Tag Archives: divergence

8 Recent Cautionary Articles on Trader Edge

Happy New Year! As I mentioned in my holiday greeting, I had to deal with a number of issues in 2015 that limited my research (and writing) efforts. As a result, I had a backlog of several important market-related insights … Continue reading

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Posted in Article Links - External, Economic Indicators, Fundamental Analysis, Market Breadth, Market Commentary, Market Timing, Options, Relative Strength, Risk Management, Technical Analysis | Tagged , , , , , , , , , | 1 Comment

Declining Earnings in an Overvalued Market

Earnings are the single most important factor in stock valuation. Stock prices may diverge temporarily from earnings, but prices eventually correct. FACSET is one of the leading providers of software, research, analytical tools, and data for investment professionals. They publish a … Continue reading

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Bearish Market Breadth

Market breadth is one of the most reliable leading indicators of market reversals and major market turning points; breadth looks particularly ugly right now. There are many different ways to look at market breadth; we will review several in this … Continue reading

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Commodity Bloodbath in 2015

In July 2015, I wrote a post on the linkage between commodity prices and stock prices during five periods of declining commodity prices in the past 35 years: 1980-1982, 1984-1986, 1997-1998, 2008-2009, and 2014-201. I concluded that four out of … Continue reading

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Transportation Sector – Ominous

I wrote an article yesterday about the growing divergence between the junk bond and equity markets. There is a second divergence within the equity market that is equally ominous.

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Junk Bond Meltdown

I initially discussed the implications of widening junk bond spreads in a prescient September 2015 post titled “Widening Junk Bond Spreads: Bull Market in Peril,” which was inspired by a MarketWatch article titled “Junk Bond Market: Danger Ahead,” written by … Continue reading

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Earnings and Revenues Decline While Prices Rise

I have written a number of recent articles about the troubling state of the equity markets. There have been many causes for concern: technical, fundamental, valuation, divergences, and global risks, among others. All of these are important, but none are … Continue reading

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Extreme Divergence: Negative Equity Returns Ahead

Many traders use technical and/or fundamental data, but few traders have discovered the unique benefits of using sentiment data in their investment process. Sentiment data attempts to quantify the emotional mood of investors and traders and can be used as … Continue reading

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Posted in Market Commentary, Market Sentiment, Market Timing, Risk Management | Tagged , , , , , , | 2 Comments