1 00:00:02,040 --> 00:00:06,000 Speaker 1: This is Master's in Business with very Rid Holds on 2 00:00:06,240 --> 00:00:07,320 Speaker 1: Bloomberg Radio. 3 00:00:10,280 --> 00:00:12,840 Speaker 2: This week on the podcast, I have a special guest. 4 00:00:13,160 --> 00:00:17,960 Speaker 2: Steve Suttmeyer has been in the technical analysis game for 5 00:00:18,000 --> 00:00:22,800 Speaker 2: a long time. He is chief Equity technical Strategist at 6 00:00:22,840 --> 00:00:25,640 Speaker 2: be of A Securities, and he is a double threat. 7 00:00:25,800 --> 00:00:30,280 Speaker 2: He has both a CMT and a CFA. Looks at 8 00:00:30,280 --> 00:00:34,120 Speaker 2: the world from a very interesting perspective I get via 9 00:00:34,200 --> 00:00:38,920 Speaker 2: a research. In particular, I really enjoy Steve's monthly chart 10 00:00:38,960 --> 00:00:43,519 Speaker 2: blasts as well as his overview. Every now and then 11 00:00:43,600 --> 00:00:46,000 Speaker 2: he'll do a deep dive into things like sentiment or 12 00:00:46,040 --> 00:00:49,560 Speaker 2: sector rotation. I find his work to be very informative 13 00:00:49,600 --> 00:00:52,479 Speaker 2: and very useful, and I think you will also. With 14 00:00:52,600 --> 00:00:56,920 Speaker 2: no further ado my conversation with be of A Securities, 15 00:00:57,360 --> 00:01:01,760 Speaker 2: Steven Suttmeyer, Thank you very much. All right, So yeah, 16 00:01:01,800 --> 00:01:03,640 Speaker 2: I'm glad to have you. So, so let's talk a 17 00:01:03,640 --> 00:01:06,240 Speaker 2: little bit about your background. So you get an MBA 18 00:01:06,360 --> 00:01:09,080 Speaker 2: from Fordham. What was the original career plan? 19 00:01:09,800 --> 00:01:15,240 Speaker 1: Yeah, so I went to Fairview University undergrad and it 20 00:01:15,280 --> 00:01:16,400 Speaker 1: was right. I didn't put it this way. It was 21 00:01:16,440 --> 00:01:19,320 Speaker 1: right right after nineteen em crash. I was there from 22 00:01:19,319 --> 00:01:22,360 Speaker 1: not eighty nine to ninety three. Right, So instead of 23 00:01:22,360 --> 00:01:27,080 Speaker 1: pursuing business, I pursued pre med and since my writing 24 00:01:27,120 --> 00:01:30,119 Speaker 1: skills weren't all off the snuff, I just dove in said, 25 00:01:30,160 --> 00:01:31,399 Speaker 1: you know, let me get a double major and do 26 00:01:31,440 --> 00:01:34,360 Speaker 1: English writing. So I wanted to challenge myself improve my 27 00:01:34,400 --> 00:01:38,280 Speaker 1: communication skills, you know, through through the writing process. Long 28 00:01:38,280 --> 00:01:40,080 Speaker 1: story short, you know, get out of college. It was 29 00:01:40,120 --> 00:01:42,320 Speaker 1: a tough time. You know, it was the early nineties, 30 00:01:42,360 --> 00:01:44,480 Speaker 1: and you know it was hard to find, you know, jobs, 31 00:01:44,520 --> 00:01:47,440 Speaker 1: and I was not a good standardized test taker, right, 32 00:01:47,480 --> 00:01:50,440 Speaker 1: so my MCATs were bad, but I took them three 33 00:01:50,480 --> 00:01:53,040 Speaker 1: times but I managed to jump my score, right, So 34 00:01:53,120 --> 00:01:55,080 Speaker 1: I still was able to get a few interviews in 35 00:01:55,120 --> 00:01:57,360 Speaker 1: med school. But I kind of changed my mind. I 36 00:01:57,360 --> 00:02:02,400 Speaker 1: want I wanted to do so after So what I 37 00:02:02,400 --> 00:02:04,600 Speaker 1: did was I was looking around for finance jobs and 38 00:02:04,600 --> 00:02:06,600 Speaker 1: obviously you're not going to hire you know, a pre 39 00:02:06,680 --> 00:02:10,120 Speaker 1: med bio major in English writing major, you know, right 40 00:02:10,160 --> 00:02:13,680 Speaker 1: off the street. Right, So so I just answered ad 41 00:02:13,720 --> 00:02:16,040 Speaker 1: from the paper and guess where I wound up. I 42 00:02:16,080 --> 00:02:18,760 Speaker 1: wound out out of the boiler room right across from Strattonopemont, 43 00:02:18,840 --> 00:02:20,239 Speaker 1: oh in nineteen ninety four. 44 00:02:20,520 --> 00:02:22,440 Speaker 2: What were you doing there. I was one of those 45 00:02:22,440 --> 00:02:24,240 Speaker 2: coal callers, no kidding, and. 46 00:02:24,080 --> 00:02:27,640 Speaker 1: You know, quite frankly, it was a very interesting learning experience. 47 00:02:27,720 --> 00:02:28,840 Speaker 1: I was only there for a year and a half 48 00:02:28,919 --> 00:02:31,560 Speaker 1: because if you've see in the movie boiler Room, sure 49 00:02:32,240 --> 00:02:33,720 Speaker 1: I lived it was. 50 00:02:33,400 --> 00:02:34,600 Speaker 2: That was that accurate. 51 00:02:34,760 --> 00:02:37,120 Speaker 1: I mean, their office was a lot nicer than ours, 52 00:02:37,160 --> 00:02:40,160 Speaker 1: but generally speaking, was fairly accurate. And I remember when 53 00:02:40,160 --> 00:02:42,280 Speaker 1: he was studying for the series seven. In the movie, 54 00:02:42,320 --> 00:02:45,320 Speaker 1: He's like he's realizing, wait a second, you know, they're 55 00:02:45,360 --> 00:02:47,799 Speaker 1: doing things that are not right. And I'm sitting there like, man, 56 00:02:47,800 --> 00:02:51,160 Speaker 1: I'm glad I'm not licensed yet, because the last thing 57 00:02:51,200 --> 00:02:53,080 Speaker 1: I want to do is, you know, get booted out 58 00:02:53,080 --> 00:02:54,440 Speaker 1: of the business before I even start. 59 00:02:54,560 --> 00:02:57,239 Speaker 2: So, you know, you know that scene in Wolf of 60 00:02:57,280 --> 00:03:00,480 Speaker 2: Wall Street where where DiCaprio sits down the room and 61 00:03:00,520 --> 00:03:04,639 Speaker 2: makes that first call. I worked with guys who were 62 00:03:04,800 --> 00:03:09,000 Speaker 2: that good but came from that same sort of background, 63 00:03:09,000 --> 00:03:11,760 Speaker 2: and they all seemed to be too impatient to get 64 00:03:11,840 --> 00:03:15,600 Speaker 2: rich slowly. But a lot of these things really resonate, 65 00:03:15,720 --> 00:03:18,840 Speaker 2: really come across as that was a real thing in 66 00:03:18,880 --> 00:03:19,959 Speaker 2: the eighties and nineties. 67 00:03:20,320 --> 00:03:22,800 Speaker 1: It was, and you know, I just learned that, you know, 68 00:03:23,000 --> 00:03:25,360 Speaker 1: I just just the antennas were off, and I'm like, this. 69 00:03:25,280 --> 00:03:26,960 Speaker 2: Is not where I want to be, to say the 70 00:03:27,040 --> 00:03:27,520 Speaker 2: very least. 71 00:03:27,560 --> 00:03:29,480 Speaker 1: And then and then the funny thing about it was 72 00:03:29,520 --> 00:03:31,760 Speaker 1: when when I see those movies, both Boiler and Man 73 00:03:31,760 --> 00:03:34,239 Speaker 1: Walf of Wall Street, the script that they're reading from 74 00:03:34,320 --> 00:03:35,960 Speaker 1: is exactly the script that they gave us. 75 00:03:36,480 --> 00:03:39,320 Speaker 2: You know, whoever did their research, you know, they found 76 00:03:39,360 --> 00:03:41,920 Speaker 2: a bunch of stuff and it was it was pretty amazing. 77 00:03:41,960 --> 00:03:45,000 Speaker 2: So you work, you leave that world, and you go 78 00:03:45,080 --> 00:03:47,440 Speaker 2: to a few boutique shops, that's right. You work at 79 00:03:47,560 --> 00:03:51,640 Speaker 2: Capital Growth Financial and informer global markets before you join 80 00:03:51,840 --> 00:03:55,800 Speaker 2: investing Giant Merrill Lynch in two thousand and seven. What 81 00:03:55,960 --> 00:04:00,480 Speaker 2: was that transition like from smaller shops to a really 82 00:04:00,520 --> 00:04:01,080 Speaker 2: big one. 83 00:04:01,480 --> 00:04:03,400 Speaker 1: Well, I mean, that's that's a great question. Let me 84 00:04:03,440 --> 00:04:06,839 Speaker 1: just spend thirty seconds before answering that. I was lucky 85 00:04:06,880 --> 00:04:08,720 Speaker 1: to have a dad in the business, you know, so 86 00:04:08,880 --> 00:04:12,240 Speaker 1: he didn't take me on, you know, initially, and I 87 00:04:12,280 --> 00:04:14,520 Speaker 1: had to go through kind of like that that McDonald's thing, 88 00:04:14,600 --> 00:04:17,400 Speaker 1: working the fries at the boiler room kind of thing, right, 89 00:04:17,480 --> 00:04:19,480 Speaker 1: And then in nineteen ninety six I actually worked for 90 00:04:19,520 --> 00:04:21,400 Speaker 1: him for a little while and we went down to 91 00:04:21,400 --> 00:04:23,520 Speaker 1: a firm in Florida, and then you know, I made 92 00:04:23,520 --> 00:04:26,320 Speaker 1: friends with some people in the research apartment there, and 93 00:04:26,520 --> 00:04:29,280 Speaker 1: that's when I started to focus on research. So first 94 00:04:29,279 --> 00:04:32,320 Speaker 1: it was a hybrid technical fundamental, and then and then 95 00:04:32,560 --> 00:04:34,320 Speaker 1: you know, went to fundamental and then went back to 96 00:04:34,360 --> 00:04:36,760 Speaker 1: technical full time. So the reason why I went on 97 00:04:36,800 --> 00:04:40,600 Speaker 1: to Merrill Lynch was, look, I was, you know, entrepreneurial. 98 00:04:41,320 --> 00:04:45,080 Speaker 1: I worked for small firms that that we could have 99 00:04:45,080 --> 00:04:48,360 Speaker 1: built into a big business. But the problem was we 100 00:04:48,360 --> 00:04:51,520 Speaker 1: were charging four cents a share, and you know that 101 00:04:51,520 --> 00:04:53,520 Speaker 1: make a long story short. Everybody else was charging one 102 00:04:53,720 --> 00:04:55,520 Speaker 1: or you know, even less than that, and you know, 103 00:04:55,560 --> 00:04:57,719 Speaker 1: we weren't able to compete, and that makes sense. It 104 00:04:57,720 --> 00:04:58,960 Speaker 1: was very hard. So I'm like, let me get to 105 00:04:59,000 --> 00:05:02,799 Speaker 1: somewhere more stable, big mother Merril in two thousand and seven, 106 00:05:02,920 --> 00:05:06,679 Speaker 1: right stable, Perfect, little that I know what was gonna 107 00:05:06,680 --> 00:05:08,320 Speaker 1: happen two years later? Perfect? 108 00:05:08,320 --> 00:05:11,840 Speaker 2: Well, let's talk later. Let's jump ahead to a question 109 00:05:11,880 --> 00:05:14,680 Speaker 2: I was going to ask you later. You join Merrill 110 00:05:14,760 --> 00:05:17,520 Speaker 2: in March of two thousand and seven, right on the 111 00:05:18,240 --> 00:05:20,840 Speaker 2: you know, verge of an epic a cusp of an 112 00:05:20,880 --> 00:05:24,919 Speaker 2: epic meltdown? What was that year at Meryll like that 113 00:05:25,040 --> 00:05:26,680 Speaker 2: had to be kind of wild. 114 00:05:27,839 --> 00:05:30,360 Speaker 1: Yeah, of course, I mean it's just I just remember 115 00:05:30,440 --> 00:05:32,400 Speaker 1: because I was a little bit more season, you know. 116 00:05:32,440 --> 00:05:36,320 Speaker 1: I've been in the business fifteen sixteen, seventeen, no, no, 117 00:05:36,440 --> 00:05:40,400 Speaker 1: fourteen years, fifteen years when that hit, and I just 118 00:05:40,440 --> 00:05:44,159 Speaker 1: remember the weekend of you know, the shotgun wedding, you know, 119 00:05:44,200 --> 00:05:47,159 Speaker 1: in two thousand and eight. I just remember sitting down 120 00:05:47,200 --> 00:05:49,080 Speaker 1: with some of my colleagues who are a lot younger, 121 00:05:49,120 --> 00:05:52,000 Speaker 1: and they're like, what do we do. I'm like, well, 122 00:05:52,040 --> 00:05:54,440 Speaker 1: you know what, you do your job until someone says. 123 00:05:54,200 --> 00:05:56,719 Speaker 2: You can't because your head down keep working. 124 00:05:56,800 --> 00:05:59,320 Speaker 1: I mean, you know, I've worked at other firms where 125 00:05:59,320 --> 00:06:02,039 Speaker 1: they had LAO like every few months, and you know, 126 00:06:02,080 --> 00:06:04,719 Speaker 1: we knew when they were coming, and just like, you know, 127 00:06:04,760 --> 00:06:06,479 Speaker 1: you just do your job until you told you can't. 128 00:06:06,600 --> 00:06:07,960 Speaker 1: And that's that, you know. 129 00:06:08,040 --> 00:06:10,800 Speaker 2: I mean, I have a vivid recollection of what was 130 00:06:10,800 --> 00:06:13,840 Speaker 2: his name? Thane was the CEO of Merrill at the time. 131 00:06:14,120 --> 00:06:14,840 Speaker 1: Yes, I believe so. 132 00:06:15,440 --> 00:06:18,360 Speaker 2: And I remember that Whenning comes off and people were 133 00:06:18,400 --> 00:06:20,719 Speaker 2: like really upset about it, and I was like, what 134 00:06:20,760 --> 00:06:23,120 Speaker 2: are you talking about? He just saved the firm. How 135 00:06:23,120 --> 00:06:26,240 Speaker 2: are you possibly? Oh, I'm sorry, your stock options are 136 00:06:26,279 --> 00:06:29,560 Speaker 2: worth a lot less as opposed to zero. Something is 137 00:06:29,600 --> 00:06:30,960 Speaker 2: better than nothing, right. 