The Dow Jones Industrial Average hit a new 3-year high, but the Transportation Average retreated after recently confirming the advance. This refined divergence signal acts as a participation-quality warning, historically pointing to weaker returns and severe tail risks near major cyclical peaks.
The so-called "Summer Rally" period approaches. Does it really matter? Herein, we examine the history of this period and how it has performed relative to the rest of the summer months. Several long-term tendencies emerge.
The High-Low Logic S&P 500 with Spike model has flashed a tactical risk-off signal amid an elevated 50% composite risk count. History warns of a split market setup prone to near-term corrections.
While five independent macro signals and long quant models support the primary S&P 500 uptrend, four key breadth indicators warn of upcoming sideways-to-lower chop. Meanwhile, commodities like Corn and Coffee face severe seasonal downside.
With corn futures entering their most unfavorable seasonal period of the year, already in an established downtrend, traders should look for opportunities to play the short side in the months ahead.
The Nikkei 225 has hit fresh all-time highs above 71,000, but fewer stocks are participating in the rally. Historical backtests show these breadth divergences are not reliable bearish warnings, though meaningful tail risk persists.
Coffee futures are experiencing a violent relief rally driven by adverse weather in Brazil. However, quantitative data shows buying this momentum breakout historically yields an unfavorable risk/reward profile, warning of a potential bull trap.
Part I of this two-part series highlighted a variety of indicators that suggested higher stock prices twelve months from now. Conversely, the indicators covered in Part II suggest that there may be some bumps in the road over the next six months. The overall message is one of "Manage your expectations and choose your strategy wisely."
A macro trading model measuring the short-term spread between long-dated Treasuries and crude oil triggered a new bullish signal. After similar alerts of falling oil and yields, the historical outlook for the S&P 500 and growth-oriented sectors looks outstanding.
