Trader’s Narrative

The Federal Reserve continues to play catch up with the bond market. But with each successive rate cut, the fixed income market continues to stay one step ahead.
We still have an almost 150 basis point gap between the “risk free rate” (90 day Treasury Bills) and the intended federal funds rate - the blue line […]

Today’s market really tests any bullish resolve that may have developed over the weekend. The financials were especially hit hard due to reported layoffs at Citigroup (C) - the shares hit a five year low.
As I sift through the technical damage, the whole market seems extremely oversold. Taking a look at the percentage of stocks […]

The most recent consumer sentiment numbers from Reuters and the University of Michigan show an extreme pessimism. To be exact, in October, the “current conditions index” dropped to 91.0 while the “expected index” fell to 64.7 — the lowest since Hurricane Katrina.
We haven’t seen numbers like these since 2003 when the bear market gave […]

Things are getting very stretched towards the downside and the bears are having too easy a time. That is about to change if history is any guide.
The number of lows has ballooned to critical levels which usually have presaged snapback rallies. Also, Lowry’s research into the percentage of stocks above a moving average is compelling. […]

On light volume, the market closed strongly down today ahead of the US Thanksgiving holiday. The action brought about an acceleration in the number of new lows (52 week) relative to the number of new highs.
The ratio of new highs to new lows is one of my favourite technical indicators because it has an uncanny […]