138 00:06:31,000 --> 00:06:33,320 Speaker 1: Well, I mean, you know, look at the news on 139 00:06:33,360 --> 00:06:35,760 Speaker 1: the weekend that weekend seeing everybody taking boxes out of 140 00:06:35,800 --> 00:06:39,440 Speaker 1: liman embarrassed. So it's like, yeah, it's it's a totally 141 00:06:39,560 --> 00:06:40,520 Speaker 1: it's it's very different. 142 00:06:40,640 --> 00:06:43,200 Speaker 2: Door number one was much better than door number three 143 00:06:43,320 --> 00:06:44,520 Speaker 2: in the circumstance. 144 00:06:44,640 --> 00:06:46,480 Speaker 1: Yeah, I mean, of course, you know obviously after that, 145 00:06:46,600 --> 00:06:49,040 Speaker 1: you know, emerging the two together, you know, the redundancies 146 00:06:49,040 --> 00:06:50,720 Speaker 1: and things like that, and and you know, they took 147 00:06:50,720 --> 00:06:54,120 Speaker 1: the opportunity to you know, at least in you know, 148 00:06:54,440 --> 00:06:57,640 Speaker 1: on on teams that were big, you know, cut them 149 00:06:57,720 --> 00:06:59,280 Speaker 1: essentially in half, right, you know. 150 00:07:00,080 --> 00:07:03,800 Speaker 2: To take the people who they think are the top performers. 151 00:07:03,839 --> 00:07:06,400 Speaker 2: And but that's pretty typical. And that's the way finance 152 00:07:06,480 --> 00:07:08,960 Speaker 2: M and A. Right, that's how it goes. This just 153 00:07:09,000 --> 00:07:11,840 Speaker 2: happened to be done so rapidly. There was hardly any 154 00:07:11,920 --> 00:07:14,480 Speaker 2: time for planning. It seemed like everything was on the fly. 155 00:07:14,800 --> 00:07:16,920 Speaker 1: Yeah. So the biggest thing I was we were worried about. 156 00:07:16,960 --> 00:07:18,800 Speaker 1: So I was working with Mary on Bartell's at the time. 157 00:07:18,840 --> 00:07:22,160 Speaker 1: Oh sure, she was running the department, and you know 158 00:07:22,200 --> 00:07:24,280 Speaker 1: the biggest thing we were worried about. We weren't worried 159 00:07:24,520 --> 00:07:26,360 Speaker 1: in one regard because you know, b of A did 160 00:07:26,360 --> 00:07:28,920 Speaker 1: not have a dedicated technical analysis team. But at the 161 00:07:28,920 --> 00:07:30,480 Speaker 1: same time we were worried that b of A did 162 00:07:30,480 --> 00:07:32,440 Speaker 1: not have a dedicated you know what I mean because. 163 00:07:32,280 --> 00:07:35,680 Speaker 2: Me, they may not appreciate the exact value of it, but. 164 00:07:35,240 --> 00:07:37,320 Speaker 1: But they did. Then they kept us, they kept you know. 165 00:07:37,440 --> 00:07:40,280 Speaker 2: So let me roll back. I jumped ahead. What was 166 00:07:40,320 --> 00:07:42,760 Speaker 2: it that you know, you have a background as both 167 00:07:42,760 --> 00:07:48,800 Speaker 2: the CFA and eventually CMT. Giving your background and fundamentals, 168 00:07:49,080 --> 00:07:51,720 Speaker 2: what was it that attracted you to the technical side. 169 00:07:52,040 --> 00:07:55,120 Speaker 1: Well, I started off technical, which is unusual. Normally is 170 00:07:55,120 --> 00:08:00,320 Speaker 1: the other way around, and it was you know, my 171 00:08:00,920 --> 00:08:04,760 Speaker 1: first research boss. His name was Stefan Haber. He worked 172 00:08:04,760 --> 00:08:09,679 Speaker 1: at Williamarr Huffing Company, and he encouraged me to take 173 00:08:09,760 --> 00:08:14,520 Speaker 1: the CFA exam. And I remember that first level was tough. 174 00:08:14,560 --> 00:08:18,040 Speaker 1: I had no finance background. Accounting was very difficult. 175 00:08:18,080 --> 00:08:20,600 Speaker 2: So it's about a fifty percent fail rate something like that, 176 00:08:20,840 --> 00:08:21,600 Speaker 2: maybe even more. 177 00:08:21,760 --> 00:08:23,600 Speaker 1: I mean the level one was I don't remember at 178 00:08:23,640 --> 00:08:25,840 Speaker 1: that time, but all I do remember was the first 179 00:08:25,840 --> 00:08:27,800 Speaker 1: half of the test. I felt like you know, I 180 00:08:27,840 --> 00:08:30,040 Speaker 1: failed it. So then there on lunch, I guess I 181 00:08:30,040 --> 00:08:32,320 Speaker 1: pulled the Harlem glob trotters and regroups and was able 182 00:08:32,360 --> 00:08:35,440 Speaker 1: to get through the second part pretty easily. So but no, 183 00:08:35,679 --> 00:08:37,920 Speaker 1: it it's that's that's what turned me on to And 184 00:08:37,880 --> 00:08:40,439 Speaker 1: then you know, we had a very fundamentally oriented research group. 185 00:08:40,480 --> 00:08:42,080 Speaker 1: Now I was a technical analyst, so he kind of 186 00:08:42,600 --> 00:08:45,200 Speaker 1: you know, brought me on as a hybrid analyst and 187 00:08:45,240 --> 00:08:46,800 Speaker 1: it was good. I mean I learned a lot from 188 00:08:46,800 --> 00:08:48,800 Speaker 1: when I worked there. You know, I covered you know, 189 00:08:49,280 --> 00:08:51,800 Speaker 1: the first stock I guess I was jointly covering with 190 00:08:51,840 --> 00:08:54,319 Speaker 1: another analyst was J Bill Be you know, which was 191 00:08:54,360 --> 00:08:56,800 Speaker 1: based in Saint Petersburg, So you know, so that was 192 00:08:56,880 --> 00:08:58,800 Speaker 1: kind of fun. Yeah, so I got to learn a 193 00:08:58,840 --> 00:08:59,319 Speaker 1: lot there. 194 00:09:00,120 --> 00:09:04,400 Speaker 2: So so how do these compliment each other? How do 195 00:09:04,679 --> 00:09:10,200 Speaker 2: the fundamentals complement the technicals and does one sort of 196 00:09:10,240 --> 00:09:11,160 Speaker 2: dominate the other? 197 00:09:11,360 --> 00:09:12,079 Speaker 1: Or you. 198 00:09:14,160 --> 00:09:18,600 Speaker 2: Are you a technical analyst with a fundamental sort of 199 00:09:19,320 --> 00:09:22,080 Speaker 2: in your back pocket? Not what the key driver is. 200 00:09:22,760 --> 00:09:26,680 Speaker 1: No, my my primary work is technical. In terms of 201 00:09:26,679 --> 00:09:29,400 Speaker 1: fundamental I rely on our analysts ratings at the firm. 202 00:09:29,520 --> 00:09:33,240 Speaker 1: You know, I look and see, you know what stocks 203 00:09:33,280 --> 00:09:36,679 Speaker 1: they like, what they don't like, and I look at 204 00:09:36,679 --> 00:09:39,680 Speaker 1: the charts, and if it melts with what they're saying, 205 00:09:39,720 --> 00:09:41,200 Speaker 1: I go with it, or if it looks like it's 206 00:09:41,240 --> 00:09:43,000 Speaker 1: going to turn in favor what they're saying, I go 207 00:09:43,080 --> 00:09:45,520 Speaker 1: with it, and vice versa. Of course, there's other times 208 00:09:45,559 --> 00:09:48,280 Speaker 1: where I have a really compelling chart looks bullish, where 209 00:09:48,280 --> 00:09:51,480 Speaker 1: they have underperform on it, I'll publish on it. But 210 00:09:51,520 --> 00:09:53,520 Speaker 1: I always say, hey, here's here. You know, fundamental view 211 00:09:53,559 --> 00:09:55,200 Speaker 1: is different, here's the research. I don't to look at that, 212 00:09:55,240 --> 00:09:57,199 Speaker 1: you know. So I respect the work that they do, 213 00:09:58,440 --> 00:10:01,200 Speaker 1: and you know, I try to try to enhance it 214 00:10:01,200 --> 00:10:05,000 Speaker 1: as much as I possibly can. So for me, though, 215 00:10:05,480 --> 00:10:09,120 Speaker 1: technicals are always first and foremost because that's my role. 216 00:10:09,640 --> 00:10:11,520 Speaker 1: But I mean, obviously you want to own something that 217 00:10:11,559 --> 00:10:14,520 Speaker 1: has some sort of intrinsic value. So I think that's 218 00:10:14,559 --> 00:10:16,400 Speaker 1: the way I would probably think about it, you know, 219 00:10:16,440 --> 00:10:18,480 Speaker 1: more of a you know, of a can Slim type 220 00:10:18,520 --> 00:10:20,760 Speaker 1: of approach, because I was always a whim O'Neal fan, 221 00:10:20,840 --> 00:10:23,240 Speaker 1: and he just passed away a few months ago, so 222 00:10:23,640 --> 00:10:25,200 Speaker 1: that was kind of sad because I was I have 223 00:10:25,280 --> 00:10:27,600 Speaker 1: that book on my on my shelf, you know, as 224 00:10:28,320 --> 00:10:31,040 Speaker 1: we all do. So yeah, I mean it's it is 225 00:10:31,120 --> 00:10:34,040 Speaker 1: a yeah, I mean, I look, I mean, I know 226 00:10:34,880 --> 00:10:39,040 Speaker 1: in another world, you know, if you know, if I've 227 00:10:39,040 --> 00:10:41,560 Speaker 1: ever moved on to somewhere else where, I was, you know, 228 00:10:41,679 --> 00:10:44,240 Speaker 1: doing you know, something in a smaller shop. I'm sure 229 00:10:44,240 --> 00:10:46,040 Speaker 1: I would put that fundamental a hat on a little 230 00:10:46,040 --> 00:10:47,600 Speaker 1: bit more often than I do now. But I don't 231 00:10:47,640 --> 00:10:48,959 Speaker 1: have to now because I got a whole team of 232 00:10:48,960 --> 00:10:51,320 Speaker 1: fundamental analysts that that we rely on. 233 00:10:51,440 --> 00:10:55,760 Speaker 2: You're reminding me of the Ralph akampoor A quote fundamentals 234 00:10:55,800 --> 00:10:59,600 Speaker 2: tell you what to buy. Technicals tell you when accurate. 235 00:11:00,440 --> 00:11:04,520 Speaker 1: I mean, I love the quote, but I don't necessarily 236 00:11:04,600 --> 00:11:07,520 Speaker 1: believe it's entirely accuarate. And here's why I think technicals 237 00:11:07,559 --> 00:11:09,400 Speaker 1: can tell you what to buy as well. Oh really, 238 00:11:09,600 --> 00:11:12,880 Speaker 1: because if you can see a price pattern, you know, 239 00:11:12,920 --> 00:11:17,120 Speaker 1: you can see a trend, and if a stock's building 240 00:11:17,160 --> 00:11:22,720 Speaker 1: a big base, and say the analysts are ninety percent 241 00:11:22,840 --> 00:11:27,200 Speaker 1: cell ratings and a lot of volume is surged down, 242 00:11:27,520 --> 00:11:29,600 Speaker 1: you know, when the stock first declined to say five 243 00:11:29,679 --> 00:11:32,679 Speaker 1: dollars from twenty right, and then volume surge, and all 244 00:11:32,720 --> 00:11:34,520 Speaker 1: of a sudden, you're trading sideways for a long period 245 00:11:34,520 --> 00:11:37,559 Speaker 1: of time unless volume you know your fundamental works saying hey, 246 00:11:37,600 --> 00:11:39,559 Speaker 1: wait a second, you know this seems to be undervalued, 247 00:11:39,679 --> 00:11:41,480 Speaker 1: or or maybe the earnings are going to improve next 248 00:11:41,559 --> 00:11:44,280 Speaker 1: quarter or something like that. You know, that's something I 249 00:11:44,280 --> 00:11:47,400 Speaker 1: would look at to potentially buy, even though technically speaking 250 00:11:47,440 --> 00:11:50,040 Speaker 1: it's not very strong, but it is building a big base. 251 00:11:50,160 --> 00:11:53,360 Speaker 1: And if the relative chart could I do absolute relative work. 252 00:11:53,640 --> 00:12:00,079 Speaker 1: If the relative start chart starts showing outperformance versus you know, 253 00:12:00,160 --> 00:12:02,880 Speaker 1: when compared to the absolute, meaning the market's corrected a lot, 254 00:12:02,920 --> 00:12:04,880 Speaker 1: but this stock is starting to lead, that tells me, 255 00:12:05,200 --> 00:12:07,719 Speaker 1: you know what, somebody may know something I don't, and 256 00:12:07,920 --> 00:12:10,280 Speaker 1: I should, you know, maybe build a position in that name. 257 00:12:11,480 --> 00:12:14,120 Speaker 1: So I think technicals are helpful with what and when. 258 00:12:14,160 --> 00:12:16,080 Speaker 1: In fact, I'm probably more of a what to buy 259 00:12:16,120 --> 00:12:18,280 Speaker 1: than a when to buy type of guy, because look, 260 00:12:18,320 --> 00:12:20,360 Speaker 1: I have to put out a research node, and it's like, 261 00:12:20,840 --> 00:12:22,680 Speaker 1: you know, I can't just say hey, buy this name 262 00:12:22,760 --> 00:12:24,800 Speaker 1: here at this price. It may never hit it. So 263 00:12:24,840 --> 00:12:27,200 Speaker 1: I just kind of say, hey, here's something that looks 264 00:12:27,200 --> 00:12:30,400 Speaker 1: attractive technically. You know, our fundamental analyst has either a 265 00:12:30,400 --> 00:12:32,920 Speaker 1: buy or sell on it, But technically it's attractive. You know, 266 00:12:33,040 --> 00:12:35,760 Speaker 1: I think it's a stock to buy. And you know what, 267 00:12:36,080 --> 00:12:37,640 Speaker 1: I would put the levels in there. If it hits 268 00:12:37,679 --> 00:12:40,640 Speaker 1: these levels, then then it becomes you know, more time 269 00:12:40,640 --> 00:12:43,200 Speaker 1: to buy. But either way, you know, I'm building a 270 00:12:43,200 --> 00:12:45,079 Speaker 1: position there, you know, based on my research. 271 00:12:45,440 --> 00:12:49,679 Speaker 2: So your title is chief equity technical strategist. What is 272 00:12:49,720 --> 00:12:52,320 Speaker 2: a day in the life of the chief equity technical 273 00:12:52,360 --> 00:12:54,520 Speaker 2: strategist at a big shop like Merrill? 