November 5, 2018: member-only market studies


Here are the member-only market studies.
Let’s analyze the stock market’s price action by objectively quantifying technical analysis. For reference, here’s the random probability of the U.S. stock market going up on any given day, week, or month.

*Probability ≠ certainty.

10 year yield and stocks

As I mentioned in today’s free market studies, the recent correction is different from most corrections in that interest rates went up while stocks went down.
This is the free study:

Now let’s look at what the 10 year yield and other indices do next.
Here’s the 10 year yield. As you can see, the 10 year yield has a strong tendency to go down over the next 3-6 months, even during the 1970s when interest rates were in a bull market.

Here are the NASDAQ and Dow. Both of these indices tend to go up, but the NASDAQ’s forward returns are more consistently bullish than that of the Dow’s. And like the S&P, the NASDAQ and Dow tend to experience more short term weakness.

Emerging markets outperforming

In today’s free market studies we looked at what happens next to the S&P when the S&P:EEM ratio falls below its 50 day moving average for the first time in 6 months.

Here’s what happens next to the S&P:EEM ratio itself.

Here’s what happens next to EEM. As you can see, EEM doesn’t always go up. This is inherently logical. When something is as weak as emerging markets, it is often weak for good reason. Emerging markets have much weaker fundamentals than the U.S.

VIX

In today’s free market studies, we looked at what happens next to the S&P when VIX closes below its upper weekly Bollinger Band for the first time in 4 weeks.

Here’s what happens next to the Dow:

Here’s what happens next to the NASDAQ:

Here’s what happens next to the Russell 2000:

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