Callum_Thomas
Callum_Thomas
Head of Research, Founder: @topdowncharts Global Macro & Asset Allocation Research
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Daily Charts - The differences in bull markets vs bear markets

1.You've probably seen the classic stockmarket seasonality charts before...but did you know seasonality works different in bull markets vs bear markets? $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2412(ESmain)$ Image2.The best time to own bonds is into and during a recession... which is also the worst time to own stocks.(i.e. what is diversification?)Image3.Best buying?When the market is cheap, interest rates are low and falling, economic data is so bad it's good (and then turns up), sentiment is extreme bearish (and bounces), positioning is washed out, technicals are oversold (and then break out vs resistance)Image
Daily Charts - The differences in bull markets vs bear markets
avatarCallum_Thomas
11-20 08:43

Daily Charts - Long-term holding reduces loss risk

1.Glass half-full = if you hold your stocks for long enough your chances of avoiding losses goes up! 😀 Glass half-empty = even if you hold for at least 10-years there's still a chance you might end up down on your initial investment! 😵‍💫 Of course timing, diversification, and risk management matter tremendously in the calculus here... $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2412(ESmain)$ Image2.Tremendous relative value in Energy StocksMakes them a very interesting "alternative hedge" Image𝗨𝘀𝗶𝗻𝗴 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻 𝗦𝗶𝗴𝗻𝗮𝗹𝘀 𝘁𝗼 𝗡𝗮𝘃𝗶𝗴𝗮𝘁𝗲 𝗠𝗮𝗿𝗸𝗲𝘁 𝗖𝘆𝗰𝗹𝗲𝘀Learn how to understand cycles across time and markets, the purpose and nature of valuatio
Daily Charts - Long-term holding reduces loss risk
avatarCallum_Thomas
11-19 07:12

Daily Charts - Stocks go up in the long-run

1.Stocks go up in the long-run, you've seen the chart with the near-straight up to the right sloping line...BUT: there are cycles and entry-point matters a lot. This chart shows how even longer-term returns (10yr annualized real total returns) can swing wildly from very good to pretty bad $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ Image2.Absolute Valuations help determine future absolute returns... AND Relative Valuations help determine future *relative* returns: Image3.Best Stocks of all-time?=those who stuck around long-enoughmost companies were 70-90yrs+ old>> big win for "time in the market"(obviously some survivorship/selection stuff going on here, but interesting nonetheless)From the paper
Daily Charts - Stocks go up in the long-run

Daily Charts - ETF investors are just not interested in Gold

1.ETF investors are just not interested in Gold $Gold - main 2412(GCmain)$ Implied allocations to both gold ETFs and gold miner ETFs are still tracking around the lows...Image2.Predictable Cycle set to Turn?Or different this time... Long-term perspectives on stocks: $.SPX(.SPX)$ $.IXIC(.IXIC)$ $.DJI(.DJI)$ Image3.European stocks used to walk a very similar path to US, but that all changed after the financial crisis (and years of sovereign debt mess)You might call the left chart the honeymoon period for the European Union!Image4.Emerging Markets ex-ChinaA big Breakout: Image
Daily Charts - ETF investors are just not interested in Gold

Daily Charts - The top-10 stocks don't usually win

1.The top-10 stocks don't usually win...History tells a story of the top-10 stocks under-performing vs the equal-weighted (490) stock index... with brief but often spectacular interludes $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2412(ESmain)$ Image2.Gold $Gold - main 2412(GCmain)$ -- is it over just as quick as it started?Reminder on what's behind the Brobdingnagian breakout: Image3.Crude Oil $Micro WTI Crude Oil - main 2412(MCLmain)$ on the Cusp of CapitulationImage
Daily Charts - The top-10 stocks don't usually win

Weekly Macro Themes - Bullish China A-shares on cheap valuations

This week I covered the following topics/ideas:1. US Dollar: After a sharp rally, the DXY is now overbought, facing a major overhead resistance zone, consensus bullishness, fading seasonal tailwinds, expensive valuations, and monetary/fiscal headwinds. 2. China: Bullish China A-shares on cheap valuations, improved technicals, stepped up stimulus and fading tail risks (initial rebound in property prices), and excess pessimism (global/US).3. Commodities: Remain bullish commodities on cheap valuations, supply tailwinds, sentiment/positioning signals, multiple bullish technical indicators, and the prospect of global growth reacceleration.4. Oil & Energy Stocks: Continue to see upside risk for crude oil given sentiment/technicals and robust demand, but arguably geopolitical tail risk has re
Weekly Macro Themes - Bullish China A-shares on cheap valuations