274 00:12:54,640 --> 00:12:57,760 Speaker 1: Look like yeah, so b of a when we you know, 275 00:12:57,920 --> 00:13:01,920 Speaker 1: it's it's a combined hybrid world, right, So we service 276 00:13:02,520 --> 00:13:07,120 Speaker 1: the global private clients. So the financial advisors are you know, 277 00:13:07,160 --> 00:13:08,640 Speaker 1: a big part of what we do. We talk to 278 00:13:08,720 --> 00:13:13,160 Speaker 1: them a lot. I do a weekly webcast on Wednesdays 279 00:13:13,160 --> 00:13:16,560 Speaker 1: for them twelve noon. You know, you go on the road, 280 00:13:16,600 --> 00:13:20,600 Speaker 1: you see offices, they ask you question about market stocks, 281 00:13:20,600 --> 00:13:22,040 Speaker 1: things like that, and you try to help them out 282 00:13:22,080 --> 00:13:24,160 Speaker 1: as much as you possibly can. You know, there are 283 00:13:24,160 --> 00:13:27,720 Speaker 1: some financial advisor teams that have me do webcasts for 284 00:13:29,080 --> 00:13:34,000 Speaker 1: you know, clients, you know, periodically, sometimes quarterly, sometimes monthly, 285 00:13:34,800 --> 00:13:37,400 Speaker 1: and sometimes just internal you know, just so they can 286 00:13:37,600 --> 00:13:40,520 Speaker 1: because one thing financial advisors say about the research that 287 00:13:40,559 --> 00:13:44,120 Speaker 1: we put out on the technicals is that I may 288 00:13:44,120 --> 00:13:47,240 Speaker 1: not be a technical analyst, but when I read you know, 289 00:13:47,440 --> 00:13:50,560 Speaker 1: be of a technical research report. It gives me something 290 00:13:50,600 --> 00:13:53,280 Speaker 1: intelligent to tell my clients, especially when times are tough, 291 00:13:54,000 --> 00:13:56,720 Speaker 1: and even if they're not using it other than that purpose. 292 00:13:56,760 --> 00:13:58,000 Speaker 1: I mean, that's a victory right there. 293 00:13:58,200 --> 00:14:00,800 Speaker 2: Right, No, that makes a lot of sense. So let's 294 00:14:00,800 --> 00:14:04,880 Speaker 2: talk a little bit about how technicals work. And I 295 00:14:04,920 --> 00:14:07,640 Speaker 2: want to start just by asking, how do you define 296 00:14:07,760 --> 00:14:11,760 Speaker 2: technical analysis? I've heard lots and lots of different definitions. 297 00:14:12,160 --> 00:14:12,760 Speaker 2: What's yours? 298 00:14:13,120 --> 00:14:15,680 Speaker 1: Yeah, it's a great, great question. I mean, I'm sure 299 00:14:15,720 --> 00:14:20,360 Speaker 1: it's changing as days go by, But for me, I mean, 300 00:14:20,400 --> 00:14:23,960 Speaker 1: we're we're you know, you're using mathematics quantitative methods to 301 00:14:24,040 --> 00:14:26,920 Speaker 1: identify and spot trends and patterns in the financial markets. 302 00:14:26,960 --> 00:14:30,160 Speaker 1: I guess that keeps it pretty simple. So for me, 303 00:14:30,320 --> 00:14:34,560 Speaker 1: it's really just trend following and pattern recognition. I will 304 00:14:34,600 --> 00:14:38,280 Speaker 1: occasionally throw in second derivative type of indicators a price like. 305 00:14:38,240 --> 00:14:41,600 Speaker 2: You know, an RSI or relative strength in that's right. 306 00:14:41,520 --> 00:14:45,480 Speaker 1: Relistrate the indicator generate overbought, over soul, but also involves 307 00:14:45,520 --> 00:14:49,240 Speaker 1: things like breath sentiment. I do a lot of credit 308 00:14:49,240 --> 00:14:51,720 Speaker 1: market work too, you know, just looking at credit spreads 309 00:14:51,720 --> 00:14:51,960 Speaker 1: and things. 310 00:14:52,160 --> 00:14:54,320 Speaker 2: So let's define our terms along the along the way, 311 00:14:54,320 --> 00:14:57,640 Speaker 2: when you're talking about breath, we're talking about the numbers 312 00:14:57,680 --> 00:15:01,320 Speaker 2: of advancers versus decliners. Is is it a broad markets 313 00:15:01,360 --> 00:15:02,280 Speaker 2: in a narrow market? 314 00:15:02,680 --> 00:15:05,200 Speaker 1: And that's one of bob Arrels ten rules. Remember, you know, 315 00:15:05,240 --> 00:15:08,240 Speaker 1: markets are stronger when they're broad and weaker when they're narrow. 316 00:15:08,320 --> 00:15:11,280 Speaker 1: So again, way us a measure market breath would be 317 00:15:11,360 --> 00:15:14,040 Speaker 1: the advanced of client lines you just mentioned, also new 318 00:15:14,080 --> 00:15:16,080 Speaker 1: fifty two week highs, new fifty two week lows. You 319 00:15:16,200 --> 00:15:18,960 Speaker 1: also use four week lows, twenty four week eyes and lows, 320 00:15:18,960 --> 00:15:22,680 Speaker 1: things like that. The other things would be diffusion indicators, 321 00:15:22,680 --> 00:15:25,440 Speaker 1: like the percentage of stocks above moving averages. So if 322 00:15:25,480 --> 00:15:27,760 Speaker 1: you have I mean, you know, interestingly, if you have 323 00:15:27,760 --> 00:15:30,200 Speaker 1: the SMP, you know, above a two hundred day moving average, 324 00:15:30,240 --> 00:15:32,400 Speaker 1: yet you know a few and the fifty percent of 325 00:15:32,400 --> 00:15:34,480 Speaker 1: the stocks are above it, and it kind of tells 326 00:15:34,520 --> 00:15:36,120 Speaker 1: just something about breadth of the market. You know, the 327 00:15:36,160 --> 00:15:39,080 Speaker 1: markets stronger, but more stocks are below the moving averages, 328 00:15:39,120 --> 00:15:40,760 Speaker 1: So I mean, I think that's something to look at. 329 00:15:41,000 --> 00:15:43,280 Speaker 1: So some of these indicators, like the percentage of stocks 330 00:15:43,280 --> 00:15:46,360 Speaker 1: above ten day movement averages, can also be used as momentum, 331 00:15:46,600 --> 00:15:48,760 Speaker 1: you know, so sometimes you can use breath as a momentum. 332 00:15:48,800 --> 00:15:52,040 Speaker 1: So the other thing I mentioned was sentiment, So that 333 00:15:52,120 --> 00:15:55,400 Speaker 1: basically is sentiment and positioning lump and positioning as well. 334 00:15:55,480 --> 00:15:59,240 Speaker 1: So if you're watching sentiment, it's a surveys, you know, 335 00:15:59,360 --> 00:16:04,920 Speaker 1: the the Investors Intelligence Survey, bullbear and correction, and then 336 00:16:04,960 --> 00:16:09,600 Speaker 1: you got aaii bowlbear and neutral you have. So those 337 00:16:09,640 --> 00:16:12,320 Speaker 1: are centiment indicators. What are they telling us what investors 338 00:16:12,320 --> 00:16:15,360 Speaker 1: are doing? Now? Hopefully investors are saying, I mean, what 339 00:16:15,440 --> 00:16:18,120 Speaker 1: investors are saying right right, not doing. Hopefully what they're 340 00:16:18,160 --> 00:16:20,440 Speaker 1: doing is close to what they're saying. That's what sentiment implies. 341 00:16:20,680 --> 00:16:22,280 Speaker 1: But then you overlay that and look at something like 342 00:16:22,280 --> 00:16:24,280 Speaker 1: a POOT call. You know, that tells you more what 343 00:16:24,320 --> 00:16:26,120 Speaker 1: they're doing. You know, the volume of puts are higher 344 00:16:26,120 --> 00:16:28,360 Speaker 1: in the volume of calls that goes above one, that 345 00:16:28,400 --> 00:16:31,520 Speaker 1: means investors are fearful. Another one I look at that 346 00:16:31,600 --> 00:16:36,520 Speaker 1: I find very useful for tactical lows in the market. 347 00:16:36,520 --> 00:16:39,160 Speaker 1: But sometimes more meaningful and tactical would be taking the 348 00:16:39,200 --> 00:16:43,200 Speaker 1: three month VIX the volatility index and dividing it by 349 00:16:43,240 --> 00:16:46,840 Speaker 1: the one month miix. So when that is high like 350 00:16:46,920 --> 00:16:49,640 Speaker 1: one point twenty five or above, investors are like I'm 351 00:16:49,640 --> 00:16:53,400 Speaker 1: not concerned about volatility in the immediate future. I'm more 352 00:16:53,400 --> 00:16:55,840 Speaker 1: concerned about it, you know, later on. But when that 353 00:16:55,880 --> 00:16:57,800 Speaker 1: goes below one, that means the VIX is higher in 354 00:16:57,840 --> 00:17:00,200 Speaker 1: the three month bix. So investors are more concerned about 355 00:17:00,400 --> 00:17:03,160 Speaker 1: volatility now, which means are more fearful. And when you 356 00:17:03,160 --> 00:17:05,080 Speaker 1: have that set up, the market is often closer to 357 00:17:05,160 --> 00:17:05,359 Speaker 1: a lot. 358 00:17:05,800 --> 00:17:10,679 Speaker 2: So everything you've just described as a loaded series of 359 00:17:12,160 --> 00:17:15,399 Speaker 2: follow up questions you've given me. I want to talk 360 00:17:15,440 --> 00:17:19,720 Speaker 2: about sentiment. But you mentioned Farrell. And for folks who 361 00:17:19,720 --> 00:17:23,240 Speaker 2: may not know who Bob Farrell is, tell us a 362 00:17:23,280 --> 00:17:26,119 Speaker 2: little bit about the legendary Bob Farrell. 363 00:17:26,359 --> 00:17:28,880 Speaker 1: Well, I mean he was the dean of technical analysis 364 00:17:28,920 --> 00:17:32,919 Speaker 1: at Merrill Lanch, you know, for a better part of 365 00:17:33,640 --> 00:17:37,679 Speaker 1: had to be forty fifty years right. He has his 366 00:17:38,080 --> 00:17:39,680 Speaker 1: ten rules to remember. 367 00:17:40,160 --> 00:17:44,119 Speaker 2: Which, by the way, have become you know, almost biblical 368 00:17:44,280 --> 00:17:46,080 Speaker 2: for a lot of people in markets, a lot of 369 00:17:46,119 --> 00:17:47,919 Speaker 2: tech technicians, for sure. 370 00:17:48,240 --> 00:17:50,919 Speaker 1: I mean, those are you shoes to Phil There's no 371 00:17:51,000 --> 00:17:53,720 Speaker 1: question about it. And if I mentioned any of these things, 372 00:17:54,000 --> 00:17:57,040 Speaker 1: any of his rules to follow my research notes, it's 373 00:17:57,119 --> 00:18:00,240 Speaker 1: like my readership doubles, you know what I mean, Like 374 00:18:00,280 --> 00:18:02,119 Speaker 1: forget about him. I mean, I mean, forget about me. 375 00:18:02,200 --> 00:18:03,880 Speaker 1: It's all about him, right, you know, I just kind 376 00:18:03,880 --> 00:18:06,840 Speaker 1: of have to invoke that presence, you know, in my job, 377 00:18:06,880 --> 00:18:09,600 Speaker 1: I guess because some financial advisors actually, when you know, 378 00:18:09,640 --> 00:18:12,679 Speaker 1: you see some of the commentary they write. The greatest 379 00:18:12,720 --> 00:18:15,720 Speaker 1: compliment I think they ever paid me was he he 380 00:18:15,840 --> 00:18:19,720 Speaker 1: invokes Bob Farrell pretty well. And I know that's not 381 00:18:20,040 --> 00:18:23,399 Speaker 1: one true because nobody can do that, But just to 382 00:18:23,440 --> 00:18:27,000 Speaker 1: have half of that, I think is is a compliment. 383 00:18:27,080 --> 00:18:31,280 Speaker 2: That's great. What other technicians do you admire? Who else 384 00:18:31,320 --> 00:18:34,359 Speaker 2: in the business do you think does a nice job? 385 00:18:35,040 --> 00:18:36,800 Speaker 1: I mean, look, I mean, I you know, I obviously 386 00:18:36,840 --> 00:18:38,879 Speaker 1: I compete with a lot of guys that do good work. 387 00:18:38,920 --> 00:18:42,359 Speaker 1: But going back to the day, some of the folks 388 00:18:42,359 --> 00:18:45,719 Speaker 1: that have influenced my work influenced my work the most, 389 00:18:46,160 --> 00:18:51,600 Speaker 1: I would say initially was John Murphy with the book. 390 00:18:51,640 --> 00:18:54,400 Speaker 1: I mean, I have the torn up, dog eared book, 391 00:18:54,520 --> 00:18:57,399 Speaker 1: you know, Technical Analysis of the Futures Market. You know 392 00:18:57,440 --> 00:18:59,840 Speaker 1: that was you know now it's called Technical Analysis of Financials. 