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1993_walmart Everyone says they’d like to buy blue chips on a pull back. The problem is that it take a lot to disrupt the returns of these glacial behemoths. So when they do pull back, they don’t look so nice from a fundamental or chart perspective. $WMT has some stink on it right now. It’s useless to get into all the…

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In light of new highs and significant volatility the last couple of weeks, we wanted to take a look ahead at a couple potential scenarios for the market. Below is what we have been chewing over, ordered by what we feel is more probable. Choppy consolidation and grind higher. At the beginning of the year we saw a minor V-shaped…

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The chart below is from a report I ran on early in the week while watching, in mild disbelief, the market march higher. The study examines all post-crisis corrections exceeding -7.5% downside in 20 days. The sample was small, but the result was timely and useful in managing expectations of what a bounce might look like (despite what we may…

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The jobs report temporarily sent the indices roaring, but under the hood the market lacked breadth. Today we gave back -1.5%. The dogma of BTFD appears as solid as ever. There are two timely questions: 1. Is there enough passively allocated money coming into the market to overwhelm sellers making this another “normal” pullback (4-5%)? 2. How does the market…

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nfp-all-october-2-2014 The NFP report (Employment Situation) is released on Friday before the open and here’s what we know: EVERYONE will be watching the report. Whether you realize or not, investors on virtually all time frames have place big bets on the report (economic health of the US). The numbers are overrated and overhyped but still more than capable of moving markets…

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$EBAY announced this morning they’re planning on splitting off the Pay Pal division into a separate publicly traded company next year. The market sees this as a major positive for shareholder value, and the stock has created a large gap up in the chart. First, a quick analysis of price action in the immediate aftermath of $EBAY historical upside price…

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death-top-hat A “Death Cross” is a hilariously ominous name for a technical market condition where the 50-day moving average crosses below the 200-day moving average. One just occurred in the Russell 2000 Small Cap Index $IWM. Despite what you may have heard in the financial media, this sinister and devastating menace is about as harmful to your investments as regular portfolio…

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Yahoo retains a 22.4% stake in Chinese e-commerce giant, Alibaba Group Holding. Yahoo’s stock climbed by over 5% on news of  Alibaba’s expected IPO price range of $60 to $66. image00 Monday’s trading was a massive price range with plenty of volume ($40.34 to $41.81). This means there are plenty of investors jockeying on both the long and short side of…

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The $SPX was off by ~2% today so we ran a study of every time that has happened in the last 4-years. It’s pretty easy to ask Market Memory what happens 5-days after a selloff like this. The result is below: Look closely at the Alpha Curves (pattern recognition algo) showing the most dominant patterns in the data set. The…

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The spread between domestic large cap stocks ($SPY) and small cap stocks ($IWM) has reached a statistically significant level.  These ETFs have an economic and statistical correlation which bounds their relative performance and there is good evidence to suggest they mean revert from extreme circumstances. Over the few months the large cap $SPY has greatly outperformed the small cap $IWM.…

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highfreqdata Moar GDP revisions, that’s what we need (said no one)! The Atlanta Fed has introduced a new dataset called a “nowcast” for GDP called GDPNow. A nowcast is economic model that produces predictions without the need for any human judgement. This model will produce publicly available nowcasts of GDP 5-6 times per month as a supplement the traditional report-and-revise system…

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VXX-wasteland-Market Memory For the past couple years, being short volatility has been a popular and successful strategy for traders. So successful that brokers started regularly pitching short VIX strategies (mostly involving options) a couple years ago to funds as an easy way to generate returns (and commissions for the broker). When trades look easy to everyone it’s usually not the end, but…

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