• Apr 17, 2019

    Yield Curve Finally Inverted

    After years of flirting, the yield curve finally inverted. For the next decade, the U.S. government can borrow at a lower interest rate than it can for the next three months. The bears have been quick to point out the 10-year to 3-month yield curve’s track record for predicting recessions and market performance. The emphasis for the past two years has been on the near-inversion of the 10-year to 2-year yield curve.
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  • Apr 10, 2019

    What's The Cause Of The Market's Reversal?

    The first quarter was a mirror image of 2018. Stocks went back to beating bonds and six out of eight major asset classes posted gains of at least 5%. A typical U.S. 60/40 portfolio (S&P 500 Total Return/Barclays U.S. Aggregate Bond Total Return) put in a strong performance for the quarter at 9.29%, above its long-term historical gain per annum of 7.77%, and recouped the losses from Q4 and more.
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  • Apr 04, 2019

    Best Start for S&P Since 1998

    The S&P 500 Index gained 13.1% in Q1, the best start to the year since 1998, 21 years! When the S&P 500 has gained at least 10% in Q1, it has risen the last nine months of the year 85% of the time by a median of 7.0% versus a median of 6.2% for all Q2-Q4s since 1926.
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  • Apr 04, 2019

    Choppy Markets Ahead Following a Strong First Quarter

    The market is positioned for a strong year in 2019, but with the first quarter being as strong as it has been we think the next couple of months will show a sideways-to-choppy market. Even with a short period of consolidation, there are a lot of reasons this market can move higher in the next couple of quarters.
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  • Apr 04, 2019

    Try A Lookback

    Weekly momentum indicators reach 92%, a relatively rare ‘good’ overbought reading - While our tactical outlook is watching for a pause and/or pullback in early Q2 remains on track, the far more important point is that these high momentum readings have coincided with the early stages of new market cycles which occurred in 1987, 1998, 2002, 2009, 2010, 2011, 2016 and 2018.
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  • Apr 04, 2019

    Multi-month Period of Consolidation Ahead

    Heading into Q2, equity markets are likely moving into the early stages of a multi-month period of consolidation. This could be due to intermediate-term/weekly indicators, tracking 1-2 quarter shifts, moving toward overbought levels, similar to what developed in the early stages of the cycle lows in Q2 2016.
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  • Apr 04, 2019

    Market Overbought, But No Sell-Off in Sight

    The market is bouncing off resistance and is overbought like we have been writing about. However, overbought is a good thing in this case as we do not see a major sell-off happening, just normal back and forth as the market builds up enough steam to break out of this area of resistance.
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  • Apr 04, 2019

    Modest Period of Consolidation Expected

    The S&P 500 is overbought and a pullback is warranted, but with that said, rather than a big pullback, we are expecting a modest period of consolidation. After the 19% waterfall selloff last year, the market has been set-up with good odds to move much higher over the next 12 months.
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