An Update on Gold: Time for a Pause?

I have been bullish on gold for several months (see 2025 High Conviction Idea: Gold). Since that report was published, gold prices have risen over 25% in USD. More recently, it violated its rising trend line in all major currencies except the Japanese yen, which may be a technical warning of a tiring bull. Is it time to take profits in the gold bull trade?

 

The full post can be found here.

 

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.  

Tariff Man Returns

Mid-week market update: Investors have seen this movie before, which I described as a Trump collar. As the accompanying chart of the trade war factor, Trump shown a pain point at which the market anxiety, as measured by the VIX and MOVE Index, rises enough that he moderates his course on tariff belligerence. As market anxiety cools down, and he makes some gains to score political capital, the Tariff Man emerges and he asserts his "Art of the Deal" persona. In the wake of the trade deal with Vietnam and the passage of the tax bill, we are back in the Tariff Man zone.

 

 

In effect, he is financing the Trump TACO Put with the sale of a Trump Tariff Man Call option on risk assets. It's therefore not a surprise that the market is pausing its gains this week.

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.      

Should You Embrace the Melt-up?

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 14-Apr-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.

 

The Return of Irrational Exuberance 

I pointed out last week that animal spirits were returning to the market. Perhaps too much. A recent Bloomberg article, “‘Irrational Exuberance’ Stock Gauge Sparks Fresh Bubble Worries”, tells the story of extremely greedy sentiment creeping into the markets. The Barclays Equity Euphoria Indicator has reached dangerous levels of froth: 

The bank noted that the measure, which is calculated from derivatives metrics, volatility technicals and sentiment signals inferred from options markets, has historically averaged around 7%, but occasionally it peaks above 10% as during the Dotcom era of the late 1990s, and the meme-stock frenzy of 2021. The gauge currently sits around 10.7%, data compiled by Barclays show.
 

Market conditions are becoming bubbly and melting up. 

At the moment, the S&P 500 is a little extended while grinding out new highs and it’s on an upper Bollinger Band ride. Should traders embrace or fade the melt-up?

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.     

Can a New Bull Begin at a Forward P/E of 22?

It’s official, my long-term market timing model has confirmed a buy signal at the end of June. It first flashed a sell signal in late January when the 14-month RSI of the NYSE Composite exhibited a negative divergence when the market made a new high, but RSI didn’t. Now it flashed a buy signal at the end of June when MACD recycled from negative to positive (bottom panel), though you have to squint to see when it went negative in May.

This model has shown a strong track record over the years. If you had sold in late January and bought back in when the S&P 500 made a new high last week, you would have missed the tariff drama drawdowns of the last few months.

 
In my discussions with investors, one key question keeps coming up. The S&P 500 is trading at a forward P/E of 22. Can a new bull truly begin at such elevated valuations?

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.    

 

Broadening Breadth?

Mid-week market update: I suggested on the weekend that the animal spirits were back. Indeed, the market may be undergoing a broadening in breadth and leadership. NASDAQ 100 stocks are coming off the boil, and med- and small-cap stocks are showing signs of life. That's a welcome short-term sign that this rally may have more room to run.

 

The full post can be found here.

 

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.    

 

The Animal Spirits are Back in Charge!

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: Neutral (Last changed from “bearish” on 16-May-2025)*
• Trading model: Neutral (Last changed from “bullish” on 14-Apr-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 Speculative Breakout

It is said that there is nothing more bullish than a new high, but how should investors interpret the latest round of upside breakouts?

The S&P 500 made a fresh high Friday. Even before Friday’s upside breakout, the high-octane and speculative parts of the stock market have already staged upside breakouts to all-time highs. The NASDAQ 100 and the ARK Innovation ETF (ARKK), which represents speculative growth stocks, have already broken out. By contrast, the equal-weighted S&P 500, which measures the average stock in the index, is well below its highs.

The animal spirits are back and the market is becoming frothy.
 

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.      

The Surprise Victor of the Israel-Iran War

So far, the Middle East truce is holding and oil prices have begun to normalize. An Economist article featured analysis from the Ceasefire Group that studied ceasefires between 1989 and 2020 and found about half were successful, one-third collapsed and the outcome of the remainder were inconclusive. Of Middle East ceasefires, about half failed.

 

I assess the current situation in the Israel-Iran conflict and its implications for investors.
 

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.       

A Forthy Breakout

Mid-week market update: One of the bullish tripwires I outlined on the weekend has triggered (see Buy the Cannons: Exploring the Bull Case). The small cap Russell 2000 ETF staged an upside breakout through the neckline of an inverse head and shoulders pattern, with a measured upside objective of ~250, which represents a potential upside of roughly 18%.

 

 

The breakout was accompanied by a frothy revival of the market's animal spirits. 

 

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.      

