About Me

Retired chief investment officer and former NYSE firm partner with 40 years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Thursday, October 08, 2015

Tale Of The Tape: Stock Market

The Fed wisely put off raising the Fed Funds rate at its recent FOMC meeting. As a consequence, the
US$ has continued a modest downtrend, and this has sent mild risk - on signal to the markets. The
SPX has entered a correspondingly modest but volatile uptrend. SPX Daily

The 25 day m/a has turned up, and the VIX volatility or "fear" index has retreated from the late Aug.
spike up to 40 down through the technically important level to a more moderate 17.5 (bottom panel).
The market is now moderately overbought short term on a momentum basis at 3.1% above its 25
day m/a and in view of the spike in MACD. A fair number of traders would like to see another test
of the correction lows below 1880 given the extant volatility and the suspicion that even if the
market may strengthen later this year, the correction may need more time to run its course on a
seasonal basis. It hard to pound the table in opposition to this view. I am more interested in  how
the SPX will perform against its 200 day m/a when that day comes. This challenge may be a little
ways off, but when it comes it will be important, since failure to take out the "200" would be a
bearish signal.

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