Tag Archives: Technical Analysis

Who brought the Grinch to a usually Happy December Markets – Three Possible Items

As we have mentioned here and here, November and December are historically the best times for markets, with the latter having pole position.

While no one knows for certain, and we are watching a ton of different indicators, here are three items of note, worth reviewing.

Before we begin, earnings – one of the most important part of capital markets future, are still positive and this year looks to be one of the best on record!

Three Grinch items to review

Inversion Watch – 10 year treasury yield

We have spoken tons of time about the inverted yield curve and a major part of that curve as well as the inversion, is the current rate of the 10 year yield. This chart shows the recent movement of the 10 year yield moving down – this could be expectations of a slower future economy/growth OR it could be just some big money buying bonds – either way, a Grinch twinge to the capital markets.

12-11-18 Ten Year Treasury

Technical testing of markets

Oddly, even as we mention in this post the Grinch – in reality the capital market participants are taking their sweet time to test and re-test their levels – ignoring the happy months of November and December – Whatever makes you happy guys!

12-11-18 SP 500

Is Sentiment Grinchy? – Worth Watching

With 2/3rds of GDP (Gross Domestic Product) being consumer spending, consumer confidence is one of the most important parts of the economy – No Grinch here!

Capital Markets have forecasted many more bad times than have occurred – but in so doing they have also accurately forecasted “Bad Times!”  –  For now, we are doing our “No Grinch” dance, but watching closely and respecting all!

Have a Great “No Grinch” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.

The Four-Minute Mile Comparison Update – Key Levels Pierced – Technical Analysis Explained

While many professional investors, including ourselves, focus on longer term fundamental valuations and economic changes, it would be careless to ignore technical analysis, shorter term, emotional, and momentum side of the capital markets.

Technical analysis is a more pictorial view of the capital markets and attempts to explore and capture momentum and emotional feelings. While it is hard to explain technical analysis in logical terms, just as there is momentum in a football game or tennis match (hard to explain as well), there is also momentum in the capital markets. Key levels, in Wall Street Lingo, “resistance” and “support”, are often more easily observed in technical, or pictorial terms. In our early August 2010 post, we mentioned the 4 minute mile as a break through level for athletes many years ago.

The small equivalent of the four-minute mile in the capital markets today is the recent level shown in the attached chart, around the 1130 level on the S&P 500. Many may be more focused on the Dow Jones Industrial average, which is what most talk about when they say what the markets are doing, but the S&P 500 is a better indicator in our view. While the Dow is well over the 10,000 level, and many may think this is an important level, it is not at this level, as we have a more appropriate level of resistance that has been pierced earlier this week in the S&P 500.

Key Level Pierced

Does this mean it is all clear and we are off to the races?

Not a chance, this recent 4 minute mile piercing, means only the capital markets continue to have a more positive tone, as we had stated in our September 9th, 2010 post, and at this point we need more 4 minute mile piercings. Stay tuned as we end the end of the quarter, confront earnings season, and mid-term elections draw closer, all factors which will affect our future 4 minute mile racers.

Have a Good Day!