393 00:19:00,280 --> 00:19:02,440 Speaker 1: So I got an old, dog eared copy at my desk. Still, 394 00:19:03,680 --> 00:19:05,760 Speaker 1: I would say Martin Praying I learned a lot from, 395 00:19:05,840 --> 00:19:08,879 Speaker 1: you know, through his pray, oh really, and you know, 396 00:19:08,920 --> 00:19:11,920 Speaker 1: some good cycle stuff there. Momentum. I got his book 397 00:19:11,960 --> 00:19:17,439 Speaker 1: on Momentum, which which I found very useful. And I 398 00:19:17,440 --> 00:19:20,440 Speaker 1: guess a third one I think that that impacted me 399 00:19:20,560 --> 00:19:24,080 Speaker 1: quite a bit was doctor Alexander Elder, who wrote Trading 400 00:19:24,080 --> 00:19:27,919 Speaker 1: for a Living, and what I liked about that was 401 00:19:28,080 --> 00:19:31,400 Speaker 1: a there's a lot of market psychology, investor psychology in there, 402 00:19:31,440 --> 00:19:35,480 Speaker 1: but also how to run a you know, trading systems 403 00:19:35,480 --> 00:19:37,760 Speaker 1: based on indicators. And I think that helped me out 404 00:19:37,760 --> 00:19:42,080 Speaker 1: a lot. And much of in that book has influenced 405 00:19:42,119 --> 00:19:46,280 Speaker 1: the way I thought about markets and picking stocks, you know, 406 00:19:46,400 --> 00:19:48,919 Speaker 1: as the equity technician, that's kind of what I need 407 00:19:48,960 --> 00:19:50,639 Speaker 1: to do is identify stocks that I think can go 408 00:19:50,720 --> 00:19:54,240 Speaker 1: up or down or at a minimum, you know, underperform 409 00:19:54,359 --> 00:19:57,000 Speaker 1: or outperform. And you know, I use some of the 410 00:19:57,040 --> 00:19:58,800 Speaker 1: techniques that he put in there, in particular, like a 411 00:19:58,800 --> 00:20:02,760 Speaker 1: triple screen trading system where you have your your you know, 412 00:20:02,760 --> 00:20:05,600 Speaker 1: your weekly time frame, but you you make your decisions 413 00:20:05,640 --> 00:20:08,040 Speaker 1: off the daily. But I managed to do it all 414 00:20:08,080 --> 00:20:10,080 Speaker 1: on a weekly chart because if you put three different 415 00:20:10,080 --> 00:20:12,040 Speaker 1: movement averages on a weekly chart, you can look at, 416 00:20:12,119 --> 00:20:14,360 Speaker 1: you know, a long term moving average and a short 417 00:20:14,400 --> 00:20:16,439 Speaker 1: term moving average and do it that way. You know, 418 00:20:16,480 --> 00:20:18,960 Speaker 1: where you decline below the shorter term one and hold 419 00:20:18,960 --> 00:20:22,320 Speaker 1: the longer term one. I generally can I generally view 420 00:20:22,359 --> 00:20:24,040 Speaker 1: that as a positive for a stock and look to 421 00:20:24,080 --> 00:20:24,440 Speaker 1: buy it. 422 00:20:24,520 --> 00:20:27,440 Speaker 2: So you're mentioning folks who've been around a while, like 423 00:20:27,560 --> 00:20:32,320 Speaker 2: John Murphy and Praying and Farrell and I took the 424 00:20:32,320 --> 00:20:35,520 Speaker 2: class with Ralph Akmpora. I know a lot of people 425 00:20:35,640 --> 00:20:39,200 Speaker 2: back in the day who used to do their charts 426 00:20:39,680 --> 00:20:45,840 Speaker 2: by hands every day, and now there's just so much 427 00:20:46,200 --> 00:20:53,080 Speaker 2: computing power around. How has the computerization of everything change 428 00:20:53,119 --> 00:20:56,920 Speaker 2: technical analysis? What do we do with all this horse power? 429 00:20:57,200 --> 00:21:00,920 Speaker 1: Well, I mean it definitely can allow for more rules 430 00:21:00,920 --> 00:21:04,440 Speaker 1: based signals. In some regard, it allows us to do 431 00:21:04,520 --> 00:21:09,760 Speaker 1: things with a greater universus stocks, and I think, I 432 00:21:09,800 --> 00:21:12,639 Speaker 1: think it is useful to have that. But when I 433 00:21:12,720 --> 00:21:15,320 Speaker 1: first join Merrill Inch in two thousand and seven, we 434 00:21:15,320 --> 00:21:17,440 Speaker 1: were still we still had point and figure charge that 435 00:21:17,440 --> 00:21:20,280 Speaker 1: we were updating by hand x's and o's. 436 00:21:20,400 --> 00:21:22,760 Speaker 2: You know, of course, Tom Dorsey, that crowd. 437 00:21:22,760 --> 00:21:25,240 Speaker 1: Yeah, I mean they they, I mean they, yeah, Tom Dorsey. 438 00:21:25,320 --> 00:21:28,240 Speaker 1: I believe investment intelligence also has a product on point 439 00:21:28,240 --> 00:21:32,119 Speaker 1: and figure I mean, very popular among the financial busor crowd, 440 00:21:32,160 --> 00:21:35,399 Speaker 1: but not so popular among the institutional crowd. You know, 441 00:21:35,480 --> 00:21:37,480 Speaker 1: the intuitional crowd probably looks at It's like I'm looking 442 00:21:37,480 --> 00:21:39,119 Speaker 1: at a letter from my grandmother with the x's and 443 00:21:39,160 --> 00:21:40,560 Speaker 1: o's on it, you know, and she gives me. 444 00:21:40,640 --> 00:21:43,000 Speaker 2: Huggs, and it's at precise. It's not as. 445 00:21:44,520 --> 00:21:45,440 Speaker 1: I mean, it depends. 446 00:21:46,080 --> 00:21:49,479 Speaker 2: It seems to be more general than I mean. 447 00:21:49,520 --> 00:21:51,320 Speaker 1: You can make it more precise if you want to, 448 00:21:51,400 --> 00:21:54,000 Speaker 1: but that requires a lot more effort and work, and 449 00:21:54,080 --> 00:21:55,639 Speaker 1: you know, with the computing power and a day, I 450 00:21:55,680 --> 00:21:57,800 Speaker 1: think the one thing that's changed is, you know a 451 00:21:57,800 --> 00:21:59,600 Speaker 1: lot of people can think they can pull up at 452 00:21:59,600 --> 00:22:01,600 Speaker 1: Bloomberg and all of a sudden call themselves a technical 453 00:22:01,600 --> 00:22:04,440 Speaker 1: analyst because it's just very easy to create these things. 454 00:22:04,640 --> 00:22:07,560 Speaker 2: I'm glad you brought that up because I recall when 455 00:22:07,600 --> 00:22:10,639 Speaker 2: I started on a desk in the nineties, if you 456 00:22:10,760 --> 00:22:15,520 Speaker 2: wanted to put charts on a computer screen, you had 457 00:22:15,520 --> 00:22:21,040 Speaker 2: to subscribe to a very specific package, even the terminal. 458 00:22:21,080 --> 00:22:23,520 Speaker 2: Back then, you couldn't do what you could do. Today's 459 00:22:23,760 --> 00:22:26,879 Speaker 2: light years ahead today kind of Now you go to 460 00:22:26,920 --> 00:22:31,080 Speaker 2: any website and have unbelievable access to all sorts of 461 00:22:31,560 --> 00:22:37,240 Speaker 2: technical studies. I'm curious what sort of impact does charting 462 00:22:37,320 --> 00:22:41,960 Speaker 2: software for free everywhere have on the practice of technical analysis. 463 00:22:42,160 --> 00:22:44,359 Speaker 1: Well, I mean it's again, it's still a market where 464 00:22:44,400 --> 00:22:47,960 Speaker 1: people will you know, trade and you know, make decisions 465 00:22:47,960 --> 00:22:50,159 Speaker 1: to buy and sell. I mean I do look at 466 00:22:50,200 --> 00:22:52,240 Speaker 1: stock charts dot com. I mean when I'm on the road, 467 00:22:52,280 --> 00:22:56,000 Speaker 1: that's very easy to pull up and work with. I mean, 468 00:22:56,080 --> 00:22:58,639 Speaker 1: does it make it more of a self fulfilling prophecy? 469 00:22:59,400 --> 00:23:02,800 Speaker 1: Who knows? I mean, but I think the general it doesn't. 470 00:23:02,960 --> 00:23:06,639 Speaker 1: It wouldn't negate. You know, the one major thing that 471 00:23:06,680 --> 00:23:09,879 Speaker 1: dominates financial markets, it's fear and greed, you know, and 472 00:23:09,920 --> 00:23:13,159 Speaker 1: maybe it accelerates that process a little bit more. I 473 00:23:13,200 --> 00:23:15,400 Speaker 1: mean the other thing, it's really not just technical analysis, 474 00:23:15,400 --> 00:23:19,240 Speaker 1: but the availability information and instant analysis, right, you know, 475 00:23:19,280 --> 00:23:21,919 Speaker 1: analysis can be done. I mean, just let's face it, 476 00:23:21,920 --> 00:23:25,040 Speaker 1: there's there's businesses built on that premise where you know, 477 00:23:25,040 --> 00:23:27,920 Speaker 1: they have high frequency trading where they calculate things and 478 00:23:28,800 --> 00:23:30,600 Speaker 1: you know, millisecond I don't even know, but you know 479 00:23:30,640 --> 00:23:31,080 Speaker 1: what I mean. 480 00:23:31,000 --> 00:23:33,680 Speaker 2: It's like really fantantly. 481 00:23:33,760 --> 00:23:36,560 Speaker 1: Yeah. Probably the more accurate way of saying that nanoseconds. 482 00:23:36,600 --> 00:23:39,399 Speaker 1: So I mean it just makes things very quickly, and 483 00:23:39,440 --> 00:23:42,720 Speaker 1: you know how I adapt it to it. I focus 484 00:23:42,800 --> 00:23:46,360 Speaker 1: more on a long term timeframe, not not like monthly, 485 00:23:46,400 --> 00:23:48,960 Speaker 1: but weekly. I you know that daily gets a bit noisy, 486 00:23:49,119 --> 00:23:51,439 Speaker 1: very noisy. Back in the day, it was inter day 487 00:23:51,520 --> 00:23:53,760 Speaker 1: charts that got really noisy. But now daily charts have 488 00:23:53,800 --> 00:23:57,240 Speaker 1: gotten noisy. You know. I hope weekly charts don't get noisy, 489 00:23:57,240 --> 00:23:59,160 Speaker 1: because that would complicate things even more. 490 00:23:59,359 --> 00:24:04,200 Speaker 2: I'm curious if the zero day options that expire every 491 00:24:04,240 --> 00:24:07,399 Speaker 2: single day have an impact on trading and have an 492 00:24:07,440 --> 00:24:08,520 Speaker 2: impact on charts. 493 00:24:09,000 --> 00:24:11,919 Speaker 1: Probably, you know, I'm not sure what the impact exactly is, 494 00:24:12,000 --> 00:24:16,560 Speaker 1: but but yeah, I mean I think just instant you know, 495 00:24:16,960 --> 00:24:19,800 Speaker 1: you know, instant what you know, whatever the term is, 496 00:24:19,800 --> 00:24:23,760 Speaker 1: I can't even know, but just instant information. I mean, 497 00:24:23,760 --> 00:24:27,040 Speaker 1: it just it just makes things more volable. Generally speaking, 498 00:24:27,080 --> 00:24:29,159 Speaker 1: you wouldn't know by looking at the fix, but it 499 00:24:29,240 --> 00:24:31,800 Speaker 1: looks like inter day price action, day by day price action. 500 00:24:31,840 --> 00:24:34,919 Speaker 1: It's like you got stocks that have multi billion market 501 00:24:34,920 --> 00:24:37,600 Speaker 1: caps that are moving like two to three percent, you know, 502 00:24:37,680 --> 00:24:39,920 Speaker 1: within the span of fifteen minutes. I mean, that's that's 503 00:24:39,960 --> 00:24:40,919 Speaker 1: that's a lot, you know. 504 00:24:41,240 --> 00:24:44,359 Speaker 2: I mean, you mentioned fear and greed, tell us a 505 00:24:44,400 --> 00:24:48,480 Speaker 2: little bit about how you can use technical analysis to 506 00:24:48,720 --> 00:24:50,320 Speaker 2: look at sentiment. 507 00:24:51,080 --> 00:24:54,360 Speaker 1: Yep, so a lot of different ways. First and foremost, 508 00:24:54,400 --> 00:24:56,800 Speaker 1: I mean, you got the surveys that we talked about earlier, 509 00:24:56,880 --> 00:24:58,679 Speaker 1: got the book call Ratios, you got the bill. 510 00:24:58,800 --> 00:25:00,760 Speaker 2: Let me interrupt you and ask you about the surveys 511 00:25:00,800 --> 00:25:04,399 Speaker 2: because I always find that what people say they're doing 512 00:25:04,680 --> 00:25:07,720 Speaker 2: and what they're actually doing on those surveys don't always 513 00:25:07,760 --> 00:25:12,160 Speaker 2: seem to line up right how how and they seem 514 00:25:12,240 --> 00:25:14,560 Speaker 2: to spend most of their time in a sort of 515 00:25:14,600 --> 00:25:18,960 Speaker 2: nomend's zone where there's no signal. It's at the extremes 516 00:25:19,280 --> 00:25:23,440 Speaker 2: when they're useful. How How useful do you find sentiment 517 00:25:23,480 --> 00:25:27,000 Speaker 2: surveys generally where we're asking people how bullsh are you? 518 00:25:27,320 --> 00:25:29,159 Speaker 2: How much equities do you have, how much bonds do 519 00:25:29,160 --> 00:25:29,840 Speaker 2: you have, et cetera. 520 00:25:30,640 --> 00:25:34,879 Speaker 1: I would say it's more useful in calling lows and 521 00:25:35,080 --> 00:25:37,280 Speaker 1: it is in highs because when you think about a 522 00:25:37,359 --> 00:25:40,000 Speaker 1: low in the market and fear in the market, there's 523 00:25:40,040 --> 00:25:44,120 Speaker 1: more urgency. Complacency by definition is not urgent. So that's 524 00:25:44,160 --> 00:25:48,320 Speaker 1: why I think that sentiment surveys work better when you 525 00:25:48,359 --> 00:25:51,040 Speaker 1: know bear surge about fifty five sixty percent, which is 526 00:25:51,080 --> 00:25:53,280 Speaker 1: where they stood September of last year. 527 00:25:53,560 --> 00:25:58,359 Speaker 2: You know, complacency is not urgent, It's not that's that's 528 00:25:58,359 --> 00:25:59,240 Speaker 2: a great sentence. 529 00:25:59,400 --> 00:25:59,600 Speaker 1: Yeah. 530 00:25:59,640 --> 00:26:02,119 Speaker 2: I always think of it as it's hard to identify 531 00:26:02,200 --> 00:26:05,639 Speaker 2: when people kind of get bored and stop buying. But 532 00:26:05,760 --> 00:26:08,480 Speaker 2: it's easy to see when everybody's panics sell exactly. 533 00:26:08,840 --> 00:26:11,240 Speaker 1: That's what sentiment shows you. Uh, you see it on 534 00:26:11,240 --> 00:26:15,160 Speaker 1: the book calls. You can see it also in futures positioning. 535 00:26:16,080 --> 00:26:18,520 Speaker 2: H what what are you looking at in futures positioning 536 00:26:18,600 --> 00:26:20,960 Speaker 2: in order to identify a bottom? 537 00:26:21,320 --> 00:26:26,120 Speaker 1: It's it's usually it is aggressive shorts from leverage funds 538 00:26:26,200 --> 00:26:27,240 Speaker 1: on SMP futures. 539 00:26:28,119 --> 00:26:32,520 Speaker 2: And are these professionals or these punters and amateurs. 