2014: Better Last Two Days

As noted in this weekend’s video, short-term improvements must be balanced with the intermediate and longer-term evidence. The S&P 500’s intraday rally last Thursday and strong reaction to Friday’s payroll report were unquestionably impressive (see chart below). However…

Short-Term Set-Ups Relevant, But They Can Fail

We use candlesticks as one of many inputs in our “weight of the evidence” approach to investing. Therefore, we believe candlesticks are helpful. However, as a handful of anecdotal examples below show, putting too much emphasis on short-term improvements can backfire.

1990 Bullish Set-Up / BEFORE:

1990 AFTER:

1994 OCT Bullish Set-Up / BEFORE:

1994 OCT AFTER:

1994 SEP Bullish Set-Up / BEFORE:

1994 SEP AFTER:

1996 Bullish Set-Up / BEFORE:

1996 AFTER:

1997 MAR Bullish Set-Up / BEFORE:

1997 MAR AFTER:

1997 OCT Bullish Set-Up / BEFORE:

1997 OCT AFTER:

1997 DEC Bullish Set-Up / BEFORE:

1997 DEC AFTER:

1998 Bullish Set-Up / BEFORE:

1998 AFTER: