE RESISTANCE, CLOSES AT LOWS”

This graphic via Urban Carmel on Twitter: Other than 1994, rising 10 year yields are usually pretty good for stocks. The two best stretches of this current bull market other than the initial rally from the March 2009 bottom–2013 and 2017–featured rising bond yields. One thing I will say about the current stock drop asContinue reading “S&P 500 HISTORICALLY DOES WELL WHEN THE 10-YEAR IS RISING”

I recently watched the Bloomberg interview with Jeremy Grantham, the well-known investor who has been loudly predicting another 1929 or 2000-style market collapse. Whether you agree or disagree with his prediction, it’s still a great interview, and someone with the stature of Grantham should not be ignored when he issues major warnings about the market.Continue reading “HOW LONG DOES A MARKET TOPPING PROCESS TAKE?”

I know everybody likes Palantir. It seems like everybody is bullish on it. I routinely see videos on YouTube with people putting out stuff like “PLTR: $100 a share?!” People are insanely bullish on PLTR, and among the “Palantards,” it’s basically assumed that Palantir is set to be the next FAANG stock. As in it’sContinue reading “WHY I LIKE PALANTIR (FOR THE LONG-TERM)”

My last post about inflation was a lengthy, jumbled mess. It’s a complex topic to say the least. I just came across this post by Michael Batinick, though, and he says what I was trying to say much more efficiently and clearly. It’s an excellent piece and one I highly recommend reading in its entiretyContinue reading “CLARIFIED THOUGHTS ON INFLATION”

With the recent spike in the 10 year bond yield, many are talking about the prospect of increasing inflation in the very near future. Goldbugs and permabears have been predicting Weimar Germany-levels of hyperinflation since 2009, and while they’ve been continually proven wrong for over a decade, this time, they claim, they’re right: we’re aboutContinue reading “SHOULD WE BE AFRAID OF INFLATION?”

This morning was an absolute bloodbath. At one point TSLA was down over 10% on the day. PLTR was down more than 15% on the day. The Nasdaq dipped as low as 12397 before rallying over 500 points to finish 12920. From the lows to the close, it was a 4.3% rally, just ridiculous. DoesContinue reading “MARKETS STAGE MASSIVE RALLY OFF THE LOWS”

In my last post I laid out all the reasons I think the market will soon crash and enter a secular bear market of sideways trading for several years. In this post I want to lay out the counter-argument for why that’s wrong: If we entered a secular bull market in 2009, which was confirmedContinue reading “SELF-REBUTTAL: THE MARKET IS *NOT* GOING TO CRASH”

The market always reverts back to the Big Line eventually: That’s the trendline going all the way back to 1932. At the market bottom of 1942, prices were the same as they were in 1901. At the market bottom in 1974, prices were the same as they were in 1959. At the market bottom inContinue reading “IS THE MARKET GOING TO CRASH?”

While there’s no guarantee this is the end of the selloff in the markets, we have seen a nice turnaround in the Nasdaq starting this morning. After a sharp drop at the open, the Nasdaq index hit an intraday low of 12517, marking just shy of a 10% drop from its intraday all-time high ofContinue reading “BUY THE BREAKOUT IN XLF?”

My belief is that because the post-crash rally (late March 2020-present) was so blisteringly-fast, and because we are now already well above where we were pre-Covid in the markets, basically the entire Covid recovery, which is actually happening IRL in the next few months, is already priced in to the markets, essentially. The markets areContinue reading “IT’S ALREADY PRICED IN”

As you can see from the long-term chart, it has been quite the rally in the 10 year yield. But it also comes after a massive drop.

Lately there’s been a lot of chatter about cryptocurrencies. Bitcoin has been going bananas lately and now as of the time of this writing, one Bitcoin is worth nearly $50,000. At the same time, the most Memeable cryptocurrency around, Dogecoin, has exploded from being worth less than one penny to being worth around 5 cents.Continue reading “DOGECOIN vs. BITCOIN”

This might be the last post on this website, at least for a while. Look, I’m just done with politics. I have simply accepted the fact that we live in a deeply corrupt country where democracy is now a complete sham. We are every bit as illiberal as the places we Americans used to lookContinue reading “I’m Done With Politics”