By Steve Blumenthal August 17, 2016 S&P 500 Index 2174 “Because for any given level of return, if you diversify, you can generate that return with a lower risk; or for any given level of risk, if you diversify, you can generate a higher return.  So it’s a free lunch.  Diversification makes [...]Read More >

August 12, 2016 By Steve Blumenthal “We’ve been bulls on 30-year Treasury bonds since 1981 when we stated, “We’re entering the bond rally of a lifetime.” “Their yields back then were 15.2%, but our forecast called for huge declines in inflation and, with it, a gigantic fall in bond yields to our [...]Read More >

By Steve Blumenthal August 10, 2016 S&P 500 Index 2156 Technically, the S&P 500 Index looks strong.  The price trend, as measured by the 13/34-Week MA (posted below) turned positive in late March 2016.  My favorite “weight of evidence indicator,” the CMG Ned Davis Research Large Cap [...]Read More >

By Steve Blumenthal July 27, 2016 S&P 500 Index 2166 The “Don’t Fight the Fed or the Tape” indicator is showing the strongest reading in some time (+2).  The reading has been +1 for a number of months.  Note in the following chart that such readings have happened only 5.74% of the time [...]Read More >

July 22, 2016 By Steve Blumenthal “We’ve had a lot of QE and we are not sure if it works.” - Former Dallas Fed President, Richard Fisher (Source) One of the best reads for me this week came from the creative pen of Danielle DiMartino Booth.  She was an analyst at the Dallas Federal Reserve for [...]Read More >

By Steve Blumenthal July 20, 2016 S&P 500 Index 2167 I like to think of this weekly process as a risk management dashboard.  Of note this week is the extreme level of investor optimism.  Generally, such readings are short-term bearish for equities and suggest a pause or correction within [...]Read More >

July 15, 2016 By Steve Blumenthal I don't know how to love him, What to do, how to move him. I've been changed, yes, really changed. In these past few days when I've seen myself I seem like someone else… Should I bring him down? Should I scream and shout? Should I speak of love - let my [...]Read More >

By Steve Blumenthal July 13, 2016 S&P 500 Index 2150 There are no major changes this week; though, daily investor sentiment is nearing Extreme Optimism.  The cyclical trend for U.S. equities remains bullish.  With valuations high (and they could go higher), risk remains high.  Hedge any [...]Read More >

July 8, 2016 By Steve Blumenthal Bonds are what they are. Today, they are less than what they are. It is said—nothing is ever new under the sun of finance… but we do live in a unique time in two critical ways—interest rates and monetary moment. A few years ago, a book appeared called A History of [...]Read More >

By Steve Blumenthal July 6, 2016 S&P 500 Index 2083 Bonds, utilities and gold show the strongest relative price strength. On the equity front, investor sentiment remains extremely pessimistic, which is short-term bullish for equities. You’ll find the most recent valuation updates in [...]Read More >

July 1, 2016 By Steve Blumenthal “We recognize that our EU policies aren’t working for everybody. That’s okay. We just have to figure out how to make sure that everybody gets what they need, even if it means less control from Brussels.” -European Union’s founding members: Belgium, France, [...]Read More >

By Steve Blumenthal June 29, 2016 S&P 500 Index 2061 High Yield hit stop-loss levels and is back to a sell.  Investor pessimism moved to extreme.  Such periods of extreme pessimism have historically been short-term bullish for equities.  High-quality bonds remain in a buy signal.  The [...]Read More >

June 24, 2016 By Steve Blumenthal  “Italeave, Finish, Czechout, Oustria, Byegium and Departugal.” -- Wilfred Frost, CNBC, June 24, 2016 Brexit!  The world markets are in shock.  What’s next?  You'll find my thinking below.  This is day 1. There is more to come. I’m en route to California [...]Read More >

By Steve Blumenthal June 22, 2016 S&P 500 Index 2088 HY moved back to a buy signal early this week.  The asset class tends to be a leading indicator of both economic and stock market direction.  We had a great run and we are pleased.  Right now, the signal is for more “risk [...]Read More >

June 17, 2016 By Steve Blumenthal “Everyone focuses on the Fed’s balance sheet – the $3 trillion dollars and the problems that creates.  Don’t forget there is another balance sheet – that’s the balance sheet of us in the market that sold them the bonds and were forced into the risk assets that [...]Read More >