War and Peace: History Rhymes, But Which History?

It is said that history doesn’t repeat itself, but rhymes, but investors need to be careful about what history they study.
 

As I prepare for retirement at the end of March, I want to impress upon readers the importance of looking under the hood of past quantitative history studies in order to understand underlying assumptions.
Consider, for example, this timely study of U.S. equity returns after geopolitical and economic shocks. The accompanying table from Ryan Detrick of Carson Investment Research would lead to the conclusion that investors should ignore shocks and buy the dip, as the stock prices tend to shrug off short-term setbacks and rise over time.

A different table from Jeffrey Hirsch at Almanac Trader tells a slightly different story. Hirsch excluded some of the more minor shocks in his event study such as the Asian Financial Crisis and Brexit. Average and median returns are directionally similar inasmuch as stock prices tend to react to the initial shock and then rise afterwards, but the magnitude of the returns is dissimilar to the Detrick study. In addition, post-shock returns improve significantly if investors focus on the post Iran Hostage Crisis period. The worst of the initial short-term price shocks were attributed to World War II and the early days of the Cold War.

In short, how you choose your data sample will affect your return expectations.

The full post can be found here.

A Washout Bottom?

Mid-week market update: The S&P 500 ETF (SPY) traded out a possible reversal yesterday (Tuesday) when it opened down, fell, and recovered to close higher on the day. The move was accompanied by a positive divergence on the 5-day RSI and on above average volume. These are all signs of selling exhaustion and a capitulation bottom.

The full post can be found here.

A Cowardly Bull

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). As this site is shutting down on March 31, 2026, my inner trader is retiring so that there will be no tradings outstanding at the end of the quarter. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 to 16-Jan-2026 is shown below, and the chart will no longer be updated.

 

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “bearish” on 27-Jun-2025)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

 

Bullish, But…
My Trend Asset Allocation Model is bullish, so I am intermediate-term bullish. My Trend Model applies trend-following techniques to global stocks and commodity prices. The accompanying chart shows that the MSCI All-Country World Index (ACWI), ACWI ex- U.S., and commodity prices (all in USD) are in solid uptrends.

However, a number of cracks are appearing under the surface that are making me into a cowardly bull.

 

The full post can be found here. 

Making Sense of the Citrini Debate

Citrini Research recently published a controversial report that rhetorically asked, “What if our AI bullishness continues to be right...and what if that’s actually bearish?”

Even though the authors qualified the report as “a scenario, not a prediction”, it ignited much debate among investors. As the work is labeled as speculative fiction, I am not inclined to address its points, other than to point out that it raises questions about the interaction between AI-driven productivity and employment. 
 

In reaction, the market sold off after the report’s publication, but rebounded the next day. Software stocks, which had been under pressure over the disruptive fears of AI adoption, ended the week by stabilizing. Technology stocks broke a rising relative uptrend (dotted line) and they are testing a key relative support level.

The full post can be found here.

The NVIDIA Make or Break Moment

Mid-week market update: The major U.S. averages have been range bound for weeks. The only exception is the equal-weighted S&P 500, which has been in a steady uptrend but it has yet to break out through key resistance (dotted line). The market is coiling for a move.

 

 

As investors wait for the NVIDIA earnings report after the market close today, will that report be the make or break moment for market direction?

The full post can be found here.

A Market of Stocks, Not A Stock Market

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). As this site is shutting down on March 31, 2026, my inner trader is retiring so that there will be no tradings outstanding at the end of the quarter. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 to 16-Jan-2026 is shown below, and the chart will no longer be updated.

 

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “bearish” on 27-Jun-2025)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

 

 

The Hindenburg Stalemate
The market got another Hindenburg Omen again last week. As a reminder, the ominously sounding Hindenburg Omen signal is triggered whenever a bifurcated market in an uptrend loses price momentum. While some signals resolve in a benign manner, others have seen the market correct into major drawdowns.

The full post can be found here.

Could the "Lag 7" Crater the Economy and Market?

Now that the Magnificent Seven has definitively weakened and violated a key support level, the next question is whether the decline can be halted at the 200 dma. More ominously, the relative performance of these stocks is forming an inverted saucer top after violating a relative support level (bottom panel).

It’s time to consider and stress test what was once thought as unthinkable. Can a sustained breakdown of the Magnificent Seven and AI hyperscalers crash the market and the economy in the manner of the Dot-Com Bubble top?

The full post can be found here.

Drawing Lines in the Sand

Mid-week market update: While the equal-weighted S&P 500 has been in a well-defined uptrend, which in intermediate-term bullish, other major U.S. equity averages have been mired in trading ranges, which reveal a degree of uncertainty about short-term direction. In addition, the VVIX, or the volatility of the VIX, remains above the 100 level indicating continued uncertainty.