540 00:26:32,600 --> 00:26:36,240 Speaker 1: No, they're professional. They're professional. But even professionals can form 541 00:26:36,240 --> 00:26:38,040 Speaker 1: a crowd and a hurd. I mean, that's that's the 542 00:26:38,080 --> 00:26:42,040 Speaker 1: point of the indicator. You know, that's the reason why 543 00:26:42,119 --> 00:26:44,400 Speaker 1: you know there's a hedge funk. You know, clients that 544 00:26:44,400 --> 00:26:46,679 Speaker 1: that you visit outside New York City they want to 545 00:26:46,880 --> 00:26:50,840 Speaker 1: you know, avoid the herd. Right. But the other factor 546 00:26:50,960 --> 00:26:54,040 Speaker 1: is asset manager positioning. Those are the smarter I think 547 00:26:54,080 --> 00:26:56,680 Speaker 1: I view them as smarter. So when they're over sold, 548 00:26:56,720 --> 00:27:01,480 Speaker 1: the market's usually down as well, but when the market 549 00:27:01,520 --> 00:27:05,000 Speaker 1: starts to bounce, they start to go with it, and 550 00:27:05,160 --> 00:27:07,480 Speaker 1: you know, they hit their lows two of them last year, 551 00:27:07,560 --> 00:27:11,679 Speaker 1: one in June and one October, and it was great. 552 00:27:11,720 --> 00:27:15,000 Speaker 1: It worked out really well using that sentiment indicator, So 553 00:27:16,160 --> 00:27:19,000 Speaker 1: I think there is still use for them, I will admit, 554 00:27:19,080 --> 00:27:23,639 Speaker 1: though sometimes I do wonder whether sentiment, you know, becomes 555 00:27:23,800 --> 00:27:26,520 Speaker 1: more of a momentum indicator, which which I think makes 556 00:27:26,560 --> 00:27:29,840 Speaker 1: sense because let's face it, I mean, if the market 557 00:27:29,920 --> 00:27:33,280 Speaker 1: rallies fifteen percent and the asset matters are still here 558 00:27:33,800 --> 00:27:37,760 Speaker 1: and not buying the rally, then something else is happening, 559 00:27:38,200 --> 00:27:42,160 Speaker 1: you know, So sentiment does need to turn into momentum, 560 00:27:42,320 --> 00:27:45,680 Speaker 1: meaning that sentiment needs to start to confirm price action. 561 00:27:46,880 --> 00:27:51,600 Speaker 2: Can can everything be charted? I mean we're talking about sentiment, 562 00:27:51,640 --> 00:27:54,679 Speaker 2: we're talking about trend What about things like fundamentals? Can 563 00:27:54,760 --> 00:27:58,520 Speaker 2: you chart the rate of change on earnings? Where do 564 00:27:58,560 --> 00:28:00,920 Speaker 2: you draw the line of Hey, technicals aren't going to 565 00:28:01,000 --> 00:28:01,480 Speaker 2: help you there? 566 00:28:02,119 --> 00:28:04,280 Speaker 1: No, I'm sure you can. I mean I haven't done 567 00:28:04,359 --> 00:28:06,600 Speaker 1: that much work. I mean, you know, a pe ratio 568 00:28:06,680 --> 00:28:08,600 Speaker 1: you can chart that, I mean pretty easily and do 569 00:28:08,640 --> 00:28:13,159 Speaker 1: analysis on that. I think I think it's probably more 570 00:28:13,240 --> 00:28:19,840 Speaker 1: useful in economic indicators like the unemployment rate or the 571 00:28:21,320 --> 00:28:26,040 Speaker 1: claims data. And you know, we actually did some scenario 572 00:28:26,119 --> 00:28:29,159 Speaker 1: analysis around that recently, just talking about, hey, what happens 573 00:28:29,200 --> 00:28:32,199 Speaker 1: if the employment rate rises versus falls? What environments does 574 00:28:32,240 --> 00:28:34,679 Speaker 1: the SMP work better in? And you know the obvious 575 00:28:34,720 --> 00:28:37,840 Speaker 1: the answer is the obvious answer, right, So, but it's 576 00:28:37,880 --> 00:28:40,240 Speaker 1: not necessarily true because there's some periods of time where 577 00:28:40,240 --> 00:28:45,080 Speaker 1: the unemployment rate does rise where the SMP actually does rally, 578 00:28:45,800 --> 00:28:48,000 Speaker 1: and there's other peerogs where the SMP does not. And 579 00:28:48,040 --> 00:28:50,720 Speaker 1: I really you know, it's it depends on what your 580 00:28:50,760 --> 00:28:51,480 Speaker 1: market tide is. 581 00:28:51,800 --> 00:28:54,600 Speaker 2: How do you think about intermarket analysis? So you're looking 582 00:28:54,640 --> 00:28:57,320 Speaker 2: at the stock market is doing this relative to what 583 00:28:57,360 --> 00:29:01,000 Speaker 2: the bond market is doing? How important are looking across 584 00:29:01,040 --> 00:29:03,880 Speaker 2: different Here's what the US is doing, Here's what's developed 585 00:29:03,960 --> 00:29:06,480 Speaker 2: x US, Here's what emerging markets are doing. How do 586 00:29:06,520 --> 00:29:11,280 Speaker 2: you consider different geographies, different sort of asset classes? Do 587 00:29:11,360 --> 00:29:13,040 Speaker 2: they do they interrelated? All? 588 00:29:13,640 --> 00:29:15,280 Speaker 1: I mean I think they do. I think we've seen 589 00:29:15,320 --> 00:29:19,920 Speaker 1: that over the last year or so. So so here's 590 00:29:20,000 --> 00:29:22,480 Speaker 1: here's a whay I'm looking at it in your term 591 00:29:22,520 --> 00:29:25,000 Speaker 1: not not making any sort of forecast or anything like that. 592 00:29:25,080 --> 00:29:28,719 Speaker 1: But last year where we stood, market was very nervous. 593 00:29:28,800 --> 00:29:31,840 Speaker 1: SMP around the two hundred week moving average finally started 594 00:29:31,840 --> 00:29:34,800 Speaker 1: bottoming out. But what was the ingredient to get that 595 00:29:34,960 --> 00:29:38,000 Speaker 1: low in the market. It was the. 596 00:29:38,000 --> 00:29:39,840 Speaker 2: Dollar topping peak inflation. 597 00:29:40,480 --> 00:29:42,400 Speaker 1: Yeah, that that, Yeah, that happened I believe in June 598 00:29:42,400 --> 00:29:46,480 Speaker 1: of last right, right, and that that's helpful. Also yields 599 00:29:46,520 --> 00:29:49,880 Speaker 1: topping out as well in September October last year. So 600 00:29:50,400 --> 00:29:56,280 Speaker 1: there's a negative correlation between the dollars and between stocks. 601 00:29:57,560 --> 00:30:01,320 Speaker 1: The dollar in bonds, so meaning you know, higher interest rate, 602 00:30:01,520 --> 00:30:04,400 Speaker 1: lower stocks, higher dollar lower stocks. That's been the trend. 603 00:30:04,440 --> 00:30:07,640 Speaker 1: So the SMP rally from last October ran into trouble 604 00:30:07,680 --> 00:30:10,560 Speaker 1: this summer, you know, and you know which is where 605 00:30:10,560 --> 00:30:13,360 Speaker 1: in the dollar bottomed out and yields started to really 606 00:30:13,480 --> 00:30:15,840 Speaker 1: rise again in earnest and now here we are. 607 00:30:15,920 --> 00:30:19,240 Speaker 2: Oh god, it was a massive surgeon yields from August 608 00:30:19,240 --> 00:30:22,440 Speaker 2: September October and stocks one's the exact opposite direction. 609 00:30:22,600 --> 00:30:25,440 Speaker 1: Yeah, have had a ten percent correction, and you know, 610 00:30:25,440 --> 00:30:27,800 Speaker 1: we'll see what happens going forward. But I would think, 611 00:30:28,280 --> 00:30:30,240 Speaker 1: you know, not that this is a prediction or anything, 612 00:30:30,280 --> 00:30:33,920 Speaker 1: but if that correlation holds, and if the S and 613 00:30:34,000 --> 00:30:36,880 Speaker 1: P gets a seasonal bounce, which normally is something that 614 00:30:36,920 --> 00:30:39,920 Speaker 1: happens around this time of year, one would think that 615 00:30:40,000 --> 00:30:43,520 Speaker 1: if this correlation continues to hold, that a seasonal bounce 616 00:30:43,560 --> 00:30:48,280 Speaker 1: for stocks likely requires yields to be stable to lower 617 00:30:49,080 --> 00:30:53,640 Speaker 1: or the dollar stable to lower. And you know, we'll 618 00:30:53,640 --> 00:30:55,440 Speaker 1: see how that plays out. But that seems to be 619 00:30:55,480 --> 00:30:58,680 Speaker 1: the correlation, the innermarket correlation that that seems to be, 620 00:30:59,040 --> 00:31:00,960 Speaker 1: in my mind, the most important one right now. 621 00:31:01,440 --> 00:31:04,440 Speaker 2: So what do you think generally people misunderstand about texting? 622 00:31:04,560 --> 00:31:06,360 Speaker 1: Yeah, I mean I think I mean sometimes I get 623 00:31:06,400 --> 00:31:08,560 Speaker 1: emails where they think I'm like a you know, a 624 00:31:08,640 --> 00:31:10,600 Speaker 1: magician trying to pull a rabbit out of a hat. 625 00:31:10,640 --> 00:31:13,080 Speaker 1: You know, they're asking for something technically didn't do right, 626 00:31:13,120 --> 00:31:15,400 Speaker 1: you know what I mean. They're like, they're you know, 627 00:31:15,560 --> 00:31:16,840 Speaker 1: I mean, look, I mean, if you give them a 628 00:31:16,840 --> 00:31:18,760 Speaker 1: few good calls, they think you can predict the future, 629 00:31:18,760 --> 00:31:21,200 Speaker 1: but we can't. You know, we're just gauging risk and reward. 630 00:31:21,640 --> 00:31:22,560 Speaker 1: And I think that's. 631 00:31:22,400 --> 00:31:25,520 Speaker 2: What's a really good way to express that. You're looking 632 00:31:25,560 --> 00:31:29,840 Speaker 2: at various patterns and setups to identify your best risk 633 00:31:29,920 --> 00:31:30,720 Speaker 2: reward set. 634 00:31:30,960 --> 00:31:33,800 Speaker 1: And I think that's a big misunderstanding because most people 635 00:31:34,040 --> 00:31:36,920 Speaker 1: are of the mentality in the DraftKings world that you know, 636 00:31:37,000 --> 00:31:39,800 Speaker 1: technical analysis is a good way to enhance their gambling habit, 637 00:31:40,120 --> 00:31:42,800 Speaker 1: you know, But what we're really looking to do is 638 00:31:42,960 --> 00:31:45,760 Speaker 1: manageer's reward. I mean, you know, I always tell like 639 00:31:45,880 --> 00:31:48,840 Speaker 1: hedge fund clients when I'm talking to them, you know, 640 00:31:48,920 --> 00:31:50,760 Speaker 1: they're I mean a lot of them along short. But 641 00:31:50,800 --> 00:31:53,520 Speaker 1: they're like, I'm like, here's how you identify. Here's how 642 00:31:53,600 --> 00:31:57,200 Speaker 1: I would identify a corelong. You first and foremost, you 643 00:31:57,240 --> 00:31:59,720 Speaker 1: identify what your benchmark is. How are you measuring your 644 00:31:59,760 --> 00:32:02,640 Speaker 1: before ormans? And you take your absolute price, and if 645 00:32:02,680 --> 00:32:05,240 Speaker 1: the absolute price is trending up along with the relative price, 646 00:32:05,520 --> 00:32:07,280 Speaker 1: that's where you look for core lungs. And if it 647 00:32:07,320 --> 00:32:10,320 Speaker 1: got good fundamentals there even better on this other side, 648 00:32:10,480 --> 00:32:13,400 Speaker 1: you know, weak relative weak absolute, that's where you get. 649 00:32:13,400 --> 00:32:15,400 Speaker 1: You call it core shorts. And I tell them, like, 650 00:32:15,440 --> 00:32:17,960 Speaker 1: you know, where it becomes really interesting is when you 651 00:32:18,000 --> 00:32:19,800 Speaker 1: have a stock that's been trending up for a while, 652 00:32:19,840 --> 00:32:22,560 Speaker 1: but all of a sudden, the relative ratio starts lagging, 653 00:32:22,640 --> 00:32:24,840 Speaker 1: meaning that if I'm a fund manager, at the end 654 00:32:24,840 --> 00:32:27,000 Speaker 1: of the quarter, oh my god, you know, Apple's up 655 00:32:27,040 --> 00:32:30,440 Speaker 1: fifteen percent. Oh wait, but the market's up twenty I'm lagging, 656 00:32:30,720 --> 00:32:32,200 Speaker 1: you know. Then they kick that out of the beforeil 657 00:32:32,200 --> 00:32:34,360 Speaker 1: and guess what happens. You know, the stock starts the 658 00:32:34,400 --> 00:32:37,120 Speaker 1: former top because of selling pressure and the same thing 659 00:32:37,160 --> 00:32:39,240 Speaker 1: on the other side. So it's like you and. 660 00:32:39,240 --> 00:32:42,400 Speaker 2: To be to clarify, you're not saying this about Apple, No, no, 661 00:32:42,440 --> 00:32:44,640 Speaker 2: you're just using as a example as. 662 00:32:44,520 --> 00:32:46,920 Speaker 1: An example, not not talking about Apple or a prediction 663 00:32:46,960 --> 00:32:50,160 Speaker 1: there at all. But you know what I'm saying is 664 00:32:50,160 --> 00:32:55,000 Speaker 1: it's like you can find a time using technical analysis 665 00:32:55,040 --> 00:32:57,720 Speaker 1: to say, you know what, I've been bullish this stock, 666 00:32:58,360 --> 00:33:01,080 Speaker 1: but it's starting to lag the market. Maybe it's time 667 00:33:01,120 --> 00:33:04,120 Speaker 1: for me to revisit my fundamental thesis. And that's and 668 00:33:04,120 --> 00:33:07,200 Speaker 1: that's good, that's useful information to somebody, because what I've 669 00:33:07,240 --> 00:33:11,280 Speaker 1: noticed is when a stock and an ups trend starts 670 00:33:11,400 --> 00:33:15,120 Speaker 1: underperforming the market, guess what they I mean, I haven't 671 00:33:15,160 --> 00:33:17,280 Speaker 1: tested this yet, but the theory is. And if I 672 00:33:17,280 --> 00:33:20,920 Speaker 