Trader’s Narrative

If you are trying to time the stock market, you obviously have to take a look at and analyze the stock market. But a little followed indicator that has nothing to do with the stock market has historically provided amazing insight into future equity returns.
For those unfamiliar with it, the yield curve is the visual […]

According to seasonality, we are coming into the time of the year when it has historically been a good time to be long bonds:

But seasonality isn’t everything. It is only one piece of the puzzle and even at that, it is anaverage of many years, smoothing out the year to year volatilities.
I disagree with it […]

So the Fed had a working weekend. On Sunday they cut the discount rate by a quarter percent to 3.25% and today, they cut the Fed Funds rate by 75 basis points to 2.25%. The market almost unanimously rejoiced and rushed to buy with both hands, eventhough the Fed Funds futures indicated most were expecting […]

Bernanke could have made his Humphrey Hawkins testimony today before Congress simple by showing them this chart:

Ever had a puppy that somehow got away from the leash? You know how every time you approached it to try to reattach the leash, it thought you were playing a game of “chase” and ran away? Well, the […]

The bond market and the stock market are intimately intertwined. But how exactly they influence each other is often complex. The dynamic nature of their relationship makes it even more difficult to read the market’s tea leaves. As soon as you think you’ve figured them out, the interplay among them changes and the game starts […]