Stressed Out

Stressed Out

  We have found that interest rates tend to call the tune of the stock market. In particular, the stock market tends to get stressed out when interest rates rise rapidly. Why? One reason is that bond yields (i.e., interest rates) compete with stock dividend...
Easy (Money) Does It

Easy (Money) Does It

  The stock market runs on money. It prefers an environment in which liquidity is readily available and banks are flush with cash. So naturally, we look to the nation’s central bank, the Federal Reserve, for clues on liquidity. The Federal Reserve is primarily...
Global Breadth Thrust

Global Breadth Thrust

  This week’s indicator focuses on two important stock market forces: upside breadth and momentum. A stock with momentum means it is trading at a higher price level compared to its recent past. So, for the stock market as a whole, we want to see a lot of stocks...
Home on the Range

Home on the Range

  This week’s indicator is a particular type of momentum indicator called a stochastic oscillator. The idea is to compare the closing price of the stock market to a range of its prices over a certain period of time. This specific indicator looks at the range of...
Surprise!

Surprise!

  A lot of stuff in the financial world has to do with expectations. The stock market, for example, is based on expectations. It’s a forward-looking mechanism. This means that the price of stocks today reflects—among other things—what investors anticipate the...