1: test the hypothesis and the theory and this theory works, 673 00:33:20,960 --> 00:33:25,800 Speaker 1: the theory is a weakening relative often precedes fundamental information 674 00:33:25,960 --> 00:33:29,160 Speaker 1: that's less bullish than people expect. And I've seen it 675 00:33:29,200 --> 00:33:31,480 Speaker 1: happen a lot. And on the other side too, a 676 00:33:31,560 --> 00:33:34,200 Speaker 1: stock trending down all of a sudden, the relative ratio 677 00:33:34,280 --> 00:33:36,040 Speaker 1: is starting to improve. In fact, I mean this is 678 00:33:36,080 --> 00:33:39,120 Speaker 1: the environment now with the market correcting, where you look 679 00:33:39,120 --> 00:33:41,840 Speaker 1: for names like that, you know, where the relative charts improving, 680 00:33:41,880 --> 00:33:43,959 Speaker 1: meaning that, oh my gosh, you know the SMP's corrected 681 00:33:43,960 --> 00:33:46,600 Speaker 1: ten percent, this stop's only down five All right, why 682 00:33:46,680 --> 00:33:48,959 Speaker 1: is that? Is there something going on? Fundamentally I need 683 00:33:49,000 --> 00:33:51,280 Speaker 1: to look into And that's and that gets you know, 684 00:33:51,320 --> 00:33:54,160 Speaker 1: the fundamental analysts thinking. And if I was doing more 685 00:33:54,200 --> 00:33:55,840 Speaker 1: fundamental work, it would tell me, all right, I really 686 00:33:55,880 --> 00:33:57,600 Speaker 1: got to look at these companies to see, hey, what's 687 00:33:57,640 --> 00:34:00,160 Speaker 1: going on or estimates coming up? Or are the revision 688 00:34:00,280 --> 00:34:03,280 Speaker 1: improving or you know what I mean. So, and I 689 00:34:03,280 --> 00:34:06,480 Speaker 1: think that's how not only not only a good way 690 00:34:06,480 --> 00:34:09,160 Speaker 1: a to interact with some of the institutional client base, 691 00:34:09,239 --> 00:34:12,120 Speaker 1: but also and private client base as well, but also 692 00:34:12,239 --> 00:34:18,040 Speaker 1: just as a process because technical analysis is nothing, you know, 693 00:34:18,200 --> 00:34:21,600 Speaker 1: without fundamentals. I mean technical analysis somebody once coined it 694 00:34:21,719 --> 00:34:24,680 Speaker 1: lazy man's fundamental work, you know, and. 695 00:34:24,719 --> 00:34:27,560 Speaker 2: Free writing on other people's number crunch. 696 00:34:27,440 --> 00:34:29,440 Speaker 1: Because think about it. I mean, you know, if it 697 00:34:29,480 --> 00:34:33,040 Speaker 1: stocks rallying, it's doing it for a fundamental reason most 698 00:34:33,040 --> 00:34:33,600 Speaker 1: of the time. 699 00:34:33,840 --> 00:34:35,319 Speaker 2: I mean, and you may not know what it is, 700 00:34:35,520 --> 00:34:38,320 Speaker 2: but you can identify the footprints in the charts. 701 00:34:38,400 --> 00:34:39,839 Speaker 1: I mean, think about where we were a year ago. 702 00:34:39,880 --> 00:34:42,279 Speaker 1: One hundred percent of economists calling for recession in the 703 00:34:42,280 --> 00:34:43,279 Speaker 1: market rallies. 704 00:34:43,280 --> 00:34:46,240 Speaker 2: Two years, right, I mean, that's been ongoing, the calls 705 00:34:46,280 --> 00:34:46,880 Speaker 2: for recession. 706 00:34:46,960 --> 00:34:49,160 Speaker 1: And guess what I mean. Guess when the markets started correcting, 707 00:34:49,239 --> 00:34:51,279 Speaker 1: when people started taking those calls off the table and 708 00:34:51,320 --> 00:34:55,040 Speaker 1: calling for a soft landing. So, you know, as as 709 00:34:55,080 --> 00:34:58,040 Speaker 1: the market was rallying, it was telling us something, and 710 00:34:58,080 --> 00:35:00,960 Speaker 1: then as soon as the economists start confirming what it 711 00:35:01,040 --> 00:35:03,359 Speaker 1: was telling us, that's when it correct it. So now 712 00:35:03,400 --> 00:35:06,000 Speaker 1: we need to see what event that we're discounting now 713 00:35:06,360 --> 00:35:09,800 Speaker 1: and hopefully eventually, you know, we discounted completely and things 714 00:35:09,800 --> 00:35:11,120 Speaker 1: can get a little bit better. 715 00:35:11,280 --> 00:35:14,600 Speaker 2: Huh. Really interesting. Let's talk a little bit about what's 716 00:35:14,640 --> 00:35:17,560 Speaker 2: going on in the current market environment. We're recording this 717 00:35:18,040 --> 00:35:22,040 Speaker 2: Halloween twenty twenty three. Where are we today? Are we 718 00:35:22,080 --> 00:35:24,719 Speaker 2: in a secular bull market or bear market? Are we 719 00:35:24,760 --> 00:35:27,799 Speaker 2: in a cyclical bull or bear? What's the state of 720 00:35:28,000 --> 00:35:30,880 Speaker 2: equity markets and bond markets today. 721 00:35:31,800 --> 00:35:35,720 Speaker 1: Well, I mean, I keep it simple with those sort 722 00:35:35,719 --> 00:35:40,080 Speaker 1: of trends. So whenever we go on television, we always 723 00:35:40,080 --> 00:35:42,040 Speaker 1: pull up the same chart S and P. Five hundred 724 00:35:42,160 --> 00:35:44,680 Speaker 1: with a forty week moving average and a two hundred 725 00:35:44,680 --> 00:35:47,319 Speaker 1: week moving average. The forty week moving average for those 726 00:35:47,360 --> 00:35:49,719 Speaker 1: who look more at daily charts, can associate that with 727 00:35:49,760 --> 00:35:52,480 Speaker 1: a two hundred day moving average. So we gauge the 728 00:35:52,480 --> 00:35:55,720 Speaker 1: cyclical trend of the market using the forty week moving average, 729 00:35:56,239 --> 00:35:59,960 Speaker 1: and we gauge the secular trend as the two hundred 730 00:36:00,040 --> 00:36:03,279 Speaker 1: week moving average. So when you have a rising forty 731 00:36:03,280 --> 00:36:06,719 Speaker 1: week moving average, which we do now, and a rising 732 00:36:07,160 --> 00:36:10,480 Speaker 1: two hundred week moving average, which we do now, the 733 00:36:10,520 --> 00:36:14,560 Speaker 1: pattern is a cyclical uptrend or bowl market, and a 734 00:36:14,600 --> 00:36:18,160 Speaker 1: secular uptrender bowl market. Where are we now in the 735 00:36:18,160 --> 00:36:21,000 Speaker 1: context of that, Given the ten percent pullback that we've 736 00:36:21,000 --> 00:36:24,760 Speaker 1: gotten since the July highs, it is a correction of 737 00:36:24,840 --> 00:36:28,000 Speaker 1: that pattern. The we are below the forty week moving 738 00:36:28,040 --> 00:36:31,480 Speaker 1: average around forty two to fifty. So that's on the 739 00:36:32,040 --> 00:36:33,280 Speaker 1: that's on the S and P. Five hundred. 740 00:36:33,440 --> 00:36:37,160 Speaker 2: Yes, what about how does the NASDAK clock a little. 741 00:36:36,920 --> 00:36:40,399 Speaker 1: Stronger, stronger, stronger. Yeah, I mean, so when we look 742 00:36:40,440 --> 00:36:44,560 Speaker 1: at then the Nasdaq one hundred, for instance, it is 743 00:36:44,640 --> 00:36:47,160 Speaker 1: still I mean it just tested the forty week moving 744 00:36:47,239 --> 00:36:51,239 Speaker 1: average last week, so and well about the two hundred 745 00:36:51,239 --> 00:36:53,560 Speaker 1: week moving average, so still stronger. If you'll get relative 746 00:36:53,600 --> 00:36:57,600 Speaker 1: strength charts, you know, the the NASAK one hundred still 747 00:36:57,600 --> 00:37:01,359 Speaker 1: has a stronger pattern than the SMP at this stage. Technology, 748 00:37:01,440 --> 00:37:03,719 Speaker 1: you know, the sector itself a technology still has a 749 00:37:03,760 --> 00:37:08,120 Speaker 1: stronger relative chart patterns been sideways, but in a stronger trend. 750 00:37:09,000 --> 00:37:11,160 Speaker 1: And you know, you look at the r RG on 751 00:37:11,200 --> 00:37:12,840 Speaker 1: Bloomberg for instance. 752 00:37:13,120 --> 00:37:16,759 Speaker 2: Which is our lego yet, listeners, what what is that? 753 00:37:16,920 --> 00:37:18,239 Speaker 2: What does that show you? 754 00:37:18,320 --> 00:37:20,920 Speaker 1: Oh, it's a great it's a great it's a great tool. Actually, 755 00:37:21,000 --> 00:37:22,759 Speaker 1: I think I use it a lot in my work. 756 00:37:23,000 --> 00:37:24,080 Speaker 2: RRG stands for. 757 00:37:24,160 --> 00:37:28,239 Speaker 1: Relative rotation graph And what it's telling us now is 758 00:37:28,280 --> 00:37:33,120 Speaker 1: that some of the cyclical sectors, like financials, materials, industrials, 759 00:37:33,400 --> 00:37:36,600 Speaker 1: they had a chance to rotate into a bigger leadership 760 00:37:36,640 --> 00:37:40,800 Speaker 1: position and failed where and technology and discretionary and comm 761 00:37:40,840 --> 00:37:43,480 Speaker 1: services had a chance to rotate into a more bearish 762 00:37:43,880 --> 00:37:48,920 Speaker 1: leadership position and did not do that. So looking at that, 763 00:37:49,040 --> 00:37:51,719 Speaker 1: it's like you just got to think about what is 764 00:37:51,800 --> 00:37:56,239 Speaker 1: the risk here? You know, to investors that are, you know, 765 00:37:57,280 --> 00:38:01,200 Speaker 1: looking to get more part in the not participation, but 766 00:38:01,239 --> 00:38:03,800 Speaker 1: more outpha in the market from a greater number of stocks. 767 00:38:04,440 --> 00:38:06,720 Speaker 1: The risk is that doesn't happen. If this pattern holds, 768 00:38:06,760 --> 00:38:09,120 Speaker 1: the risk is that tech can continue to lead, comp 769 00:38:09,200 --> 00:38:13,120 Speaker 1: services continue to lead, and the cyclical sectors can continue 770 00:38:13,160 --> 00:38:15,560 Speaker 1: to lag since they weren't able to take on the 771 00:38:15,600 --> 00:38:20,000 Speaker 1: mantle of relative leadership in the relative rotation graph, so 772 00:38:20,440 --> 00:38:23,280 Speaker 1: they were not able to move into an upshrend, and. 773 00:38:23,400 --> 00:38:26,280 Speaker 2: So industrials have looked like they've been on the verge 774 00:38:26,320 --> 00:38:28,440 Speaker 2: for a while. They have, hasn't happened? 775 00:38:28,480 --> 00:38:29,080 Speaker 1: Hasn't happened. 776 00:38:29,120 --> 00:38:32,239 Speaker 2: On the other hand, same with financial same thing looks like, 777 00:38:32,400 --> 00:38:35,600 Speaker 2: oh now there's some spread. Financials can make more money. 778 00:38:35,960 --> 00:38:39,440 Speaker 2: Hasn't really happened. On the other hand, energy seems to 779 00:38:39,719 --> 00:38:42,920 Speaker 2: really be cleaning itself up. What's going on in the 780 00:38:43,040 --> 00:38:43,760 Speaker 2: oil sector? 781 00:38:43,880 --> 00:38:46,319 Speaker 1: Oh yeah, so that's that's the one cyclical sector that 782 00:38:46,440 --> 00:38:48,960 Speaker 1: has started to work. In fact, it does look an 783 00:38:49,000 --> 00:38:51,719 Speaker 1: awful lot like the pattern that we had for that 784 00:38:52,600 --> 00:38:58,400 Speaker 1: on a relative basis, meaning outperformance off the low relative 785 00:38:58,440 --> 00:39:01,840 Speaker 1: low from ninety eight to two thousand, and that relative 786 00:39:01,880 --> 00:39:02,919 Speaker 1: uptrend continued. 787 00:39:02,640 --> 00:39:06,200 Speaker 2: Ninety eight to two, Like we're looking back twenty five years, 788 00:39:06,239 --> 00:39:07,600 Speaker 2: twenty plus years. 789 00:39:07,480 --> 00:39:09,239 Speaker 1: And it was a similar pattern that we have now 790 00:39:09,280 --> 00:39:11,800 Speaker 1: and it's it's maybe a third of the way through it. Wow, 791 00:39:13,040 --> 00:39:15,840 Speaker 1: because that if that continues, you know, energy should be 792 00:39:15,880 --> 00:39:20,960 Speaker 1: able to outperform if history rhymes, right, I mean the 793 00:39:21,000 --> 00:39:25,120 Speaker 1: oil chart, and it looks like it could be building 794 00:39:25,120 --> 00:39:27,080 Speaker 1: a base. You know, it broke out and moved back 795 00:39:27,120 --> 00:39:30,520 Speaker 1: and retested some some levels of support. But yeah, we'll 796 00:39:30,520 --> 00:39:33,399 Speaker 1: see how that pattern develops. I mean, you know, I mean, 797 00:39:33,440 --> 00:39:36,839 Speaker 1: but it does. It does have more of a a 798 00:39:36,920 --> 00:39:40,560 Speaker 1: look of building a base within an uptrend for that. 799 00:39:40,680 --> 00:39:43,319 Speaker 1: So if that does work in oil stays stable to higher, 800 00:39:43,440 --> 00:39:47,799 Speaker 1: energy should work to some extent. I mean, obviously this 801 00:39:47,840 --> 00:39:51,200 Speaker 1: week or last couple of weeks, there's been some m 802 00:39:51,239 --> 00:39:53,640 Speaker 1: and A activity where some from the bigger names start 803 00:39:53,680 --> 00:39:55,760 Speaker 1: to get hit a little harder, but it didn't derail 804 00:39:55,800 --> 00:39:56,800 Speaker 1: the sector at all. Huh. 805 00:39:56,800 --> 00:40:02,120 Speaker 2: Interesting, I couldn't help but notice that very quietly, a 806 00:40:02,160 --> 00:40:08,239 Speaker 2: lot of cryptocurrency, most specifically Bitcoin, hit new fifty two 807 00:40:08,280 --> 00:40:12,120 Speaker 2: week highs. Nobody's talking about that. Really, What does that 808 00:40:12,200 --> 00:40:17,200 Speaker 2: mean when not only a particular stock or asset hits 809 00:40:17,200 --> 00:40:19,560 Speaker 2: a fifty two week high, but it seems to be 810 00:40:20,000 --> 00:40:22,360 Speaker 2: off the rail, blow the radar. What do you what 811 00:40:22,400 --> 00:40:23,000 Speaker 2: do you make of that? 812 00:40:23,080 --> 00:40:24,960 Speaker 1: Well, I can't talk about bitcoin. I don't think I'm 813 00:40:24,960 --> 00:40:27,400 Speaker 1: allowed to do that at via a security of the course. 