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Ed Clissold Profile picture
@edclissold
Sep 12, 2022 • 5 tweets • 2 min read • Read on X
Scrolly
Going thru charts, these 5 stood out:
1. Friday was a 12:1 up day (advancing volume/declining volume) based on NDR Multi-Cap universe. For a double 10:1 up day, we need another 10:1 day because the Aug 10 10:1 up day was negated by the Aug 22 10:1 down day. @NDR_Research 1/5
2. The % stocks >10-day moving averages jumped from 6% on Tues to 86% on Fri. Has to climb above 90% to trigger a breadth thrust. 2/5
3. CPI report on Tues is the big report of the week. Can stocks rally with high inflation? Yes, if it's high *and* falling. The y/y CPI is likely to fall below its 6-month moving average, but in reality this cycle the market has already rallied in anticipation of it. 3/5
4. The 26-week change in the commodity prices fell below 4% for the first time since Aug 2020. 4/5
5. Not everything is rosy on the inflation front. The core CPI hasn't rolled over as quickly. Stocks have risen at a slower rate when the overall CPI has been greater than the core CPI. Perhaps low food and energy prices are good, but inflation broadly contained is better? 5/5

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More from @edclissold

Ed Clissold Profile picture
Aug 16
Lots of takes on poor breadth. Not perfect but far from terrible. A🧵
Some point to mega-caps dominating returns. 4 stocks >50% of the S&P 500's YTD gain.
But that's normal for a cap-weighted index. The biggest stocks account for most of the gains in up years. @NDR_Research 1/7 Image
It's OK for the generals to lead if the infantry follows. 59% of S&P 500 stocks >50D & 200D moving averages.
The broader NDR Multi-Cap is at 58% & 57%. Not fantastic but pretty good.
Even small-caps are >50%, and they have better 10-day breadth (67%) 2/7 Image
Breadth decent across style boxes. Only small-cap Growth and Value <50% above 200D M.A.
Short-term breadth worse for large- and mid-cap Growth but better for SMID Value. Looks for like a rotation than a breadth breakdown. 3/7 Image
Read 7 tweets
Ed Clissold Profile picture
Jul 26
History doesn't repeat, but it does rhyme. Despite the volatility the S&P 500 has been following the typical post-election year trend. The trend peaks in early August, and the year-end rally is weaker than normal.
Why and is it relevant in 2025? A 🧵 @NDR_Research 1/7 Image
The reason 2H of post-election years tends to be weak is that the combo of monetary & fiscal policy tends to peak early in post-election years. Policy remains restrictive until shortly before mid-terms, on average. 2/7 Image
Government policy has been especially restrictive in the 1st year of 2nd terms. Policy growth was negative in 4 of the last 5 "year 5s" Presidents are more concerned about legacy than the economy in the ST. They know lame duck status is quickly approaching. 2/7 Image
Read 7 tweets
Ed Clissold Profile picture
Dec 14, 2024
The @NDR_Research SPX Cycle Composite is pretty bullish on 2025, esp. 1H. Why?
First, what is the Cycle Composite? An average of 3 historical price patterns: 1yr, 4yr (post election yrs), and 10yr (yrs ending in 5). Think of it has history's view of what 2025 can look like? 1/4 Image
The 1 yr and 4 yr are intuitive. Fund flows & IPOs follow seasonal patterns, as does gov’t policy around pres. elections.
Why the 10 yr? The Kondratieff cycle shows the economy goes thru 10yr boom and bust waves. Years ending in 5 are by far the best for the SPX, on avg. 2/4 Image
Only 2 recessions in year 5s. 1945 (demilitarization) & 1975 (ended in March 1975).
SPX has declined only once in a year 5 since 1895. That was in 2015, also the only year 5 that includes an @NDR_Research defined cyclical bear market. 3/4 Image
Read 4 tweets
Ed Clissold Profile picture
Dec 7, 2024
Funny what of my research gets picked up and what doesn't. On Monday we featured this table showing that the year after the S&P 500 has logged at least 50 record highs, stocks have been weak.
I get it. Simple sells. Being bearish sells (up to a point). @NDR_Research 1/3 Image
But factoids are not research. Nuance matters. The logic behind the study is by the time the market logs so many records, it has not only recovered from a bear but the bull is mature. Trees don't grow to the sky.
But bears don't die of old age, either. They need a catalyst. 2/3 Image
Of the 7 cases, only 2 were weak right away. 3 were strong 1H, weak 2H (1929 crash, 2015 oil & Chinese growth, 2018 Fed tightening), 2 were solid all year.

My takeaway is we enter 2025 in good shape but potential negative catalysts are out there (inflation, EPS slowdown). 3/3 Image
Read 4 tweets
Ed Clissold Profile picture
Mar 1, 2024
A 🧵on the election and markets:
Biden/Trump is a rematch no one wants, but Biden in particular has an approval rating issue. At 41%, he has the lowest of any president seeking reelection at this point in the year. The median for incumbents who won is 55%. @NDR_Research 1/5 Image
Taking Biden's reelection bid out of the equation, presidential approval acts like any sentiment indicator. A low % implies pessimism, which tends to be bullish for stocks.
For approval rating there's a "no bad it's bad" zone but Biden's approval would need to fall 6 points. 2/5 Image
The start of election years tends to be weak. Stocks have done better when the incumbent party has gone on to retain the White House. It's a chicken-and-egg argument. A strong economy helps stocks and therefore helps the incumbent. 3/5 Image
Read 5 tweets
Ed Clissold Profile picture
Jan 26, 2024
The Fed is preparing the markets for a rate cut. Cuts have been bullish on avg. The DJIA has been flat before the 1st cut & up 15% a year later.
Context matters, esp. vs the economic cycle. (Btw, we use the DJIA for more history but trends are similar w/SPX). @NDR_Research 1/5 Image
When the Fed has avoided recession, stocks have ripped higher, +24% 1 yr later.
When the economy has been in recession within a year of the 1st cut, the DJIA has weak beforehand but +10% 1 yr later. Most of the gains came in months 8-12. Why? Again, context matters. 2/5 Image
Historically the Fed waited until near the end of the recession, after much of the damage was done.
When the Fed cut early in recession, stocks were mixed for months before rallying.
When the Fed cut before recession, the DJIA fell for 10 more months, on avg. 3/5 Image
Read 5 tweets

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