We executed the following transaction(s):
- Japan
- Market Indicator
- Price Momentum Indicators
- Richard Russell
- Silver
- Speed Resistance Lines
- U.S. Dividend Watch List
Lockheed Martin 10-Year Targets
Below are the valuation targets for Lockheed Martin (LMT) for the next 10 years. Continue reading
Coppock Stock: April 2021
At the end of April 2021, two companies were a "buy" according to the Coppock Curve. So far, the strategy has worked well. Take a look at the chart below which consists of companies with "buy" signals on December 1, 2020. All companies outperformed the market by a significant margin.
For this week, please see the table below for the 2 companies with a "buy" signal as of May 1, 2021. Continue reading
U.S. Dividend Watch List: April 30, 2021
The market briefly reached all-time high on Thursday but retreated on Friday. While the sell off on Friday may look concerning, all sign point to continuation of bull market. Some concerning sign, if any, would be the failure for Nasdaq to participate and reach all-time high. Below is this week dividend watch list. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
Tagged members
Dogecoin: It’s Not Legit If It Doesn’t Crash -93%
Review
On February 5, 2018, we outlined the similarity in the level of increases between Bitcoin and Ethereum. At that time, we said the following:
“The periods in question happens to have the same percentage change, approximately +13,400%.”
We then surmised that if Ethereum could increase the same as Bitcoin then it wouldn’t be far fetched to consider the prospect of Ethereum declining to the same level of -93%, after such an increase. We said the following:
“As with the same percentage increase, it is reasonable to expect the same percentage decreased that followed. For the price of Bitcoin, it plunged –93.07% from June 8, 2011 to November 18, 2011.”
By January 10, 2019, we published an article titled “Ethereum: Stunning -93% Decline”. In that piece, we said:
“The difference between the high of $1,385.02 and $84.06 is equal to –93.93%. This decline was similar to the decline experienced by Bitcoin in 2011.”
DogeCoin Downside Targets
Below are the downside targets based on the work of Edson Gould.
The targets, based on the $0.41 peak, are:
-
$0.19 (conservative target)
-
$0.16 (mid-range target)
-
$0.14 (extreme target)
The -93% downside target for DogeCoin from the $0.41 level is $0.03. We have intentionally excluded the potential upside target of $1.41. Our emphasis is exclusively the downside risk.
Posted in DogeCoin, downside, Edson Gould, Speed Resistance Lines, SRL
U.S. Dividend Watch List: April 16, 2021
This bull market continues to defy gravity as the S&P 500 and DJI closed the week at their all-time high. Despite the strong up trend, there are great companies with strong dividend track records that lagged the market. Below is a list of companies on our watch list this week. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
Tagged members
AT&T 10-Year Targets
Below are the valuation targets for AT&T (T) for the next 10 years. Continue reading
TSX 60 Year-To-Date: April 5, 2021
Below is a chart of the performance of the Dogs of the TSX 60 from December 31, 2020 to April 5, 2021 (intraday).
The Toronto Stock Exchange has increased approximately +11.65% year to date. As a group, the Low yield category is crushing the high yield category. The top 5 and top 3 in the low price/book has exceeded the Toronto Stock Exchange by a wide margin.
In our January 3, 2021 posting, we said the following:
“…our personal bias is still with the Low Yield stocks however their performance isn’t as proven as the High P/B stocks..”
The top ten in the high price-to-book has exceeded the Toronto Stock Exchange by nearly double. At the time, we said:
“We’re looking to the High P/B stocks to lead the TSX on the way up and down. This means, if the market structure breaks down, the High P/B will lose more. Conversely, if the compressed value component is recognized in the TSX 60 for 2021, then the High P/B stock will be worth your while.”
We don’t understand the underperformance of the top 5, top 3, and 2,3,4 grouping for High price-to-book.
See Also:
Posted in Dogs of the TSX, High P/B
U.S. Dividend Watch List: April 2, 2021
We ended the week with S&P 500 crossing a major milestone of 4,000 which is also its all-time high. This market continue to push forward despite any minor correction along the way. One year ago, it wasn’t obvious that we would make all-time high or reach the 4,000 level. Our list from last year performed extremely well but so did the market. Below is a snapshot of various fundamental strategies compared to the broader market.
Best performer was buying low P/B companies which rose 137.3%. One thing to note that coming out of the bear market, companies with extreme valuation, one that under-perform, will out-perform on the way up. Take Invesco (IVZ) as an example, the stock reached the high of $38.40 in 2018 and reached the low of $6.70 in May 2020. That decline of 82% is drastic and the market was closing to pricing Invesco as if they would be out of business. The stock is currently at $25.75 which is 284% from the low but that is still far from the $38.40 level we saw in 2018. All this is to suggest that the risk and reward are high under that circumstances.
U.S. Dividend Watch List: April 2, 2021
As we mentioned before, the market continue to make its way higher. However, there are pocket of areas to watch out for. The Nasdaq has lagged the other indexes in making all-time high. For more detail on our analysis of the current market, review out NLO Market Indicator. Continue reading
Posted in Dividend Achiever Watch List, Dividend Achievers, Dividend Watch List
Tagged members
Cardinal Health 10-Year Targets
Below are the valuation targets for Cardinal Health (CAH) for the next 10 years. Continue reading
Posted in 10-year Targets, Altimeter, CAH
NLO Market Indicator–Dow Theory Indicator March 2021
It was a strong month for the market with S&P 500 gaining 1.8% while the Dow Jones Industrial topping 4.6%. However, we are seeing some weakness in the small cap area as the Russell 2000 was down about 2% for the month. It’s becoming more apparent now that a switch to value from growth is occurring as DJI have out performed RUT since early February. DJI rose 6% while the RUT lost 0.6%. One can revisit our assessment of Market Ratio here.
That being said, our NLO market indicator have not show any sign of weakness. Most major indexes made all-time high in March. That wasn’t the case for Nasdaq and Dow Jones Utility. Below is a view of where we are at the end of March. Continue reading
Coppock Stock: March 2021
Before we release 3 stocks that reached buy-signal based on the Coppock Curve, we want to visit 6 companies we highlighted at the end of November 2020.
As one can see, the performance for these 6 companies have been astonishing. The most interesting observation is that Capital One (COF) is the best performer with gain of 42%. However, historical pattern shows that it has the lowest success rate of 33% and tend to loss value over 1 year holding period.
At the end of March 2021, there are 3 companies reaching buy-signal from the Coppock Curve. All these companies are utilities which doesn’t surprise us given that the Dow Jones Utility index was a buy 2 months ago. Continue reading
ViacomCBS Downside Targets
Below are the downside targets for ViacomCBS (VIAC) based on the work of Edson Gould.
-
$48.33 (conservative target)
-
$40.89 (mid-range target)
-
$33.45 (extreme target)
Using the Speed Resistance Lines of Edson Gould is ideal since it is a relative scale for every stock no matter the price. Additionally, parabolic increases have been consistent in achieving the conservative target in the past (except in the case of Telsa).
Posted in Speed Resistance Lines, SRL, VIAC
Consumer Sentiment: March 2021
Review:
On June 11, 2020, we said the following of Consumer Sentiment:
“The rapidity of the stock market decline and recovery and failure to achieve new highs suggests that the Dow Jones Industrial Average, as a sentiment indicator, will retest the prior low (-15.47%) opening up for testing of past graveyard levels.”
Our assessment was wrong as we did not appreciate the fact that there have been few double dips in YoY data on the Dow Jones Industrial Average (only four since 1896).
Outlook:
Below is the data from 1986 to the present for the Consumer Sentiment Survey and the Dow Jones Industrial Average on a year over year basis.
While we have run up against what appears to be the limits of year-over-year gains for the Dow Jones Industrial Average since 1986, there has been eight other occurrence of above 50% y-o-y gains since 1896.
It is possible that the stock market could experience a similar decline of y-o-y increases, as seen from the 1997 peak, where the market moves higher but was unable to exceed the y-o-y gain top of 1997. This resulted in the DJIA going from 8,222 in 1997 to 11,497 in 2000. Likewise, the peak of y-o-y gains in 2010 saw the DJIA increase from 10,325 to 16,516 by 2016 or 21,917 by March 2020.
The University of Michigan Consumer Sentiment indicator has provided little in the way of indicating peaks in the market unless it was in positive year over year territory. Currently, we’re at a distinctly negative level in the Consumer Sentiment indication with only two other periods (2008 & 1991) registering worse levels.
Essentially, consumer sentiment could get worse but not by very much and not for too long of a period in time before a recovery will ensue. Our general view is that a recovery to positive levels in y-o-y changes in the Consumer sentiment level is necessary before the next protracted decline can materialize.
Posted in Consumer Sentiment, Dow Theory, YoY
Unemployment Rate: March 2021
Review:
On August 23, 2009, in our call that the recession was over, we said the following (when the unemployment rate was at 9.60%):
“I doubt that the general public will agree that the recession is over since jobs will not be as plentiful as the past.”
From the low in 2009 to 2014, many questioned the rising stock market and economy because job growth was not as strong as hoped. However, it should have been understood that to achieve such accelerated job growth comes at a very expensive price.
On July 2013, we said the following of the unemployment rate (when it was at 7.30%):
“It is important to understand that the 10% and 3.8% unemployment rates are undesirable scenarios. The 10% unemployment rate is in the depths of a ‘recession’ and the 3.8% unemployment rate at the height of a overextended economic boom.”
On August 24, 2018, we said the following of the unemployment rate (when it was at 3.80%):
“Presently, we anticipate the unemployment rate rising to the 6.30% level as a natural reaction to the current low levels. While the unemployment rate can go lower, there is a tremendous tradeoff to achieving lower levels. It is quite possible we have seen the best of times with a declining unemployment. Anything below the current levels will come at a tremendous cost in the next recession.”
On March 26, 2020, we said the following, when the unemployment rate was at 4.40%:
“According to the Washington Post dated March 23, 2020, the projected unemployment rate is likely to range from 9% to 30% based on the fallout from the coronavirus (COVID-19). Our August 2018 projection of 6.30% remains, as it is the first stopping point to any higher level beyond Goldman Sach’s 9% or St. Louis Federal Reserve President James Bullard’s 30%.”
The current level of the unemployment rate is 6.20%. All of the assessments on unemployment are based on the work of Charles H. Dow, co-founder of the Wall Street Journal and creator of the Dow Jones Indexes.
The Outlook
There are two probable scenarios to the current unemployment rate in the U.S., the first is a continuation of the rising trend from the 3.50% low established in January/February 2020 or a gradual decrease from the current level of 6.20%.
The continuation of the rising trend is generally assumed to be the course for unemployment. However, the history of unemployment data, whether accepted as accurate or not, is that it rises faster than it falls. After having risen to nearly 15% in the last year (an artificial advance according to Dow’s Theory), the prospects are that we should experience slight adjustments higher from the current level. However, the trend should be for a gradual decline to 4.90% unemployment rate before a re-assessment is necessary.
Posted in artificial advance, artificial depression