The Rubber Band of the Market is Stretched Too Far

By John Del Vecchio and Brad Lamensdorf This week’s Chart of the Week dovetails with our analysis of Warren Buffet’s favorite indicator and shows that market valuations are in the nosebleed section. The chart below is courtesy of Advisor Perspectives and Crestmont. As the chart shows, the price / earnings ratio is over three standard…

Odds Favor Short-Term Bounce before Hitting a Ceiling

By John Del Vecchio and Brad Lamensdorf The market got very oversold last week. Just like a rubber band being stretched too far in one direction, it will snapback hard when the energy is released. Markets often operate the same way. Below is the TIR Indicator which measures short-term overbought or oversold conditions. The TIR…

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…

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…