Investing

On October 7, 2011, I wrote a blog post describing a bullish divergence forming in the Financial Sector SPDR. I used the Relative Strength Indicator to measure momentum and the price of the XLF to show that although the XLF made a new price low, the indicator did not confirm the drop. I could have used other indicators and equity [...]

We have been patiently waiting for markets to correct and give us a chance to purchase positions that edge our portfolios closer to a neutral stance. But so far this year, the volatility tap has been shut as we continue to watch a slow drift up in the markets. This has tested our patience as we wait for a catalyst [...]

The duration of a bond portfolio tells you how much the price of your bonds will change for each percentage change in interest rates. A high duration means more sensitivity or price volatility as interest rates change. Duration tells you virtually everything you want to know about the price sensitivity of U.S. government bonds, which are presumed to be risk-free [...]

Da Bulls The bulls believe that a global reflationary cycle is underway, and will likely drive the markets up towards the 2007 highs. The most bullish believe the U.S. economy will de-couple from Europe’s woes and will continue accelerating, Chinese growth will pick up on easier policy, and even Europe is past the worst of its mild recession. For investors [...]

Bearish investors look at the chart below and immediately notice that Fed intervention in the form of QE1 and QE2 (quantitative easing program 1 and 2, or perhaps more accurately, money printing programs 1 and 2) occurred after substantial market declines. QE1 is announced after the Lehman Brothers collapse in 2008 and QE2 is hinted at when Bernanke addressed the [...]