 

  

It's time to look under the hood and draw some lines in the sand for insights into short-term direction.

The full post can be found here.

What Comes After the Software Apocalypse?

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). As this site is shutting down on March 31, 2026, my inner trader is retiring so that there will be no tradings outstanding at the end of the quarter. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 to 16-Jan-2026 is shown below, and the chart will no longer be updated.

 

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “bearish” on 27-Jun-2025)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

 

 

A Software Apocalypse

The upward progress of the NASDAQ 100 has been hampered by the crash in software stocks, though semiconductors have held up well. Even though the index remains range bound, it violated a key relative support level (second panel) and relative breadth (bottom two panels) has been weak.

 
In light of the turmoil in software and technology stocks, it would be useful to conduct a market leadership review to see where we are in the market cycle.

The full post can be found here.

Twilight of the AI Bull

We should all have seen it coming. At the end of 2025, Time Magazine named its person of the year as “the architects of AI”. This was the classic example of the contrarian magazine cover indicator.

As well, U.S. investors who watched the Super Bowl also saw a flood of AI-related TV commercials. Welcome to the 2026 AI Super Bowl. Tech ad spend was double the level of the “Crypto Bowl” in 2022, and we know what happened to cryptocurrencies in that year.

Companies like Anthropic, Genspark, OpenAI, and Wix, none of which are cash flow positive, spent big money to purchase expensive media during the Super Bowl to convince viewers that their product was going to change their lives. Not to mention ad spends by established players like Amazon, Google and Meta. 

The flood of AI-related ads is reminiscent of the ad spend during the Super Bowl in 2000 at the top of the NASDAQ bubble. In 2000, 14 internet start-ups bought Super Bowl ads at $2.2 million per spot. Are you old enough to remember Pets.com? Yes, the company spent 1.2 million on Super Bowl media.

History doesn’t repeat itself, but rhymes.

The full post can be found here.

Vulnerable to a Setback

Mid-week market update: The delayed Jobs Report came in much higher than expectations this morning. The knee-jerk reaction in the pre-opening hours was risk-on, but the market reconsidered its view and pulled back after the open. 

 

Once again, the S&P 500 has failed to break out to the upside, though the equal-weighted S&P 500 achieved an all-time high, and non-U.S. stocks are in a well-defined uptrend. The VVIX, or the volatility of the VIX, remains above the key 100 level, indicating continued market anxiety.

 

 

I interpret these conditions as a high degree of vulnerability to a short-term setback.

The full post can be found here.

The S&P 500 Battle at the 50 dma

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). As this site is shutting down on March 31, 2026, my inner trader is retiring so that there will be no tradings outstanding at the end of the quarter. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 to 16-Jan-2026 is shown below, and the chart will no longer be updated.

 

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “bearish” on 27-Jun-2025)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent and on BlueSky at @humblestudent.bsky.social. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

 

Alpha Unwind or Beta Faceplant?

The S&P 500 briefly broke down below its 50 dma and bounced. It’s near the bottom of a trading range. It recycled after becoming oversold on the 5-day RSI, but the VVIX, or the volatility of the VIX, is above 100, indicating heightened anxiety.

I have two interpretations of the market narrative. Recent events such as the silver price crash and the software stock rout could be just indications of healthy internal in an ongoing bull, or these setbacks could be alpha unwinds that are leading to risk manager-induced liquidations that result in a beta faceplant for asset prices.

The full post can be found here.

From TACO to Big MAC

By now, investors should know about the TACO (Trump Always Chickens Out) trade where Trump reverses on one of his initiatives based on the market’s reaction. Former Fed economist Claudia Sahm recently introduced an additional political constraint on Trump’s actions. The Big MAC (Midterms Are Coming) factor has also forced some reversals.

 
I am introducing a Big MAC dashboard as a tool for investors to monitor possible changes in policy.

 

The full post can be found here.

The Dreaded Hindenburg Omen

Mid-week market update: In case you missed it, the dreaded Hindenburg Omen has reared its ugly head again. In plain English, the Hindenburg Omen is signaled when a market with bifurcated breadth sees a rollover in price momentum. Single day signals tend not to be very useful, but clusters of signals may foreshadow future drawdowns.

 

As the accompanying chart shows, past Omen signals have been hit-and-miss. The latest cluster saw three consecutive signals in the last three days. 

 

How should investors interpret the latest Omens?

The full post can be found here.

What Does Silver's Volatility Mean For the Markets?