Buy the Cannons: Exploring the Bull Case

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: Neutral (Last changed from “bearish” on 16-May-2025)*
• Trading model: Neutral (Last changed from “bullish” on 14-Apr-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.

 

The Minority Report

As we write these words, the U.S. has chosen to enter the war against Iran. The extremely thin contract-for-difference trading for the Dow is down about -1%. Is this a time to embrace the contrarian adage of “buy on the cannons, sell on the trumpets”? 

I have been fairly cautious about the U.S. equity market, but like all good investors, I would like to consider the bull case. While my base case still calls for a trading range for the S&P 500 for the remainder of the year, and the index is still flashing a negative RSI divergence warning, I am open to the possibility that stock prices could break out to all-time highs. I estimate the odds of that bullish as one-in-three or four.

 
Here are my reasons to be bullish.

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.     

Forecasting Fed Policy: Hints From Hard Data

As expected, the Federal Reserve left interest rates unchanged. The Fed Chair acknowledged a high degree of uncertainty about the effects of tariffs: “Ultimately the cost of the tariff has to be paid, and some of it will fall on the end consumer. We know that’s coming, and we just want to see a little bit of that before we make judgments prematurely.”

The “dot plot” took a surprising hawkish turn. Seven FOMC members expect no rate cuts in 2025, compared to four in March, and two expect a single quarter-point cut, compared to four in June. But the hawkish pivot occurred against a backdrop of uncertainty as Powell admitted that the projected policy path is only a guess. The Fed’s forecast of inflation and growth has become clouded in the face of the unknown effects of tariffs: “We haven’t been through a situation like this, and I think we have to be humble about our ability to forecast it.”

It is not surprising that Fed policy makers have adopted a wait-and-see attitude as they watch for clues from the hard economic data.

 

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.    

 

The Three Most Important Words in Investing

Mid-week market update: As expected, the Fed stayed on hold today and took a wait-and-see attitude on the timing of rate cuts. While economic data has softened recently, as evidenced by the decline in the U.S. Economic Surprise Index, the Fed is still waiting for clarity on the effects of tariffs on inflation to make monetary policy decision. Even the dot plot represents nothing more than guesses that are subject to change.

 

In other words, the Fed has uttered the three most important words in investing: "I don't know."

 

 

Indeed, investors are facing uncertainty and binary event risk relating to the trade war, monetary policy, and the Israeli-Iran conflict. How can mere mortals like us pretend to forecast the future?

 

In circumstances like these, it's better to say, "I don't know."

 

The full post can be found here. 

 

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.    

How to Capitalize on Narrative Volatility

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: Neutral (Last changed from “bearish” on 16-May-2025)*
• Trading model: Neutral (Last changed from “bullish” on 14-Apr-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.

 

Waiting for the Next Shoe to Drop

Michael Kantro at Piper Sandler recently highlighted the unusual elevated levels of narrative volatility in AAII sentiment. As a consequence, the volatility has created “a lot of false-start leadership moments for rate-sensitives and small caps”.

Kantro’s observation is consistent with our own analysis of an elevated VIX Index during the trade war phase of Trump 1.0. Here are several set-ups of sources of volatility or upcoming reversals in the near term that could rattle traders. The suggested trades are the combination of identifiable underlying trends and technical breaks as signals for short-term profit. 

In other words, when does the next shoe drop and how can traders capitalize on the break?

The full post can be found here.

 

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.   

 

A Preview of the Trump Fed

In the wake of the tame May CPI report, the Trump Administration publicly pressured the Fed to cut rates on social media. CNBC reported that Trump called Powell a “numbskull” and he “may have to force something” if Powell doesn’t act.

No serious economist takes Trump’s desire to cut rates by 1% seriously. However, as Jerome Powell’s term as Fed Chair nears its end, it is useful to consider how a Trump-dominated Federal Reserve might affect future policy in the future.
 

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.   

I want to believe

Mid-week market update:  One of the running themes of the TV show, the X-Files, is a poster on the wall of FBI agent Mulder with the caption "I want to believe". 

 

As the S&P 500 breaks out at the 6000 resistance level and Street strategists scramble to their index targets, I also want to believe in that stocks can go higher, but I have my doubts.

 

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.  

 

A cresting tide?

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: Neutral (Last changed from “neutral” on 16-May-2025)*
• Trading model: Neutral (Last changed from “bullish” on 14-Apr-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.

Weak Breadth and Narrow Leadership

As the S&P 500 tests a key resistance level, the underlying market action is starting to feel like a cresting tide. Beneath the surface, the equal-weighted index has yet to reach its own resistance level, indicating poor breadth and narrow leadership.

 The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.  

Why "Sell America" isn't equity bearish

I have been fairly cautious in my U.S. equity outlook in these pages, but that doesn’t mean I am equity bearish. The accompanying chart shows the progress of different major regional stock markets priced in USD in the last 20 years. With the exception of China, whose stock market doesn’t reflect its economy, stock prices have risen in various degrees over that time period.

 
The top panel of the chart shows that S&P 500 has handily beaten global markets since the GFC and it has retreated back to the rising trend line. Conventional technical analysis calls for investors to buy the dip, with a stop loss just below the trend line. I argue for the Sell America trade of minimizing exposure to USD assets in a broadly diversified portfolio.
 

The full post can be found here.

 

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.    

 

The S&P 500 nears a ceiling

Mid-week market update: The S&P 500 has been a little stronger than I expected as it tests upside resistance. I would urge traders to exercise caution as the market is exhibiting negative RSI divergences. Even though these kinds of divergences can persist for a while, they nevertheless indicate limited upside potential.

 

 

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.    

Bullish exhaustion = Pullback or consolidation

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: Neutral (Last changed from “neutral” on 16-May-2025)*
• Trading model: Neutral (Last changed from “bullish” on 14-Apr-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.

Bullish Exhaustion

You can tell a lot about market psychology by the way it responds to news.

The accompanying chart shows how the S&P 500 responded in the extended trading hours and during the trading day to important news. Why did the S&P 500 rally 2.1% after Trump announced he was pausing the 50% tariffs on the EU for a month? Why did the index initially rally but ended the trading day with just a 0.4% gain last Thursday when the U.S. Court of International Trade ruled that Trump exceeded his authority when he imposed “Liberation Day” tariffs and the tariffs on Canada, Mexico and China for fentanyl smuggling?
 

Stock prices weakened Friday in reaction to an angry social media declaration by President Trump that China had violated its trade agreement. I interpret the market’s inability to react to good news as a sign of bullish exhaustion.

 

The full post can be found here.

 

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.      

Don't buy that TACO just yet

TACO stands for “Trump Always Chickens Out” in trade negotiations. Financial Times journalist Robert Armstrong coined the term “TACO trade” as a colourful way of characterizing the Trump Put. When questioned by a reporter, Trump turned livid when he learned what TACO stood for.

It is in that context when, later in the day, the three-judge panel of the U.S. Court of International Trade unanimously ruled against the Trump Administration in VOS Selections v U.S. and struck down a whole range of tariffs by citing a lack of authority. The most equity bullish outcome would have been Trump taking this legal exit ramp to retreat from his trade war. Instead, he doubled down with the following social media message, possibly egged on by the TACO question. What was even more disturbing was the inclusion of Pepe the frog (my highlight), which was an image appropriated by White supremacists during the 2016 election.

 

The full post can be found here.

 

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.     

Don't just obsess over NVIDIA

Mid-week market update: On the weekend, I presented this inverted chart of the S&P 500 as a different perspective and rhetorically asked, "Would you buy a stock with this chart?"

 

 

At the time, I had a slight bearish tilt on the market. Since then, the news backdrop has been calming. Trump extended the deadline for the implemented of the 50% tariffs on EU imports from June to July. The Japanese long bond initially rallied on news of a lower than expected supply, though the auction overnight of the 40-year JGB was disappointing. Consumer confidence unexpectedly improved, and the prospect of a nuclear deal with Iran may be on the horizon, which would reduce the geopolitical risk premium.

 

The S&P 500 calmed as well, and it's now back to test the trend line. The next big catalyst is the NVIDIA earnings report due after the close today.
 

While NVIDIA will largely determine the market's short-term direction, investors can find other pockets of superior performance.

 

The full post can be found here.

 

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.   

 

Bond vigilantes and trade tensions derail the momentum 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). 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: Neutral (Last changed from “neutral” on 16-May-2025)*
• Trading model: Neutral (Last changed from “bullish” on 14-Apr-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 Wide Trading Range

I warned you. Last week, I warned that the stock market was undergoing a wide trading range because of policy uncertainty (see What the Trade Détente Means for Investors): “The news out of the meeting in Geneva underlines an important point about the latest market tantrum and recovery. It was all attributable to U.S. policy that depends on the whims of one man, whose opinions can be unpredictable.”

I also argued that it was time for the stock market to take a breather. Since then, the S&P 500 began to pull back. The catalysts came in the form of a credit downgrade to U.S. debt and a poor 20-year Treasury auction, followed by President Trump’s threat to put a 50% tariff on the EU and a 25% tariff on Apple products not assembled in the U.S.

 

Let’s start with the fallout from the debt downgrade and bond market tantrum. While the sample size is extremely small (n=2), the experience from past credit downgrades has shown sloppy S&P 500 returns on a short-term horizon and positive on a 6–12-month time horizon. At a minimum, stock prices need some time to digest their gains after the rebound off the April low.

 

The full post can be found here.

 

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.   

