Arms Index Climax May Signal Market Bottom

The Arms Index or TRIN is an indicator that I watch closely for short to intermediate-term setups. The indicator which combines ratios of advancing issues to declining issues and advancing volume to declining volume is a reasonably reliable contrary signal. Since mid-October the Arms Index has been generating a number of historically high signals. In the chart below, I used a 10 day exponential...

Bond Expert: Tuesday Wrap

Prices of Treasury coupon securities have posted another day of gains with the strongest advance in the belly of the yield curve. The 5 year note, the 10 year note and the Long Bond are all back within in a whisker of the lowest yields of the “modern” era.As I recounted in my opening most benchmarks opened better than late closing levels. The Bond was the lone exception as it suffer...

The Market's Fictitious Infallibility

Upon reflection, the odd thing about the past ten years is how I have felt about the market through much of this time. And my dominant feeling for the majority of the past ten years, depending on the market, has been “Wow, this market sure is stupid.”

Timing the Cycle: Mixed Messages

The recession officially began this past January, NBER tells us. With that out of the way, we can now focus on the burning question: When will it end?There are many clues for pondering the timing of the business cycle. Calling the turning point in advance is never easy, and in fact it's quite a bit harder these days. The magnitude of the economic and financial ills is to blame. In a perfect sto...

How Long Will the Recession Last and How Will the Market Perform?

Now that US economy is officially in recession, the big question on everyone’s mind is, how long will it last? So far, the current recession is the fourth longest in the past 80 years and its on track to be as long as recession in the 1970s and 80s, which lasted for 16 months. However we are still a long ways from the Great Depression, when the recession lasted for 43 months or more than ...

The Trouble with Recession Averages

Consider the following lovely chart (via Barry, via Financial Philosopher). It's cute, and helpful-ish, but it also points to one of the problems with all the current chatter about how long the average recession runs. Scan it first, and my commentary follows.

American Gloom Is Not the Gloomiest

New chart from McKinsey global economic sentiment survey showing that North America, surprisingly enough, is actually among the less gloomy places on the globe with respect to thinking that the economy will weaken further from here. Maybe that shouldn't have surprised me, but it did.

International Long Term Government Bond Rates

Given the sharp moves we've seen in the US Treasury market over the last several days, we updated our trading range charts of major international 10-year government bond yields. In each chart the blue shading represents 2 standard deviations above and below the yield's 50-day moving average. As shown below, the sharp declines have not been confined to just the US. In five of the six countries/r...

How Not to Bailout Detroit

Commence Kabuki. With the Detroit automakers in the late stages of supplication, a predictable ritual will now take place. The CEOs of GM, Ford (F), and Chrysler will do as instructed: travel like common men from Detroit to Washington and present the government with new-and-improved restructuring plans showing that this time, they really are serious about slaughtering sacred cows and right-sizi...

How Not to Bail Out Detroit

Commence Kabuki. With the Detroit automakers in the late stages of supplication, a predictable ritual will now take place. The CEOs of [[GM]], Ford (F), and Chrysler will do as instructed: travel like common men from Detroit to Washington and present the government with new-and-improved restructuring plans showing that this time, they really are serious about slaughtering sacred cows and right-...