Time to Be Alert!


This is the time to be alert for any signs of a failure in the S&P 500. Why? There are two really good historical precedents to the current market configuration. The set-up is as follows: stocks suffer a rather quick correction, bounce back, take out the previous lows and experience a waterfall decline. The period […]

Corrections Almost Always Test Lows Before They Are Complete

SPX Index (S&P 500 Index) Daily 2018-02-14 14-09-41

As we navigate a period of market turmoil, its important to remember that non-bear corrective phases typically last six weeks to two months and almost always include several substantial large rallies followed by selloffs back to the range of the initial low. Indeed, this classic give and take is how important bottoms are usually formed. […]

If This Correction is Over, it Will Be Unique in Leaving Most Individual Stocks Unscathed


There are many different ways in which we can measure the severity of a market correction. The absolute peak-to-trough decline is one way. Duration of the drawdown is another. But we can also measure corrections by taking note of the performance of individual stocks, in what is akin to looking under the hood. After most […]

This Selloff Has Yielded Important Information Content


This selloff is demonstrably different than other corrections the market has endured this cycle in one important aspect: it has inflationary rather than deflationary notes to it. This is an extremely important point of context because it tells us something about market participants’ anxieties. Specifically, it suggests that investors are more worried about an inflationary […]

Crypto-Crash Part 2


On January 17, I wrote a blog titled “Crypto-Crash” (link: http://blog.knowledgeleaderscapital.com/?p=13867) where I speculated that the next stop for Bitcoin would be $8,000. On that day Bitcoin touched $9,100 and then bounced back to $12,000. It has since been range bound between $10,000 and $12,000… until today. Minutes ago, Bitcoin broke below the $10,000 support. […]