SentimenTrader Blog


2019-12-12 | Troy Bombardia | Premium

Here's what I'm looking at:Smart Money ConfidenceThe stock market surged in November, pushing Smart Money Confidence to one of the lowest levels in years. Now that stocks are swinging sideways, Smart Money Confidence is starting to rise a bit. Is this the all-clear sign for stocks?The following table looks at what happened next to the S&P when Smart Money Confidence rose above 0.3, after being low for a prolonged period of time (i.e. a prolonged an incessant rally):As you can see, the S&P's ...

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2019-12-11 | Jason Goepfert | Daily Report

Bond fund manager Jeffrey Gundlach uses a ratio of copper to gold to forecast interest rates, and currently, smart money hedgers are betting on copper and against gold; More than 30% of financial stocks recently hit a 52-week high, the most in a year; The OECD Leading Indicator is turning up; Stocks have struggled after FOMC meetings

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2019-12-11 | Jason Goepfert | Study

As the WSJ noted, the OECD Composite Leading Indicator is showing signs of stabilization. While it isn't particularly effective at timing market tops, upturns in the OECD Composite Leading Indicator after a long downturn usually marked bottoms in the global economy.When the OECD Composite Leading Indicator turns up for the first time in more than 18 months, the S&P' returns over the next half year were mostly pristine since this typically happened after a recession.See this premium note for ...

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2019-12-11 | Jason Goepfert | Lite

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Hedge? What’s That?For most of 2019, hedge funds employing different strategies all were seemingly avoiding stocks. Their sensitivity to movements in the S&P 500 were very low, or even negative at points during the year. That recently changed in dramatic fashion, with their estimated exposure ramping up to the highest level in years.It’s not a perfect ...

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2019-12-11 | Troy Bombardia | Premium

With stocks barely moving, here's what I'm looking at:OECD Composite Leading IndicatorAs the WSJ noted, the OECD Composite Leading Indicator is showing signs of stabilization. This indicator looks at Consumer Confidence, interest rate spreads, new orders, manufacturing, among others. While it isn't particularly effective at timing market tops, upturns in the OECD Composite Leading Indicator after a long downturn usually marked bottoms in the global economy. Here's a longer term look at this ...

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2019-12-10 | Jason Goepfert | Daily Report

Hedge fund exposure to stocks has been low all year, but has made a sudden about-face, with the most exposure now in a couple of years; The S&P 500 keeps trading at or near new highs while fewer than 60% of NYSE common stocks close above their 200-day moving averages; The SKEW index hit a 1-year high; Copper hit a 6-month high

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2019-12-10 | Jason Goepfert | Lite

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.Leaving earlyInvestors have pulled hundreds of billions from equity funds in 2019, despite large gains in the funds. Because the gains have been so large, the outflows are small as a percentage of total assets.Still, it’s an outflow, and stocks have a good record of rallying after any year that saw a net outflow from equity funds, with no losses a year ...

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2019-12-10 | Troy Bombardia | Premium

Here's what I'm looking at:SKEWThe SKEW Index, which looks at the risk of a black swan event in equities over the next 30 days, jumped to the highest level since October 2018:When this happened in the past, the S&P's returns over the next 2 months were worse than random, suggesting that it was better to hold bonds than stocks. In addition, returns over the next year were mostly bullish, with the exception of October 2001. That bearish case occurred in different environment from today: stocks ...

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2019-12-09 | Jason Goepfert | Daily Report

Wall Street strategists are pricing in only a small gain for the S&P 500 in 2020, about half the gain they normally estimate; Investors have pulled billions from equity funds in 2019 despite good gains, and a net outflow has been a good sign; Hedge funds are ramping up their exposure to stocks; Nonfarm payrolls climbed to a 10-month high

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2019-12-09 | Jason Goepfert | Lite

This is an abridged version of our recent reports and notes. For immediate access with no obligation, sign up for a 30-day free trial now.More splits than a gymnastDifferent parts of the bond market are seeing vastly different treatment from investors. Riskier, lower-credit parts of the market are seeing low demand and heavy selling pressure while higher-rated bonds are being bid up to a record degree.There has been this wide of a disparity only 3 other times in 25 years.All three of them ...

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