814 00:40:28,239 --> 00:40:30,640 Speaker 1: But yeah, I mean, look, I mean if that and 815 00:40:30,680 --> 00:40:34,200 Speaker 1: we're seeing that in you know, in other areas in 816 00:40:34,239 --> 00:40:37,879 Speaker 1: the market as well. No, it just means nobody's there. 817 00:40:38,600 --> 00:40:39,360 Speaker 1: Nobody cares. 818 00:40:39,840 --> 00:40:42,560 Speaker 2: And which is now? Is that bullish or bearish? If 819 00:40:42,640 --> 00:40:45,040 Speaker 2: nobody cares that something's making a fifty two week high, 820 00:40:45,680 --> 00:40:49,160 Speaker 2: that might mean a lot more people could come into 821 00:40:49,160 --> 00:40:52,799 Speaker 2: that space. Forget bitcoin, any type of any type of 822 00:40:52,880 --> 00:40:54,800 Speaker 2: quiet fifty two week high. 823 00:40:54,960 --> 00:40:56,840 Speaker 1: I mean it happened. I think it probably happened with 824 00:40:57,000 --> 00:40:59,279 Speaker 1: energy names not long ago, you know, coming off the 825 00:40:59,280 --> 00:41:01,399 Speaker 1: lows of twenty two twenty, you know, they they moved 826 00:41:01,480 --> 00:41:04,239 Speaker 1: up a lot. Oh it's already up thirty percent. Well 827 00:41:04,239 --> 00:41:06,000 Speaker 1: it went up another fifty percent after that, you know 828 00:41:06,000 --> 00:41:10,040 Speaker 1: what I mean, that's that's people People actually have that argument. 829 00:41:10,440 --> 00:41:11,880 Speaker 1: Oh I missed it, So I'm gonna wait for it 830 00:41:11,920 --> 00:41:14,400 Speaker 1: to dip. And it doesn't dip. I mean, that's what 831 00:41:14,480 --> 00:41:16,799 Speaker 1: happens in that sort of environment. You know when when 832 00:41:16,840 --> 00:41:20,239 Speaker 1: you start to see that happen. So I'm sure over 833 00:41:20,280 --> 00:41:23,239 Speaker 1: the next few weeks there's gonna be patterns developing in 834 00:41:23,320 --> 00:41:26,600 Speaker 1: other pockets of the market where things that have been 835 00:41:26,719 --> 00:41:28,680 Speaker 1: left I mean, I don't want to use the term 836 00:41:28,760 --> 00:41:30,319 Speaker 1: left for dead, but I guess that's the only term. 837 00:41:30,440 --> 00:41:33,400 Speaker 1: It's Halloween, so might as well, right, I mean that, 838 00:41:33,560 --> 00:41:36,240 Speaker 1: you know, though they can rally quickly twenty thirty percent 839 00:41:36,239 --> 00:41:38,160 Speaker 1: and people be like, oh, I missed it, and then 840 00:41:38,239 --> 00:41:40,440 Speaker 1: three months later it's up another twenty or thirty percent. 841 00:41:40,480 --> 00:41:42,040 Speaker 1: I mean that that's the path, that's the way those 842 00:41:42,080 --> 00:41:43,040 Speaker 1: patterns tend to work. 843 00:41:43,360 --> 00:41:47,040 Speaker 2: You mentioned Halloween. What's the scariest chart you've seen recently? 844 00:41:49,160 --> 00:41:54,560 Speaker 1: Well, I what I don't want. There's one breath indicator 845 00:41:54,600 --> 00:41:57,760 Speaker 1: and I don't like right now, and it's just I mean, hopefully. 846 00:41:57,680 --> 00:41:58,680 Speaker 2: What's the breath indicator. 847 00:41:58,680 --> 00:42:01,400 Speaker 1: It's the percentage stocks pepture movement averages. They had some 848 00:42:01,480 --> 00:42:04,000 Speaker 1: devilish divergences in the summer and they broke to new 849 00:42:05,600 --> 00:42:06,880 Speaker 1: you know, year to date lows. 850 00:42:07,080 --> 00:42:09,279 Speaker 2: Mm hmm. Now and you don't like that. 851 00:42:10,239 --> 00:42:12,160 Speaker 1: It just I mean, I don't know. I mean, we 852 00:42:12,239 --> 00:42:14,759 Speaker 1: have to let's see if they get back to you know, 853 00:42:14,840 --> 00:42:19,360 Speaker 1: over soul levels. But you know, yeah, that's that's something 854 00:42:19,360 --> 00:42:21,520 Speaker 1: that's a bit challenging, you know. But they again, I 855 00:42:21,520 --> 00:42:24,520 Speaker 1: think it all has to do with the fact that, 856 00:42:25,360 --> 00:42:27,600 Speaker 1: you know, the equal weighted index has been lagging the 857 00:42:27,600 --> 00:42:29,640 Speaker 1: cap weighted index pretty much all year. 858 00:42:29,800 --> 00:42:33,000 Speaker 2: You're anticipating my next question, what does it mean when 859 00:42:33,040 --> 00:42:36,000 Speaker 2: you have this divergence between the S and B five 860 00:42:36,080 --> 00:42:38,560 Speaker 2: hundred the way we think of it as market cap 861 00:42:38,600 --> 00:42:42,640 Speaker 2: weighted versus the what is an SPW the that's equal 862 00:42:42,680 --> 00:42:46,319 Speaker 2: cap weighted. Uh that that divergence is about as big 863 00:42:46,400 --> 00:42:48,000 Speaker 2: as it's ever ever gets. 864 00:42:48,280 --> 00:42:50,040 Speaker 1: I mean, and that is a scary chart when you 865 00:42:50,080 --> 00:42:52,760 Speaker 1: look at it, relever the S and P scary because 866 00:42:53,800 --> 00:42:57,800 Speaker 1: if the technicals work on this, there's still more underperformance 867 00:42:58,000 --> 00:43:02,120 Speaker 1: coming for that the powder meaning that if you look 868 00:43:02,160 --> 00:43:05,439 Speaker 1: at the pattern going back a decade or more, there 869 00:43:05,480 --> 00:43:08,360 Speaker 1: is a potential that the equated index is forming what 870 00:43:08,480 --> 00:43:10,920 Speaker 1: would be called a head and shoulders top versus the 871 00:43:11,000 --> 00:43:14,080 Speaker 1: SMP the cap weighted index. I hope it doesn't work 872 00:43:14,120 --> 00:43:17,879 Speaker 1: because in our firm, you know, we have strategists that 873 00:43:18,719 --> 00:43:20,200 Speaker 1: you don't want to see the equo weight to work, 874 00:43:20,239 --> 00:43:21,640 Speaker 1: and I think it would probably be healthier for the 875 00:43:21,680 --> 00:43:22,960 Speaker 1: market if it did work. 876 00:43:23,320 --> 00:43:27,400 Speaker 2: It suggests that the market is relatively narrow at present, right, right, 877 00:43:27,520 --> 00:43:30,719 Speaker 2: I mean if the cap weighted is radically outperforming the 878 00:43:30,760 --> 00:43:34,960 Speaker 2: equal weighted, it means the biggest twenty stocks are the drivers. 879 00:43:35,080 --> 00:43:37,680 Speaker 1: Yeah, that's where you're getting your alpha. I mean in 880 00:43:37,800 --> 00:43:39,880 Speaker 1: terms of market breadth itself, I mean the advanced the 881 00:43:39,920 --> 00:43:41,399 Speaker 1: client on the S and P went to at all 882 00:43:41,400 --> 00:43:44,400 Speaker 1: time high over the summer, should be bullish, right, it 883 00:43:44,440 --> 00:43:50,680 Speaker 1: should be bullish, and it gets warisomewhere in my world. 884 00:43:50,800 --> 00:43:54,520 Speaker 1: When this lack of performance for equal weight versus cap 885 00:43:54,560 --> 00:43:58,000 Speaker 1: weight leads to weakening breadth indicators, which is why that 886 00:43:58,000 --> 00:44:00,279 Speaker 1: percentage of stocks about two hundred tay MoveOn average, it 887 00:44:00,320 --> 00:44:04,279 Speaker 1: seems scary to me. Now, I will say, when you 888 00:44:04,320 --> 00:44:10,080 Speaker 1: look at the equate versus cap weighted ratio lagging equate 889 00:44:10,200 --> 00:44:14,560 Speaker 1: lagging cap weighted, Guess what period of time that happened 890 00:44:14,600 --> 00:44:17,080 Speaker 1: in the past where the equity market was really strong 891 00:44:18,040 --> 00:44:19,759 Speaker 1: nineteen ninety four to two thousand. 892 00:44:19,600 --> 00:44:23,000 Speaker 2: Yeah, right, that that that was all driven by the 893 00:44:23,000 --> 00:44:24,680 Speaker 2: biggest tech companies at the time. 894 00:44:25,080 --> 00:44:27,879 Speaker 1: And also I think pharma was involved in that too, 895 00:44:28,800 --> 00:44:32,120 Speaker 1: and other large cap stocks here's the other interesting thing. 896 00:44:32,239 --> 00:44:34,320 Speaker 1: You look at the S and P one hundred index 897 00:44:34,400 --> 00:44:39,319 Speaker 1: right now, it does appear to be breaking out from 898 00:44:39,360 --> 00:44:44,960 Speaker 1: a multi year bottom versus the SMP meaning megacaps leading 899 00:44:45,120 --> 00:44:47,799 Speaker 1: large caps. The last time I saw a breakout like 900 00:44:47,840 --> 00:44:51,480 Speaker 1: that was nineteen ninety eight. I find it curious that 901 00:44:51,840 --> 00:44:55,600 Speaker 1: it's half that's happening and the equal weight lagging the 902 00:44:55,600 --> 00:44:58,959 Speaker 1: cap weighted because in the late nineties or the middle 903 00:44:59,000 --> 00:45:01,480 Speaker 1: eate nineties, the FED did hike rates quite a bit 904 00:45:02,040 --> 00:45:04,560 Speaker 1: and then they took some off and then hiked into 905 00:45:04,840 --> 00:45:08,520 Speaker 1: you know, ninety ninet two thousand with this environment for 906 00:45:08,560 --> 00:45:11,080 Speaker 1: these particular names. So it just seems to me with 907 00:45:11,160 --> 00:45:15,160 Speaker 1: these particular you know, size fragments working better than others. 908 00:45:15,200 --> 00:45:20,359 Speaker 1: So megacap market potentially at this point, just looking at this, 909 00:45:20,400 --> 00:45:22,880 Speaker 1: if it changes, I'll change, you know, I'll change my 910 00:45:22,960 --> 00:45:25,399 Speaker 1: view pretty quickly if it starts to change. But right now, 911 00:45:26,400 --> 00:45:28,480 Speaker 1: you know, I know a lot of people really want 912 00:45:28,520 --> 00:45:32,320 Speaker 1: to see more alpha generated by more stocks, but the 913 00:45:32,440 --> 00:45:34,600 Speaker 1: DERISA doesn't happen. But I do think instead of being 914 00:45:34,640 --> 00:45:38,440 Speaker 1: the magnificent seven, maybe it's a nifty to fifty because 915 00:45:38,480 --> 00:45:39,759 Speaker 1: the oex is breaking out. 916 00:45:40,000 --> 00:45:42,320 Speaker 2: Well, well, we also know how the nifty fifty ended. 917 00:45:42,360 --> 00:45:45,319 Speaker 1: So but it takes time, you know, it takes time, 918 00:45:45,480 --> 00:45:47,279 Speaker 1: a lot longer than people think. I mean, I'm sure 919 00:45:47,320 --> 00:45:50,120 Speaker 1: people were calling for a bubble in nineteen ninety eight, right, 920 00:45:50,120 --> 00:45:51,160 Speaker 1: and you had a huge run up. 921 00:45:51,160 --> 00:45:54,879 Speaker 2: They said, a long time, a long way to go. 922 00:45:55,480 --> 00:45:58,120 Speaker 2: You mentioned the Fed raising rates. Let's talk about the 923 00:45:58,160 --> 00:46:01,040 Speaker 2: bond market. What do you see in in treasuries and 924 00:46:01,120 --> 00:46:03,440 Speaker 2: the fixed income half of the portfolio. 925 00:46:03,840 --> 00:46:05,799 Speaker 1: Well, I mean, obviously that's not my call, is the 926 00:46:05,840 --> 00:46:09,680 Speaker 1: equity strategist at BFA. But when you look at the 927 00:46:09,760 --> 00:46:14,120 Speaker 1: tenure yield, the view is a secularize and interest rate. 928 00:46:15,200 --> 00:46:19,840 Speaker 1: And if I'm putting on my equity hat, and I 929 00:46:19,920 --> 00:46:21,319 Speaker 1: have to say, all right, what was the last time 930 00:46:21,360 --> 00:46:25,480 Speaker 1: you had interest rates rising from you know, levels around 931 00:46:25,560 --> 00:46:27,200 Speaker 1: one percent? I mean here we went a lot lower 932 00:46:27,280 --> 00:46:30,839 Speaker 1: during COVID, obviously, but mid nineteen forty, so nineteen forty 933 00:46:30,880 --> 00:46:33,719 Speaker 1: six into sixty six, a twenty year rise from about 934 00:46:33,760 --> 00:46:37,360 Speaker 1: one and a half to about five seven five over twenty. 935 00:46:37,200 --> 00:46:40,680 Speaker 2: Years, it's about about this, maybe a little smaller than 936 00:46:40,719 --> 00:46:41,560 Speaker 2: the current range. 937 00:46:41,960 --> 00:46:44,960 Speaker 1: Right. You know. The interesting thing is, I mean, if 938 00:46:44,960 --> 00:46:47,279 Speaker 1: COVID didn't happen, where would your yield low be, It's 939 00:46:47,320 --> 00:46:49,640 Speaker 1: either twenty twelve or sixteen, you know what I mean. So, 940 00:46:50,239 --> 00:46:53,319 Speaker 1: I mean maybe this secular rise and yielded a little 941 00:46:53,320 --> 00:46:55,760 Speaker 1: longer than people think it is. But I mean again, 942 00:46:55,800 --> 00:46:58,319 Speaker 1: the market did drop on the ten year note yield 943 00:46:58,360 --> 00:47:01,840 Speaker 1: to like what point three on the ten during COVID. 