Unintended Consequences of Quantitative Tightening

ByBrad Lamensdorf

In 2008, to stave off the worst financial crisis since the Great Depression, the Fed began a program of “quantitative easing” to save the economy, eventually buying trillions of dollars of government bonds and mortgage-backed securities to keep interest rates low. Now amidst strong economic growth the Fed has initiated a program of “quantitative tightening,”…

Intermediate Market  Sentiment Indicator  Says “Be Cautious”

ByBrad Lamensdorf

Intermediate term market sentiment indicator  is  flashing warning signs to be cautious.  The Investors-Intelligence polling of more than 150 market newsletter writers shows they are very optimistic. That is a warning sign from a contrarian point of view since they historically are wrong. Some 62% of the newsletter writers were bullish and only 18% were…

Why We Should Worry A Lot about Today’s High Debt Levels

ByBrad Lamensdorf

The dot com and housing bubbles of the recent past were marked by big increases in debt for those sectors, followed by sharp economic and market declines.  Today, debt is spread across many areas (See chart below). And that is extremely worrisome for the economy and the markets from a historical point of view.  For…

Market Sentiment Gauges Suggest Caution

ByBrad Lamensdorf

Intermediate-term sentiment gauges are at lofty levels, signaling investors should be very cautious. Investors Intelligence is reporting that 59% of the more than 100 market newsletter writers it follows are bullish and 18% bearish. That is a strong warning signal since these writers historically have been wrong about market direction. We should note that the…

Sentiment Indicators Say Stock Investors Should Be Cautious

ByBrad Lamensdorf

Short-term indicators of investor sentiment came in mildly bearish last week, pretty much unchanged from the week before. The Ned Davis Research (NDR) short-term sentiment indicator was at 60, slightly below the previous week. The CNN Fear Greed gauge was slightly higher at 72. Intermediate indicators remain in bearish territory. The NDR Crowd Sentiment is…