Sell America = Buy Gold

I am reiterating my bullish view on gold. Gold staged an upside breakout through a cup-and-handle pattern at 2100 in early 2024 and hasn’t looked back since. Moreover, it has staged upside relative breakouts against both the S&P 500 and a 60/40 proxy and it has stayed above the relative breakout levels even after the recent pullback. The technical pattern of multi-year bases and subsequent absolute and relative breakouts is highly reminiscent of the pattern experienced by gold at the start of the 21st Century, which took the yellow metal from its breakout at 500 in 2004 to significant higher prices.
 

I believe this is just the start of a secular bull cycle for gold prices, based on a secular Sell America investment cycle.
 

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.  

Is Sell America sneaking up on the equity bulls?

Mid-week market update: The S&P 500 were consolidating its gains after the upside price gap in reaction to the Sino-American interim trade agreement. You can tell a lot about the psychology of a market by the way it reacts to gaps. So far, the gap hasn't been filled - and some gaps are never filled, which is a bullish development.

 

 

Beneath the surface, however, risks are rising, especially in the form of the ascendance of the "Sell America trade".

 

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates. 

S&P 500: A Healing Patient Who Needs Rest

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: Bearish (Last changed from “neutral” on 11-Apr-2025)*
• Trading model: Neutral (Last changed from “bullish” on 14-Apr-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 Bullish Recovery

The bullish recovery of the S&P 500 has been astounding in speed and magnitude. Not only has the S&P 500 regained its 200 dma, but also the NYSE Advance-Decline Line has made an all-time high. This is a welcome bullish development. That said, weakness in the mid- and small-cap A-D Lines is disconcerting.

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.

What the Trade Détente Means for Investors

Treasury Secretary Scott Bessent didn’t return from Switzerland and proclaim “Trade peace in our time” while waving a piece of paper. Instead, the interim deal represented a signal toward a trade détente and the acknowledgement that China is an equal in global trade with the U.S.

The agreement. lowered the U.S. tariff on Chinese imports from 145% to 30% for 90 days. China reciprocated by lowering its tariffs on U.S. imports to 10%. Shipping bookings skyrocketed in response and the deal took the tail-risk of a recession off the table.
 

It’s no surprise that the stock market rallied.
 

Before you become overly excited, analysis from the Budget Lab at Yale found that the average effective tariff rate is now 17.8% pre-substitution for high-priced imports and 16.4% post-substitution, which are still very high by historical standards.

Here’s what the trade détente means for investors.
 

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.    

From Fear to Greed

Mid-week market update: The market's turnaround on Monday was remarkable. Going into Friday, expectations for the Geneva trade talks weren't high. Trump had floated a reduction in the tariff rate to 80%. Instead, the U.S. cut the rate to 30%, and China cut its rate to 10%. With recession tail-risk fading, it's not a surprise that markets went full risk-on.

 

There are lots of reasons to turn bullish. Numerous price momentum studies point to significant higher stock prices. On the other hand, the Fear & Greed Index has recovered from a fearful to a greedy reading. It may be a time for a pause in the advance.

 

 The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.     

A Sector and Factor Review of Market Internals

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: Bearish (Last changed from “neutral” on 11-Apr-2025)*
• Trading model: Neutral (Last changed from “bullish” on 14-Apr-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 Leadership Review

The recovery of the S&P 500 off the “Liberation Day” downdraft seems to be stalling just below the 200 dma. A review of value and growth leadership shows that the rebound was led by growth stocks, both on a global basis and across all market cap bands.

 
Does that mean the rally is vulnerable to a setback in growth names? We review the character of market leadership to answer that question.

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.    

Why the Detox Isn't Over

Treasury Secretary Scott Bessent has warned that the economy may need to undergo a detox period before it returns to more stable growth. Since that warning, stock prices sharply pulled back and the VIX Index spiked to above 60, which are levels not seen since the 2024 bottom, the COVID Crash and the GFC. Related sentiment indicators, such as the term structure of the VIX, inverted, indicating high levels of fear. The market subsequently experienced a Zweig Breadth Thrust, which is an indicator of price momentum consistent with market bottoms. Is the detox over and is the bull back?

I don’t think so.

The stock market isn’t the economy, but it is nevertheless related to the economy. Investors need to distinguish between the likely economic effects of events and the market reaction to the events. The initial VIX spike to over 60 in the wake of the “Liberation Day” announcement was consistent with the blinding end-of-world fear that occurs at market bottoms. Usually, the subsequent bottom has been accompanied by the reduction or elimination of tail-risk by policy makers. This time, the tail-risk of a recession is very real and there are no signs of significant policy mitigation.

Here are some historical lessons from past fear spikes.

The full post can be found here.

 

Special announcement: Humble Student of the Markets will cease publication on March 31, 2026. See this announcement for more details and updates.