Month: October 2017

Everything is Awesome!

The Dow has not had an intraday move greater than 1% in the past 51 trading days. That’s a new record. What was the prior record? A 50 trading-day run that ended in February of this year. In 2008, there was only a single trading day with an intraday range less than 1% (December 24, […]

When Does a Bubble Become a Bubble?

  • Bitcoin
  • Charlie Bilello

In July 2010, Bitcoin was trading at 5 cents. By February 2011 it was trading at $1.10. That’s a 2,100% return in 7 months. This is what the chart looked like at the time… What’s the first word that comes to mind? Bubble. Indeed, and over the next two months that bubble would burst, as […]

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One of the Most Overbought Markets in History

The Dow is trading at one of its most overbought levels in history. At 87.61, its 14-day RSI is higher than 99.999% of historical readings going back to 1900. Out of 30,914 trading days, that’s good for top 10 all-time. Sell everything? If only it were that simple. Going back to 1900, the evidence suggests […]

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When Backtests Fail

Let’s say you’re building a diversified portfolio and want to include European high yield bonds in the mix. What are you plugging in for an estimated return today? If you’re like most investors, you’ll look to a backtest to provide the answer, asking the following question: what have the returns been historically? With data going […]

The Year Volatility Died

When it comes to market volatility, how low is low? Before 2017, a close below 10 in the Volatility Index (VIX) was an extremely a rare event. It had only happened 9 times since 1990 out of 6,804 trading days. This is equivalent to 1 day every 3 years, or 0.13% of the time. A […]