Updates & Commentary

Weekly Updates on the KP Models

The More Things Change . . .

Posted by on Sunday, Feb 18, 2018

The More Things Change . . .

Trend Model.  Our Intermediate-Term trend model — with over 12 years’ real-time experience — remained narrowly positive over the last two weeks. Close call. At the same time, the Long-Term model component which gets an equal vote in our process, remained near its highs, leaving the combined KP Trend Model green throughout this violent correction, as well as the equally-violent rebound. Comment.  Thanks to technology and competition, the internal structure of the financial markets changes continuously. The playing field for instant information transfer has become exceptionally level...

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Momentum Shaken

Posted by on Sunday, Feb 11, 2018

Momentum Shaken

The Models: The KP Trend Model is positive, though the Intermediate -Term component has sharply pulled back to its trigger line. At weeks end, the Model remains GREEN. Comments: The 10% hit to the major indices from their January 26th highs, was sudden, sharp and non-discriminatory. After such an incredible bull market advance, especially remarkable since the Presidential election, a healthy pull-back, or correction has been anticipated, a normal respite. But the nature of this decline, the extreme volatility, wide daily price swings, and heavy volume this past week approached the...

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From Overbought to Oversold

Posted by on Sunday, Feb 4, 2018

From Overbought to Oversold

The Model.  Last week’s shakeout didn’t impact the two components of our trend analysis work very much.  The status remains unchanged: maximum policy commitment to equities. Comment.  Every week we include a handful of charts on this site that provide additional context of the technical situation, but don’t really impact the (rather slow-moving) trend analysis engine.  These charts look at short-term extremes and evaluate the likelihood of mean-reverting counter-moves. Well, we’ve reached one of those times when these studies deserve a little extra attention. Here...

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Powerful Advance Continues

Posted by on Sunday, Jan 28, 2018

Powerful Advance Continues

The Models: Both components of the KP Trend Model remain GREEN and continue to accelerate, remaining 100% long and positive. Comments: The parabolic tendencies of the market advance that got under way in earnest with the Presidential election in November 2016, continued this week to live out the definition of a parabola, quickening its angular ascent to all-time highs, yet again. With powerful, underlying momentum seemingly built in, there are no obvious dark spots immediately ahead to suggest impending weakness. This despite several short-term oscillator studies climbing into overbought...

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Relentless Advance Amid Skepticism

Posted by on Sunday, Jan 21, 2018

Relentless Advance Amid Skepticism

The Models. Both elements of our trend analysis process remains solidly positive, reflecting the near-vertical rise in US equity prices since the beginning of the year. Comment.  The US equity market continues to follow the parabolic or “melt-up” script, with prices advancing relentlessly so far in 2018. As we review the internal market data, we note a surprising degree of internal balance in this market, despite the advance.  This, we believe, reflects an impressive amount of skeptical liquidation as price are advancing. This is particularly true for the universally-owned NASDAQ...

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Hard to Stop a Train

Posted by on Monday, Jan 15, 2018

Hard to Stop a Train

The Models: The KP Trend Model is solidly GREEN, with both components accelerating into the New Year. Comments: The markets charged into 2018 with even greater enthusiasm than was exhibited on the way out of 2017, continuing the momentum that prevailed throughout the past year. The Nasdaq 100 Index (NDX) (large cap, more speculative issues), and the PHLX/KBW Bank Index (financials), are leading the advance, gaining 5.7% and 6.0% respectively, thus far. Small and Midcaps are just behind. A recent look back into the archives was telling. The most recent ‘extreme’ oversold condition in the...

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