Daily Charts - Country/Region Returns

1.Country/Region Returns(n.b. color coding is the ranking within year, so the best country within the year might be negative e.g. compare and contrast 2008 vs 2009)Goes to show the sometimes massive opportunities (and risks!) in country/region allocations:Image2.Longer life spans and one heck of a bull markets have seen the over 70yrs cohort compound their way to the largest share of equity holdings by ageMeanwhile the 40-54yr group is in the sour spot (I have some guesses as to why... being a member of that group myself!)Image
Daily Charts - Country/Region Returns

Daily Charts - Some sectors win big

1.Some sectors win bigSome sectors win many timesBut no sector or style stays on top forever, it's a merry-go-round seesaw of a ride, and one with many opportunities for sector allocation strategies: $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ Image2.How to win in markets?Value Investor at ExtremesMomentum Investor through the RangeImage3.US investors allocate 3x as much to stocks as Europeans... do you think this impacts the culture, thinking, and regulations around capital markets and the economy?Image
Daily Charts - Some sectors win big

Daily Charts - Tech stock valuations are priced for perfection+

1.Not-dot-com... something else!Tech stock valuations are priced for perfection+ What's similar vs different to the dot com bubble, and key points for investorsImage2.Stock Splits boost returns(or is it just that stocks that go up are more likely to split... 🧐 ) $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $.DJI(.DJI)$ $GLOBAL X DOW 30® COVERED CALL ETF(DJIA)$ Image3.Gold $Gold - main 2412(GCmain)$ is overvaluedImage4.Emerging Markets *ex-China* are set t
Daily Charts - Tech stock valuations are priced for perfection+

Daily Charts- Large cap equity valuation is way higher than it was in 2016

1.For those who make bullish comparisons with President Trump's 2016 victory, there is one key difference. Large cap equity valuation is way higher than it was in 2016 and bond yields were around 2%. Maybe small caps are the best Trump-trade this time around. $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ 100(NDX)$ $ProShares UltraPro QQQ(TQQQ)$ $.DJI(.DJI)$ $GLOBAL X DOW 30® COVERED CALL ETF(DJIA)$ Image2.Today's stock indexes feature elaborate sector/industry breakdowns to group and classify stocks... and ultimately determine fl
Daily Charts- Large cap equity valuation is way higher than it was in 2016

Daily Charts - Sentiment for US equities won't be wrong

1.Sentiment -- surely the crowd won't be wrong Sentiment for US equities reaches a phenomenal level of +53 percentage points, marking a new all-time high (data history since 2001)! The optimism is focussed very strongly on the US markets. sentix Sentiment US equities and S&P 500Surely stocks will still head higher even though valuations are double that what we saw in 2016, and sentiment metrics are at record highs vs outright bearish in early 2016 🤔2.The rise of Intangibles...The stockmarket used to be backed by hard, real, tangible assets. But then the information age happened.Does make you wonder if some day this trend will change, perhaps in the coming commercial space age boom?Image3.The perfect indicator:-works for good reason-works as it should-works over timeWorked example: Imag
Daily Charts - Sentiment for US equities won't be wrong

Daily Charts - Confidence vs Hype

1.Confidence vs Hype: $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $.DJI(.DJI)$ There’s confidence, and then there is just straight-up hype. History doesn’t repeat, but it often rhymes, and there sure is a rhythm in this chart!Image2.Remember "meme stocks" ?What a dumb and weird episode in markets that was 😵‍💫 -- maybe at least it got some younger folk interested in investing, and hopefully they eventually learned some sounder principles....Image3.When it comes to investing, focusing on the long-term and just keep on investing more is typicall
Daily Charts - Confidence vs Hype

Daily Charts - In the long-run earnings growth is structural

1.In the long-run earnings growth is structural, and follows the typical uptrend we're used to seeing...In the short-run, earnings are cyclical, and follow the economic/monetary cycle(s)Long-term perspectives on the market: $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2412(ESmain)$ Image2.Credit Spreads are tracking round 17-year lows(!)Here's why + how to navigate the credit market cycle: Image3.Short & sharp corrections are fairly common outside of recessions......but when recession hits you can get large and drawn-out draw-downs.Image4.New Year's resolutions hack = start nowSeriously, think of your 2025 resolutions, start th
Daily Charts - In the long-run earnings growth is structural

