Don’t Short the QT Hangover

By Kevin Muir

I love the ocean which is ironic as I live on a Great Lake more than 1,500 kilometers from the Atlantic. But you put me anywhere near an ocean and I guarantee it – I am jumping in. It doesn’t matter if the water is 15 degrees, I have to go for a dip.

Not having grown up with all the ocean-life, I try to rationalize my slight fear of sharks by convincing myself that my apprehension is like many other people’s fear of bears. Having spent many weekends at a cottage in the Canadian wilderness, I probably have an overly casual attitude towards bears. To me, they are just big raccoons. Yeah, a hungry grizzly deserves your complete and total respect, but most black bears want absolutely nothing to do with humans. After seeing dozens upon dozens in the wild, you realize they are not so scary. And this logic is what I use when thinking about sharks. Most of them want nothing to do with you.

However, I recently stumbled upon this research group that tracks different sharks, but specializes in Great Whites.

Continue reading Don’t Short the QT Hangover

Thanksgiving Week Seasonality – An Updated Look

By Rob Hanna

The time around Thanksgiving has shown some strong tendencies over the years – both bullish and bearish. I have discussed them a number of times over the years. In the updated table below I show SPX performance results based on the day of the week around Thanksgiving. The bottom row is the Monday of Thanksgiving week. The top row is the Monday after Thanksgiving.


Monday and Tuesday of Thanksgiving week do not show a strong, consistent edge. But the data for both Wednesday and Friday looks quite strong. Both of those days have seen the S&P 500 rise over 70% of the time between 1960 – 2017. The average instance managed to gain about 0.3% for each of the 2 days. (This is shown in the Avg Profit/Loss column where $300 would equal a 0.3% gain.) That is a hearty 1-day move. Meanwhile, the Monday after Thanksgiving has given back over half the gains that the previous 2 days accumulated. It has declined 66% of the time and the average Monday after Thanksgiving saw a net loss of 0.37%.

Continue reading Thanksgiving Week Seasonality – An Updated Look

Frightful Possibilities

By Tim Knight

[biiwii comment: it’s a Slope of Hope 2-fer this morning… ]

A Santa Claus rally. A trade deal between China and the U.S. A straight shot to 3,200 on the S&P 500. The bullish stories are flooding the airwaves. After all, the vast majority of “traders” and “investors” have never experienced a bear market before. Equities dipped a little in October, and people don’t like it. So they’re trying to wish it away.

Maybe they will. Maybe the won’t. We remain at a crucial juncture. Last week was largely a waste of time. We did get a nice selloff on Monday, but after that, it was a circle jerk, with desperate rumors from D.C. about a trade deal attempting to prop things up.

On the ES, the two tinted areas are all I care about right now. If, God forbid, we cross above the yellow tint at about 2757, the bulls are going to grab the baton. It wouldn’t take much in the way of news to make it happen. Another plausible rumor about China would do the trick, although the way Pence is handling it, maybe I shouldn’t worry so much. A failure of the green line at 2711 would shove a silver stake through the pattern’s heart.

Continue reading Frightful Possibilities

The History of Russell 2000 Death Crosses & SPX Performance Following Them

By Rob Hanna

I have seen a fair amount of hubbub about the Russell “Death Cross” that is happening today and the potential bearish implications for the market. A “Death Cross” is a catchy (though perhaps not terribly accurate) term for when the 50-day moving average of a security cross below its 200-day moving average. It is being promoted as a warning of a potential bear market. Of course all bear markets will see this happen at some point, because a bear market is an extended decline. But the real question when considering the implications of the Death Cross are whether it serves any value in predicting a bear market. To answer this I did an examination of past Russell Death Crosses, and what they meant for the S&P 500.

Both of my data sources show Russell data back to late 1987. And since I need 200 days to calculate a 200-day moving average, the earliest the study could look back to was 1988.

Continue reading The History of Russell 2000 Death Crosses & SPX Performance Following Them

Sector Shorts: Technology

By Tim Knight

Preface to all sector posts: I’m not going to dance around it: I am very short again. I have 99 different short positions and am aggressively positioned for the week ahead. I have gone through all my charts and have broken a portion of them into distinct sectors. Here is the next gallery, and as always, you can click on any thumbnail for a larger image. You can scroll left and right through the gallery.

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A 20-Day Closing High On A Follow Through Day (FTD) Has Provided A Bullish Edge

By Rob Hanna

One notable bit of evidence that emerged on Wednesday was the fact that it qualified as an IBD Follow Through Day (FTD). I have done a lot of research on FTDs over the years. Much of that research can be found here on the blog. Unusual about this FTD is that it occurred in conjunction with SPX making a new 20-day high. This triggered the study below, which I last discussed in the 10/19/2011 blog.


Results here are impressive over both the short and intermediate-term. To get a better feel for the short-term returns I have listed the instances below.

Continue reading A 20-Day Closing High On A Follow Through Day (FTD) Has Provided A Bullish Edge

Midterm Elections Have Not Provided A Reliable Short-Term Market Edge

By Rob Hanna

Today I decided to look at SPX performance following past mid-term elections. I did not find much that suggested a strong edge. Below is a look at results since 1970 following mid-term elections.


The numbers suggest perhaps a mild inclination for the market to “celebrate” the results on Wednesday. After that there does not appear to be a strong tendency in either direction. Below are the 1-day instances listed out for those that are interested.

Continue reading Midterm Elections Have Not Provided A Reliable Short-Term Market Edge

This Incredibly Bullish Seasonal Period Has Just Begun

By Rob Hanna

With the calendar moving from October to November, it has now entered its “Best 6 Months”. The “Best 6 Months” tendency was first published by Yale Hirsch, founder of the Stock Trader’s Almanac, in 1986. The concept behind the “Best 6 Months” is simple. Seasonality suggests that over the last several decades the market has made a massive portion of its gains between November and April. And during the remaining 6 months, it has generally struggled to make headway.

Additionally, the market shifted into the 3rd year of the Presidential cycle. Here at Quantifiable Edges we measure the Presidential Cycle years from November – October rather than January – December. That allows the cycle years to better match up with the elections, which take place in early November. It also makes for easy evaluation when combining it with the “Best 6 Months” cycles. The 3rd year of the Presidential Cycle has been a strong one.

When the Best 6 Months and the 3rd Year of the Presidential Cycle have been active at the same time, the results since 1960 have been outstanding. In the table below I have listed out each instance.


Continue reading This Incredibly Bullish Seasonal Period Has Just Begun

Obi-Ed Update

By Kevin Muir

Chatting with my good trading buddy Patrick Ceresna of MacroVoices and BigPictureTrading fame yesterday and he said to me, “what’s with this crap (ok, he didn’t use the word crap, but let’s pretend) with you being so negative? I am supposed to be the bearish one.”

It made me laugh, and I started to worry that I might be overstaying my welcome on the dark side.

Although I love my good friends at Marketwatch, I doubly worry when I see headlines like this (click here for full story:

So yeah, I am paring back some of my bearishness this morning, and let me tell you one of the reasons why.

I am a big Ed Yardeni fan. And I am especially enamoured with what he calls his “Fundamental Stock Indicator.” I have written it up in the past, so if you want a full explanation, please visit Obi-Ed’s Magical Indicator.

Continue reading Obi-Ed Update