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). As this site is shutting down on March 31, 2026, my inner trader is retiring so that there will be no tradings outstanding at the end of the quarter. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 to 16-Jan-2026 is shown below, and the chart will no longer be updated.

 

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “bearish” on 27-Jun-2025)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent and on BlueSky at @humblestudent.bsky.social. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

 

Parabolic Silver

How should investors interpret the parabolic rise in silver prices? The silver ETF has been rising on surging volume. Silver has also outperformed gold handily since mid-November as the silver/gold ratio has also went parabolic. However, Friday’s island reversal pattern is silver (and gold) is concerning for precious metal bulls.

 
The key question for investors is, “What does this mean for asset returns from an inter-market analytical perspective?”

The full post can be found here.

Mag 7, or Lag 7?

I have been an advocate of holding a barbell position of U.S. large-cap growth and EAFE value stocks in equity allocations. More recently, the EAFE value portion has outperformed while the U.S. large-cap growth component has lagged. As a consequence, I am increasingly seeing questions of whether it’s time to rethink the allocation to U.S. large-cap growth stocks.

As the underperformance of U.S. growth is mainly attributable to weakness in the Magnificent Seven names. The question becomes: Has the Mag 7 become the Lag 7?

The full post can be found here.

Did Trump Jinx S&P 7000?

Mid-week market update: The S&P 500 achieved a fresh all-time high yesterday (Tuesday) and it touched 7000 today before retreating. President Trump posted about the event, did he jinx the market?

 

Probably not. The Fed presented the market with a number of potential surprises. In the end, the Fed decision and the subsequent press conference turned out to be a big yawn. We could have seen political fireworks surrounding the investigation, or the question of whether Powell will remain on the Board after the expiry of his chairmanship, but we didn't. Nor did we see Trump upstage the FOMC by announcing the selection of a new Fed Chair.

The full post can be found here.

A Welcome Sentiment Reset

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). As this site is shutting down on March 31, 2026, my inner trader is retiring so that there will be no tradings outstanding at the end of the quarter. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 to 16-Jan-2026 is shown below, and the chart will no longer be updated.

 

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “bearish” on 27-Jun-2025)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent and on BlueSky at @humblestudent.bsky.social. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

What Positioning Rinse?

Coming into last weekend when news of Trump’s Greenland annexation demands hit the tape, it appeared that the stock market was poised for a positioning rinse. The BoA Global Manager Survey found that respondents’ cash levels had reached an all-time low, and very few managers had taken out tail-risk hedges. Investors were all bulled up, and the Greenland news was a potential catalyst to spark a correction.

The full post can be found here.

How to Position for the Greenland and Other 2026 TACOs

When the markets became rattled by the prospect of a Trump threat to annex Greenland over the weekend, I knew that a TACO (Trump Always Chickens Out) walk back was inevitable. I observed in the past that the markets would eventually discipline Trump’s unusual excesses. Indeed, the combination of a spiking 10-year Treasury yield and surging volatility indices pressured the White House to find a face-saving off-ramp.

In addition, I believe the Greenland Gambit along with the Venezuelan Adventure are part of a pattern of foreign policy moves as domestic policy safety valves leading up to the mid-term election. Investors should view possible U.S. foreign policy initiative between today and November within an electoral framework and react accordingly.

The full post can be found here.

Greenland Follows the Powell Playbook

Mid-week market update: Investors have seen this movie before in the recent past. A market moving event breaks over the weekend. The market freaks out at the open. The market calms soon after and life goes on.

 

The last time this happened, the news was an investigation of Fed Chair Powell. This time, it's the possible annexation of Greenland. Even though the S&P 500 remains in a trading range, but the equal-weighted S&P 500, the Russell 2000, and the MSCI All-Country World Ex-US Index have regained most if not all of their losses from the fright over Greenland.

 

 

 The full post can be found here.

Embrace the Market's Animal Spirits

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below. 

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “bearish” on 27-Jun-2025)*
• Trading model: Neutral (Last changed from “bullish” on 26-Nov-2025)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent and on BlueSky at @humblestudent.bsky.social. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

Relentless Momentum

The price momentum that I highlighted last week has been relentless. Even as the S&P 500 tests resistance at its all-time high, the equal-weighted S&P 500, the small-cap Russell 2000 and the MSCI All-Country World Index Ex-U.S. all surged to fresh highs.

  

There is nothing more bullish than a new high.
 

The full post can be found here.

A Time to Reap

I know that I have been negative on many Trump policies in these pages, but to everything there is a season. For U.S. equity investors, early 2026 is a time to reap the benefits of Trump’s 2025 policies. Last year was tumultuous for policy, but policy uncertainty is fading, and the stimulative and pro-cyclical elements of the OBBB Act are becoming evident in early 2026. In addition, the Economic Surprise Index, which measures whether economic releases are beating or missing consensus expectations, has been steadily positive since mid-2025.