Daily Charts - Fed cuts a further -25bps to 4.75%

1.Fed cuts a further -25bps to 4.75%Imagep.s. if this turns out to be it for the Fed (i.e. a Short Cut cycle, followed by a return to hikes) -- both stocks and bonds are basically on-trackShort-Cutting cycles tend to see bond yields head higher and stocks trend up:ImageMeanwhile Brazil continued it's un-pivot -- back into rate hikes after a short-lived cutting cycleImage2.Looking at the breakdown of Expected Returns for Global Equities we can see how US stocks face a very high valuation hurdle to overcomeMeanwhile the rest of the world has a slight valuation edge and tailwindImage3.US investors have a massive home-bias when it comes to their stock portfolios... and some might say justifiably so.But it turns out there are a lot of countries with an even bigger home-bias (albeit kind of inte
Daily Charts - Fed cuts a further -25bps to 4.75%

Daily Charts - Stocks vs Bonds

1.Stocks vs BondsSstocks beat bonds most of the timeBut bonds beat stocks almost all of the time when stocks went down (with a couple of notable, somewhat predictable exceptions!)Asset allocation perspectives: $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2412(ESmain)$ $.IXIC(.IXIC)$ $NASDAQ 100(NDX)$ $Invesco QQQ(QQQ)$ $E-mini Nasdaq 100 - main 2412(NQmain)$ $.DJI(.DJI)$ $GLOBAL
Daily Charts - Stocks vs Bonds

Daily Charts - Higher For Longer risk

1.Higher For Longer riskThe long-term rate of inflation model is unlikely to come down any time soon (outside of a deflationary recession), which means high bond yields may be here to stay (new higher range)Image2.I mean, there are exceptions to the rule, but it kind of makes sense right?yeah probably some selection bias going on... only founders who are able to transition to CEO will make it to and through IPO I would guessCould be some survivorship bias too. Company thriving, founder stays in place. Company not doing so well, founder gets replaced.Image3.Demographics = Destiny?...if so, maybe we need to take a closer look at Frontier Market equities!Image
Daily Charts - Higher For Longer risk

Daily Charts - Small Caps set to turn the corner?

1.Small Caps set to turn the corner? $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2412(ESmain)$ Image2.Just buy low and sell high...(but what about the rest of the time??)Here's how value investing *really* works: Image3.Academic finance has its fair share of critics, and sometimes justifiably so, but I think this chart is a perfect case study of the academicians getting it right at least once.They say market anomalies will eventually get arbitraged away, and it sure looks like that's exactly what's happened to the "index effect"stocks used to get a big boost from being added to the index, and suffer large declines when getting boo
Daily Charts - Small Caps set to turn the corner?

Daily Charts - Small Caps vs Large Caps

1.Small Caps vs Large Caps -clear long-term Trend-with major cycles and swings--just about due for a turnaround?Image2.Miss the best days = sadMiss the worst days = gladMiss them both?Not bad... $.SPX(.SPX)$ $SPDR S&P 500 ETF Trust(SPY)$ $E-mini S&P 500 - main 2412(ESmain)$ Image3.Year-end Rally?...really?Seasonality says so, but here's the thing with seasonality... ImageOn the radar-more PMI data-sloos?-RBA,BoE,FOMC-China CPIMarkets: 10yr yield pushing higher, DXY pulling back from resistance, gold profit taking off the highs, WTI crude still holding support, stocks slipping on de-risking...
Daily Charts - Small Caps vs Large Caps

YTD still mostly positive, US large caps still on top, bonds at the bottom

Asset Class Returns in Oct 2024-all tricks and no treats with a late-Oct selloff-broke the multi-month streak of near-universal gains with near-universal losses in Oct-cash king (and USD + gold up)YTD still mostly positive, US large caps still on top, bonds at the bottomImageScreenshot 2024-11-03 073123.pngPS: The charts and tables below present market performance data for the assets we calculated capital market assumptions for.  Every effort has been made to ensure the analysis is accurate and correct, however we assume no liability for any errors or omissions or any representations made by users of this information.  Use at your own risk, and to all purposes your own responsibility. 
YTD still mostly positive, US large caps still on top, bonds at the bottom

Daily Charts - Sometimes the Technology wins, but investors lose

1.Sometimes the Technology wins, but investors lose...Key case study here -- railway stocks showed a ton of promise and helped investors build a lot of wealth in the first half of the 1800's, but it was pretty much a one-way track (sorry) thereafter!Image2.Big Bulls Stockmarket "Euphoriameter" reached a new all-time high!Image3.Where do stockmarket returns come from?If you split the components or drivers of total returns into dividends vs earnings vs valuations, it's quickly clear to see where structural vs cyclical returns come from...Image
Daily Charts - Sometimes the Technology wins, but investors lose

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