By: Cooper Family Office | July 21, 2019

July 11, 2019   

It is a well-known fact that late in a business cycle, one may start to see important divergences between different sectors of the stock market.  More specifically, it is not unusual to see the Transport sector start to underperform the broader market in anticipation of a slowing overall economy.   

So it is that we must point out the recent breakdown of the IYT (iShares Transportation Index ETF) versus the broader SPY (SPDR S&P 500 ETF).  The Ratio of IYT/ SPY chart shown below has arguably made a huge “Head & Shoulders” topping formation on a monthly basis going back to Q4 2014, and recently broke the neckline of that formation.

By: Cooper Family Office | April 16, 2019

For the umpteenth time in the 10-year old bull market from 2009, the S&P opened higher on a gap this morning, and then promptly traded broadly sideways for the balance of the day.

 

Understanding this rhythm may be key to understanding when the current bull market may end. 

 

You see, as detailed in a New York Times February 2018 article “The Stock Market Works by Day, But It Loves the Night” (which in turn cited research by the Bespoke Investment Group), if one measures all of the net overnight advances in the S&P 500, these gains account for more than 100% of the market’s total gains since 1993.

By: Cooper Family Office | April 05, 2019


The SOX Semiconductor Index is touching new highs today, while industry experts continue to point to an actual glut of semiconductor chips. Samsung missed earnings yesterday citing poor chip pricing and slowing demand. There is a true disconnect here somewhere. Since the SOX is also touching an extrapolated Fibonacci band, we’d expect market price enthusiasm for the SOX is the one misplaced.