• The Bullish Case: A Mental Exercise

    February 05, 2016 BY Doug Ramsey

    We’ve been correctly positioned near our tactical portfolios’ equity minimums, yet we’re oddly compelled to use this month’s “Of Special Interest” section as a very public second-guessing of that move.

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  • Of Special Interest

    Knee Deep In An Earnings Recession

    January 08, 2016 BY Phil Segner

    It’s a scary thought but what does 2015 have in common with the infamous years of 2001, 2008, and 2009? An earnings recession for the S&P 500 — and the 2015 vintage certainly has some unique traits.

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  • Bonds

    Market’s Message To The Fed: Stop The Tightening!

    February 05, 2016 BY Chun Wang

    We think the Fed’s projection of four more hikes this year is absolutely unachievable, and we are no doubt siding with the market’s current projection of one hike, at most (if any), this year.

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  • Stock Market

    There’s Always A Hook...

    February 05, 2016 BY Doug Ramsey

    Bear markets need a “hook”—some sort of misdirection that keeps the majority hoping. Our work suggests a primary bear market is underway, and we fear oil is this bear’s hook…but the problems run deeper than oil.

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  • Stock Market

    NYSE “New Lows” Figures Point To “Lower Lows”…

    February 05, 2016 BY Doug Ramsey

    At the August and late January S&P 500 lows, both the Daily and Weekly NYSE New Lows figures exceeded 40% of Issues Traded —a degree of downside thrust rarely seen outside of bear markets.

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  • Stock Market

    Too Early To Dethrone Dividend Stocks?

    February 05, 2016 BY Jun Zhu

    In the context of a low growth/low inflation environment, with the Fed taking its time to guide rates upward, fixed income type of investments may pale by comparison to dividend paying stocks.

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  • Major Trend

    Major Trend Index Decisively Negative

    February 05, 2016 BY Doug Ramsey

    The MTI fell deeper into bear territory during a horrendous market month. The 0.80 ratio is consistent with an ongoing primary bear market—and so are many of the moves by various MTI categories.

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  • Equity Strategies

    Revenge Of The Gamers

    February 05, 2016 BY Kristen Hendrickson

    Despite the already strong performance over the last three years, this group has recession proof attributes, positive industry trends, and widespread areas of potential growth.

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  • Major Trend

    MTI Readings Characteristic of Ongoing Bear

    January 27, 2016 BY Doug Ramsey

    Based on data through last Friday, the Major Trend Index rose 0.07 points to a ratio of 0.80. It benefited from a huge jump (115-points) in the Attitudinal category and a solid gain in the Intrinsic Value work. Steady improvement in these countertrend categories, combined with deeply negative readings in the Momentum/Breadth/Divergence work, is characteristic of an ongoing cyclical bear market; the body of evidence suggests it’s still too early to hit a major low in equities.

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  • Inflation Watch

    Inflation Lower Than Expected

    January 21, 2016 BY Chun Wang

    Inflation was lower than expected in December.  The three key drivers for inflation this year are oil, the Dollar and the Chinese yuan. None of these are helping so far.  We have been avoiding inflation sensitive assets and do not see any reasons to catch the falling knife at this point.

     

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  • Equity Strategies

    GS Scores Perform Well In 2015

    January 08, 2016 BY Greg Swenson

    The Attractive-rated groups outperformed the Unattractive groups by 15.5% in 2015. This is the third positive year in a row, and the best performance differential since 2008.

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  • Equity Strategies

    Financials Strengthen; Regional Banks Purchased

    January 08, 2016 BY Kristen Hendrickson

    Financials rose in December to rank #1 among sectors for the first time since the start of the financial crisis. In-line with our quantitative disciplines, we added a new Financials group to the Select Industries Portfolio: Regional Banks.

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  • Stock Market

    Not A “Stealth” Decline Any Longer...

    January 08, 2016 BY Doug Ramsey

    The most compelling evidence that a bear market is underway may not be what’s been punished (Transports, Small Caps), but what hasn’t. We believe the final bull market highs of any composite or sector index were recorded on December 29th.

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  • Stock Market

    Annual Industry Group Dreams & Nightmares

    January 08, 2016 BY Kristen Hendrickson

    A review of the past year’s performance of “Dream” and “Nightmare” equity groups from back in 2014.

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  • Stock Market

    Opportunities Among Chinese Companies Going Private

    January 08, 2016 BY Jun Zhu

    As another Chinese stock market drama is unfolding, we may see a repeat of last summer’s action, where U.S.-listed stocks with pending “going private” deals saw their discounts widen significantly.

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  • Bonds

    2016 Time Cycle—Not Likely To Be A Typical Year

    January 08, 2016 BY Chun Wang

    The 2016 pattern looks good on paper, but if the excitement in the first week of the year is any indication, we highly doubt 2016 will turn out to be another typical election year.

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  • Inflation Watch

    Inflation Watch-Remains In Line With Expectations

    December 16, 2015 BY Chun Wang

    Inflation was largely in line with expectations in November.  The impact of lower energy prices seems to have lessened as the year-over-year comparison gets better.  We are far from ready to call a return of inflation. The ISM price indexes supported our still cautious view towards inflation.

     

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  • Market Internals

    Earnings Momentum

    December 08, 2015 BY Phil Segner

    The second month of Q3 2015 earnings reports registered an Up/Down Ratio of 1.11. On its own, the month of November was particularly weak with a stand-alone Up/Down Ratio of 0.97.

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  • Stock Market

    Tracking The Stock Market Top

    December 08, 2015 BY Doug Ramsey

    While the sequence of index peaks traced out YTD is not exactly a textbook one, the market’s internal diffusion is comparable to that seen at many major tops, including 2000 and 2007.

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  • Stock Market

    Stick With What’s Working (Until It’s Not)

    December 08, 2015 BY Doug Ramsey

    The year has been especially tough on managers who might have shared our cyclical worries over the stock market, but who’ve elected to stay fully invested via seemingly lower risk value approaches.

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  • Equity Strategies

    Construction & Engineering: “Unloved” Opportunity?

    December 08, 2015 BY Kristen Hendrickson

    After nearly six years, the Industrials sector has reclaimed a top three spot among the GS Score’s Broad Sector Composite rankings—six of the sector’s 18 groups rank Attractive and two are in High Neutral. Construction & Engineering, an Industrials sector group, offers diversity in several ways—from the nature of its underlying businesses, and through areas of strength supporting the GS Score factor categories.

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