Pull the trigger with confidence.

I wrote here back in November 2024 about the seemingly silly correlation between rainfall in New York City and the behavior of stock prices.  It does seem like a silly correlation, but it is also an amazing one which has been "working" for decades.  After a while, if something keeps working, then I try hard to get over my preconceived notions about whether it is a correlation which is appropriate to exist.

This week I want to take that same analysis in a related direction, comparing New... Read More

Four weeks ago, I wrote here about how the 2-year T-Note yield is saying that the FOMC ought to cut rates at the July 30 meeting.  They did not listen then, and now the message from the 2-year yield is even more emphatic.  The FOMC could cut its Fed Funds target by a half point (i.e. 2 quarter point cuts at the same time) and they would still be higher than what the 2-year yield says they should be doing.  The 2-year T-Note yield seems to know better than the Fed's 400 PhD economists what the... Read More

Most of the time analysts speak of the stock market getting overvalued in relation to earnings, dividends, book value, or some other "fundamental" factor.  This week's chart looks at that question in a different way, comparing the current level of the SP500 to M2, as a measure of how much total "money" there actually is. M2 counts how much real currency exists (dollar bills), plus it includes things like checking account levels, money market funds, and other things which are fascinating to... Read More

News on tariff exemptions for certain tech companies helped lift the Nasdaq 100 Index (NDX) to a new all-time high on Aug. 7, 2025.  That index is currently 11% above its own 100-day simple moving average, which is pretty far up there. 

But this is happening with only some of the component stocks pulling their weight.  Apple, Microsoft, and Nvidia are doing fine, but this week's chart shows that a declining number of NDX component stocks are above their own 100-day MAs.  That number peaked... Read More

The NAAIM Exposure Index reached a high of 99.3 on July 2, and has been backing off since then even though the SP500 is going higher.  This condition has historically been a problem for the stock market.

NAAIM is the National Association of Active Investment Managers, made up of money managers who believe that they should not just buy and hold, but also to be in the market at the right times.  Each week they survey their members about their firms' average stock market exposure.  Answers can... Read More

I have been writing since 2009 about how the 2-year T-Note yield gives a great message about what the FOMC should do with its Fed Funds target.  It is gratifying to see how so many other analysts have now picked up on this topic.  Unfortunately, the FOMC has yet to do so, and the members and their 400 PhDs working at the Fed seem to think that they know better than the bond market.

Exactly how the 2-year yield seems to know ahead of time what the FOMC is going to (eventually) do is an... Read More

When the Fed first started doing "Quantitative Easing (QE)" in 2009, it was a new concept.  Nobody had ever seen the Fed do that before, so it was hard to know what the outcome was going to be.  We now have seen 4 different rounds of QE, and the conclusion is pretty obvious that doing QE boosts liquidity in the banking system, and it boosts the stock market.

Similarly, doing the opposite known as "Quantitative Tightening (QT)" takes away liquidity and hurts the stock market when the Fed has... Read More

Silver prices have been following gold's lead, pushing up to new all-time highs in 2025.  Silver's chart is a great picture of an uptrend, and you only want to fight an uptrend if you have a really good reason.  Some data from the latest COT Report might be that reason.

The Commitment of Traders (COT) Report is published every Friday by the CFTC.  It lists the quantities of futures contracts held by different groups of traders.  The latest COT Report had 332 different types of futures... Read More