 
This macro backdrop forms the basis of a bullish environment for growth expectations and bullish tailwinds for risk assets in early 2026.

The full post can be found here.

Remarkable Bullish Resilience

Mid-week market update: The S&P 500 is pulling back to test its rising trend line and the VVIX, or the volatility of the VIX Index, spikes above the key 100 level, which indicates rising market anxiety. However, an analysis of market internals reveal a remarkable level of bullish resilience in the face of recent unsettling headlines over Jerome Powell, Greenland, Iran, and Venezuela.

 

 

The full post can be found here.

A Momentum-Driven Start to 2026

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below. 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “bearish” on 27-Jun-2025)*
• Trading model: Neutral (Last changed from “bullish” on 26-Nov-2025)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent and on BlueSky at @humblestudent.bsky.social. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

A Dow Theory Buy Signal

It is said that there is nothing more bullish than a fresh high. The U.S. stock market achieved the rare feat of printing all-time highs in both the Dow Jones Industrials and Transportation Averages at the same time. In case you didn’t fully understand the implications, that’s a Dow Theory buy signal.

The full post can be found here.

Regime Change Adventures: Bush, Obama, and now Trump

Emerging market shocks follow a familiar pattern in quantitative investing. When the event occurs, quantitative factor responses in stock selection get thrown out the window. As the smoke clears, top-down strategists map out the direction and magnitude of the shock, and technical analysis factors like price momentum and reversals start to work. As the magnitude of the shock becomes known, company analysts revise their earnings estimates, and estimate revision and earnings surprise factors begin to work. Finally, as the investment environment stabilizes, conventional value and growth factors gain traction.
 

The same thing is happening when U.S. forces seized Venezuelan President Maduro and his wife in a weekend raid. The smoke is starting to clear, both metaphorically and literally, and invest0ors can see the direction of the shock.
 

The raid made some sense from a Trumpian geopolitical viewpoint. Bloomberg opinion columnist Javier Blas characterized the move as Trump building his own Oil Empire. The Donroe Doctrine countries in the Western hemisphere, the U.S., Canada, Venezuela and the rest of the Americas, control roughly 40% of global oil production and this allows the White House much greater control over oil prices and production to avoid energy shocks in the future.

It all sounds good in theory. But as the recent history during the 21st Century shows, this is the third time the U.S. has attempted regime change in oil-producing countries. Bush tried it in Iraq, Obama tried it in Libya and now Trump is trying it in Venezuela. None worked out according to their pre-war textbooks. Here’s what this latest geopolitical adventure means for investors.

The full post can be found here.

Did the Santa Rally Actually Fail?

Mid-week market update: The S&P 500 ended the seasonally positive Santa Claus rally window down -0.1% this year. According to Wall Street lore, this foreshadows a weak year for stock prices.

 

 

But did investors really miss Santa Claus this year? The Dow, the equal-weighted S&P 500, the NYSE Composite were all positive during the SCR window. Moreover, the S&P 500 made an all-time high the day after the window closed.

 

The full post can be found here.

What Santa Rally?

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

  

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below. 

 
 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “bearish” on 27-Jun-2025)*
• Trading model: Neutral (Last changed from “bullish” on 26-Nov-2025)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent and on BlueSky at @humblestudent.bsky.social. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

If Santa Should Fail to Call…

The seasaonlly positive Santa Claus rally spans the last five days of the year and the first two days of the new year, and the window opened on December 25. So far, the S&P 500 is trading slightly below the closing price on  December 23. 

 
The Wall Street adage was first coined by Yale Hirch, “If Santa should fail  to call, bears may come to Broad and Wall”. Can the market rally on Monday, the last day of the Santa rally window, to rescue the bullish narrative?

While the historical record of failed Santa rallies is sobering, it’s difficult to believe that a few days at the turn of the year can have a significant price momentum effect for the rest of the year.

The full post can be found here.

Opportunities and Challenges of 2026

The accompanying chart from Jeffrey Hirsch of Almanac Trader shows the expected seasonal price pattern for the S&P 500. As with any seasonality analysis, direction is more important than the magnitude of the move. If history is any guide, expect a volatile year until October, followed by a rally into year-end.
I agree with the broad strokes of the seasonality analysis, and the pattern forms the base case of my S&P 500 market expectations for 2026.

But I still have questions for the market, and here are the opportunities and challenges for investors in the new year.

The full post can be found here.