Mark Bates

April 2021 Analysis Summary

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Economic Phase:  Continues 5-3 in favor of continued Expansion.  Specifically indicating Phase 2 (late Expansion).  No change from last month end.

  • Expectation:  continued growth of the economy and sectors that are highly correlated to economic expansion
  • As others have noted, inflation will likely continue to inch up as well

Retirement ETF Portfolio:  No additional BUY signals.  No SELL signals read more

March 31 2021 Analysis Summary

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Economic Phase:  5-3 in favor of continued Expansion.  Specifically indicating Phase 2 (late Expansion).  No change from last month end.

  • Expectation:  continued growth of the economy and sectors that are highly correlated to economic expansion
  • As others have noted, inflation will likely continue to inch up as well

Retirement ETF Portfolio:  BUY signal for XLU (SPDR Utilities).  No SELL signals read more

Monday 3/29 Dagnino article on Bond Markets

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On Monday Dagnino wrote an article on the Bond Market.  He is right.  His takeaways in his own words:
  • The markets have been tightening by raising the cost of long-term money. The Fed cannot do anything about it. They cannot lower interest rates because they are at zero percent.
  • More debt (stimulus) cannot overcome the tightening caused by rising bond yields.
  • The business cycle is much closer to the end of Phase 2 (strong growth phase) than the beginning of Phase 1 (beginning of the expansion phase). 
The most important point is that third bullet:  when we hit end of Phase 2 the economy will overheat and begin to top off.  The market generally leads the economy by 6 months.  So it is important to keep careful watch on things.  Individual stocks and individual sectors will lead and roll over earlier than others.  In the meantime inflation should continue to climb.

 

 

https://seekingalpha.com/article/4416604-bond-market-is-tightening-fed-is-in-box-economy-will-pay?mail_subject=george-dagnino-the-bond-market-is-tightening-the-fed-is-in-a-box-the-economy-will-pay&utm_campaign=rta-author-article&utm_content=link-0&utm_medium=email&utm_source=seeking_alpha read more

Dagnino post 3/1 on Economic Phase, TLT

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A couple of takeaways from Dagnino’s post at 12:05am this morning:
  • He believes that we are in Phase 2 of the economic cycle.  Our algorithms agree with that.  It bodes well in the near term for stocks.
  • He says that TLT is a trading opportunity.  He shows a chart where ROC (Rate of Change) is below a target of -10.  To me that is a short term trading opportunity.  Good to take a flyer on, but lon-term TLT is going down due to the influx of money into the economy.  Inflation will be on the rise at least for a while, and the FED won’t stop it because to a point (2% or so 3 mo treasury rate) that is where they want it.

https://seekingalpha.com/article/4410215-buy-bonds-for-a-trade?mail_subject=george-dagnino-buy-bonds-for-a-trade&utm_campaign=rta-author-article&utm_content=link-0&utm_medium=email&utm_source=seeking_alpha read more