Supply > Demand = Lower Stock Prices Ahead

By John Del Vecchio and Brad Lamensdorf It’s simple really. When supply exceeds demand, prices tend to head lower. Last week, The Chart of the Week highlighted Warren Buffet’s favorite market indicator. Valuations are stretched to say the least. Of course, what’s overvalued can become more overvalued before markets correct. This week we look at…

Market Sentiment  is No Where Close to a Buy Signal

Market Sentiment  is No Where Close to a Buy Signal.  The bulls dropped to 54.8%, from 59.0% last issue. Late Aug saw 61.5% bulls, their highest reading since Sep-2018 at 61.8%. (Mid Jan-20 saw them up to 59.4%.) Our rules says above 55% bulls needs defensive measures – tight stops at the minimum and possibly…

Buffet’s Favorite Indicator Screams “Sell”!

By John Del Vecchio and Brad Lamensdorf Buffet’s Favorite Indicator Screams “Sell”! The favorite market indicator of Warren Buffett, the richest investor in the world, has flashed a screaming sell signal. The total market cap of the Wilshire 5000 relative to gross domestic product (GDP), is now at generational highs. Take a look at the…

Fed Low-Interest Rate Policy is  Forcing Investors To Take Dangerous Investment Risks in Desperate Search For Better Yield

Fed Low-Interest Rate Policy is  Forcing Investors To Take Dangerous Investment Risks in Desperate Search For Better Yield. The 30-year  chart below shows US corporate bonds moving into negative yields.  That’s the result of the Fed policy to keep interest rates low to stimulate the economy. However, those  negative rates also are causing many individuals and institutional investors, including…

Despite Stock Market Downturn Investors Continue To Live in Fantasy World of Never-Ending Bull Market: Beware!

Despite Stock Market Downturn Investors Continue To Live in Fantasy World of Never-Ending Bull Market: Beware! We use  investor sentiment indicators as contrarian gauges on the direction of the stock market. That’s because most investors historically make decisions detrimental to their financial well-being. The numerous sentiment indicators we follow overwhelmingly have been warning of an…