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Category: Equities

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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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 […]

When Mean Reversion Fails

Are equities overvalued? Is the economic expansion long in the tooth? — In attempting to answer these questions, we often look to averages: -What is the average valuation? -What is the average length of an expansion? We then take the present environment and compare that to the average past to make definitive statements about the […]

“October: This is one of the peculiarly dangerous months to speculate on stocks. The others are July, January, September, April, November, May, March, June, December, August, and February.” – Mark Twain The words “dangerous” and “stocks” used to be synonymous. That equities were a risky investment was a given. All that seems to have changed. […]

 “Markets don’t crash from all-time highs.” This old saying is making the rounds again. Why? The Dow just closed at an all-time high for the 8th consecutive trading day and 34th time in 2017. That’s a lot of all-time highs, and it comes after the 122 all-time highs in 2013-2016. We haven’t seen this many […]