944 00:47:01,920 --> 00:47:04,279 Speaker 1: So and this is when you look at the yield chart, 945 00:47:04,320 --> 00:47:07,040 Speaker 1: it's like the fastest rise we've ever gotten. So if 946 00:47:07,040 --> 00:47:10,920 Speaker 1: we are going to follow you know, that period in 947 00:47:10,960 --> 00:47:13,520 Speaker 1: the fifties, I mean, right now, I think we're probably 948 00:47:13,560 --> 00:47:16,000 Speaker 1: I mean, if I'm looking at stocks and overlaying it 949 00:47:16,040 --> 00:47:19,520 Speaker 1: with interest rates and just trying to think about how 950 00:47:19,760 --> 00:47:23,000 Speaker 1: most you know, where we are in that particular analogue, 951 00:47:23,680 --> 00:47:29,120 Speaker 1: it's probably late fifties, early sixties. In some regard we've 952 00:47:29,120 --> 00:47:32,880 Speaker 1: been secular bulls. But what is not a characteristic of 953 00:47:32,920 --> 00:47:35,840 Speaker 1: a secular bull Its interest rates above five seven five, 954 00:47:36,280 --> 00:47:39,600 Speaker 1: and it's inflation, you know, surging again. You know, we 955 00:47:39,680 --> 00:47:42,520 Speaker 1: can't have that happen. It's very interesting when I get 956 00:47:42,719 --> 00:47:46,200 Speaker 1: people asking me stuff like when is the market going 957 00:47:46,239 --> 00:47:49,200 Speaker 1: to get back to normal? I'm like, well defined normal? 958 00:47:49,280 --> 00:47:51,880 Speaker 1: Well interesting, its need to be lower, you know, one percent. 959 00:47:51,880 --> 00:47:54,480 Speaker 2: I'm like, well, that's not normal, and you know, I 960 00:47:54,520 --> 00:47:58,160 Speaker 2: find out right, five is pretty normal. 961 00:47:58,280 --> 00:48:00,440 Speaker 1: I mean the average ten you note, yell, going back 962 00:48:00,480 --> 00:48:03,239 Speaker 1: to nineteen twenty, if you know, looking at the data, 963 00:48:03,320 --> 00:48:05,040 Speaker 1: is around four points seven. 964 00:48:05,280 --> 00:48:06,719 Speaker 2: So we're a little elevated. 965 00:48:06,760 --> 00:48:08,760 Speaker 1: We're right there, right, not not terrible. 966 00:48:08,880 --> 00:48:12,880 Speaker 2: Right, We're kissing five as we record this. What's a 967 00:48:13,000 --> 00:48:16,680 Speaker 2: quota point between friends? Right, it's not that. That's a 968 00:48:16,840 --> 00:48:20,319 Speaker 2: couple of days of you know, whild trading action, right. 969 00:48:20,440 --> 00:48:22,040 Speaker 1: So I mean, I mean, look, I mean get a 970 00:48:22,080 --> 00:48:24,160 Speaker 1: return on your cash, which is great. A lot of 971 00:48:24,160 --> 00:48:26,880 Speaker 1: people have taken advantage of that. So you know. The 972 00:48:26,960 --> 00:48:29,960 Speaker 1: other factor is, I mean, when is that record level 973 00:48:30,000 --> 00:48:31,680 Speaker 1: of cash going to be put to work in stocks? 974 00:48:31,719 --> 00:48:33,920 Speaker 1: You know, I mean with people making five to six 975 00:48:33,960 --> 00:48:36,239 Speaker 1: percent of money market funds, it's it's going to take 976 00:48:36,280 --> 00:48:38,640 Speaker 1: a little bit more, which is by design. You know, 977 00:48:38,800 --> 00:48:41,000 Speaker 1: the FED a lot of people take on risk with 978 00:48:41,160 --> 00:48:43,200 Speaker 1: rates at zero. Now you know, they don't want people 979 00:48:43,200 --> 00:48:45,560 Speaker 1: to take on as much risk in some regard, so 980 00:48:46,080 --> 00:48:48,600 Speaker 1: it's going to take a little more confidence, you know, 981 00:48:48,719 --> 00:48:52,440 Speaker 1: and equities too, because you get your hurdle retire, you know, 982 00:48:52,600 --> 00:48:54,799 Speaker 1: So it makes sense. So I mean that's the reason 983 00:48:54,840 --> 00:48:57,680 Speaker 1: why I think we are moving into a more normal environment. 984 00:48:57,719 --> 00:49:00,560 Speaker 1: We're actually getting a really normal type of correction rather 985 00:49:00,680 --> 00:49:03,640 Speaker 1: than something that lasts only you know, three to five percent, 986 00:49:03,680 --> 00:49:06,760 Speaker 1: We're getting a normal ten percent plus type of pullback. 987 00:49:07,280 --> 00:49:11,640 Speaker 2: You mentioned how COVID changed when what the lows were 988 00:49:11,920 --> 00:49:16,320 Speaker 2: in the bond market. It's a fascinating piece in the 989 00:49:16,400 --> 00:49:21,680 Speaker 2: Economists this week about in the post COVID world sentiment 990 00:49:21,800 --> 00:49:24,480 Speaker 2: data has you know, just gone off the rails. In fact, 991 00:49:24,880 --> 00:49:28,040 Speaker 2: if you look at the bottom of the sentiment data 992 00:49:28,080 --> 00:49:31,719 Speaker 2: in twenty twenty two, and I've been struggling with this 993 00:49:31,840 --> 00:49:35,239 Speaker 2: for a while, worse than the eighty seven crash, worse 994 00:49:35,280 --> 00:49:39,520 Speaker 2: than the dot Com implosion, worse than September eleventh, worse 995 00:49:39,600 --> 00:49:44,319 Speaker 2: than the Great Financial Crisis, and worse than the COVID lockdowns. 996 00:49:45,200 --> 00:49:48,600 Speaker 2: What do you make of this wildly noisy sentiment data? 997 00:49:48,960 --> 00:49:50,560 Speaker 1: So wait, which which data points were? 998 00:49:51,000 --> 00:49:56,640 Speaker 2: I believe it was the University of Michigan sentiment data. 999 00:49:57,040 --> 00:49:58,839 Speaker 1: And now it was the worse during COVID than any 1000 00:49:58,880 --> 00:49:59,719 Speaker 1: other period. 1001 00:50:00,000 --> 00:50:03,359 Speaker 2: Twenty two at a record low, worse than COVID, worse 1002 00:50:03,400 --> 00:50:07,200 Speaker 2: than GFC, worse than dot COM's just unprecedented levels that 1003 00:50:07,800 --> 00:50:12,880 Speaker 2: we've never seen. The economist is implying COVID just disrupted 1004 00:50:12,960 --> 00:50:13,799 Speaker 2: our sense of the world. 1005 00:50:14,160 --> 00:50:16,880 Speaker 1: It probably did. It probably did to some extent. And 1006 00:50:17,040 --> 00:50:20,720 Speaker 1: I think, you know, in twenty twenty two you started, 1007 00:50:20,840 --> 00:50:23,520 Speaker 1: I mean, I mean, you're already in a bear market 1008 00:50:24,040 --> 00:50:27,280 Speaker 1: from peaks in twenty twenty one. You already had indicators 1009 00:50:27,320 --> 00:50:28,960 Speaker 1: topping out in twenty twenty one, in the middle of 1010 00:50:28,960 --> 00:50:30,360 Speaker 1: the year and then late in the year. So we 1011 00:50:30,440 --> 00:50:34,520 Speaker 1: were well entrenched with economists looking for you know, you know, 1012 00:50:34,640 --> 00:50:36,759 Speaker 1: a massive hard landing at that point. So it would 1013 00:50:36,760 --> 00:50:38,759 Speaker 1: make sense the sentiment would be off the rails to 1014 00:50:38,840 --> 00:50:41,920 Speaker 1: some extent, you know, give given that. 1015 00:50:42,000 --> 00:50:46,960 Speaker 2: Outlook makes some sense. You frequently use a phrase that 1016 00:50:47,160 --> 00:50:52,839 Speaker 2: cracks me up in your research. Let's discuss your indicators. 1017 00:50:52,920 --> 00:50:55,040 Speaker 2: The Good, the bed, and the Ugly one of my 1018 00:50:55,120 --> 00:50:58,359 Speaker 2: favorite movies of all time. Looking at the world that's 1019 00:50:58,400 --> 00:51:01,120 Speaker 2: out there today. What's good, that's bad, what's ugly? 1020 00:51:02,000 --> 00:51:04,960 Speaker 1: Right? So, yeah, we we just you know, wanted to 1021 00:51:05,000 --> 00:51:06,520 Speaker 1: be a little tongue in cheek with some of our 1022 00:51:06,520 --> 00:51:09,440 Speaker 1: stuff here. So so we noticed that the percentage of 1023 00:51:09,480 --> 00:51:12,000 Speaker 1: stocks of a fifty day moving averages on the SMP 1024 00:51:12,360 --> 00:51:15,400 Speaker 1: actually did not go to a lower low, as the 1025 00:51:15,560 --> 00:51:19,160 Speaker 1: SMP went to a lower low just last Friday, so 1026 00:51:19,280 --> 00:51:21,839 Speaker 1: that has the potential to be good, you know, maybe 1027 00:51:22,120 --> 00:51:28,719 Speaker 1: triggers a seasonal rally. Another indicator we threw in there 1028 00:51:29,040 --> 00:51:36,040 Speaker 1: was the I think they call it the NAAIM exposure Index, 1029 00:51:36,280 --> 00:51:39,239 Speaker 1: that around twenty four percent versus over souls in the 1030 00:51:39,320 --> 00:51:43,760 Speaker 1: low twenties. That's getting closer. So so exposure among asset 1031 00:51:43,840 --> 00:51:46,959 Speaker 1: managers and market participants in equities is a lot lower 1032 00:51:47,040 --> 00:51:48,920 Speaker 1: than it was. So a lot of the I mean 1033 00:51:48,960 --> 00:51:50,439 Speaker 1: I always use the term a lot of the froth 1034 00:51:50,520 --> 00:51:52,960 Speaker 1: has been blown off the cappuccino, you know, over the 1035 00:51:53,040 --> 00:51:56,040 Speaker 1: last three months. So those are those are some you know, 1036 00:51:56,320 --> 00:51:59,799 Speaker 1: better looking indicators. I would argue that when you look 1037 00:51:59,840 --> 00:52:03,400 Speaker 1: at the Chicago Fed Financial Conditions Index, it's held in 1038 00:52:03,520 --> 00:52:06,520 Speaker 1: like a champ. So that's not what does that mean, Well, 1039 00:52:06,680 --> 00:52:09,120 Speaker 1: just means financial conditions aren't deteriorating, you know, to any 1040 00:52:09,160 --> 00:52:13,080 Speaker 1: great extent based on that indicator, you know, which is 1041 00:52:13,080 --> 00:52:16,160 Speaker 1: an indicator I like to use. Credit markets haven't blown 1042 00:52:16,200 --> 00:52:18,880 Speaker 1: out either, you know, So that's that, you know, spreads 1043 00:52:18,920 --> 00:52:20,160 Speaker 1: haven't blown out either, at least on. 1044 00:52:20,400 --> 00:52:22,360 Speaker 2: And there are people were warning that that was about 1045 00:52:22,400 --> 00:52:25,960 Speaker 2: to happen in the spring when Silicon Valley Bank and 1046 00:52:26,080 --> 00:52:28,560 Speaker 2: First Republic blew up. This is it. You're going to 1047 00:52:28,600 --> 00:52:31,800 Speaker 2: see credit markets turned go upside down, and that'll be 1048 00:52:31,880 --> 00:52:32,680 Speaker 2: it for equities. 1049 00:52:33,200 --> 00:52:35,400 Speaker 1: Not so much, not so much. I mean the corporate 1050 00:52:35,520 --> 00:52:37,640 Speaker 1: BAA to ten year spread is one I look. 1051 00:52:37,520 --> 00:52:41,160 Speaker 2: At a lot, meaning investment grade to just below investment grade. 1052 00:52:42,960 --> 00:52:45,839 Speaker 1: It's the tenure spread versus that. So I look at 1053 00:52:45,880 --> 00:52:48,439 Speaker 1: the lowest tier of investment grade versus the tenure yield 1054 00:52:48,640 --> 00:52:50,719 Speaker 1: versus the treasure got Yeah, And what I'm trying to 1055 00:52:50,760 --> 00:52:53,000 Speaker 1: say is, all right, when does stuff start to creep 1056 00:52:53,040 --> 00:52:55,279 Speaker 1: into investment grade, you know, the lower tier, and it 1057 00:52:55,320 --> 00:52:57,760 Speaker 1: hasn't happened. I mean that is well below two percent, 1058 00:52:58,920 --> 00:53:01,719 Speaker 1: and when you get aboup two point five, that's when 1059 00:53:01,800 --> 00:53:03,160 Speaker 1: things really start. 1060 00:53:02,960 --> 00:53:06,279 Speaker 2: To Let's talk about your sector work. How do you 1061 00:53:06,920 --> 00:53:10,080 Speaker 2: utilize different sectors and how does that work into your 1062 00:53:10,760 --> 00:53:13,560 Speaker 2: overall approach to macro. 1063 00:53:14,040 --> 00:53:15,800 Speaker 1: Well, I mean the sectors. I mean this is this 1064 00:53:16,000 --> 00:53:20,839 Speaker 1: is I've been shying away from having bold sector calls 1065 00:53:20,880 --> 00:53:23,840 Speaker 1: this year, and the reason why is you can find bullish, 1066 00:53:23,840 --> 00:53:26,880 Speaker 1: embarrassed stock charts everywhere no matter what sector you're looking at, 1067 00:53:28,200 --> 00:53:29,520 Speaker 1: even utilities. 1068 00:53:29,520 --> 00:53:31,920 Speaker 2: What does it mean when a sector is strong and 1069 00:53:32,080 --> 00:53:36,080 Speaker 2: an individual company is weak. Is it just reflecting that company? 1070 00:53:36,440 --> 00:53:37,840 Speaker 2: How do you draw a conclusion from that? 1071 00:53:38,040 --> 00:53:40,040 Speaker 1: No, I mean what you want to see. I mean, sure, 1072 00:53:40,120 --> 00:53:42,520 Speaker 1: that's a good question. So you know, if you have 1073 00:53:42,600 --> 00:53:44,560 Speaker 1: a bullish sector, I mean, I would argue tech is 1074 00:53:44,640 --> 00:53:47,280 Speaker 1: still a tech and comm services are still in quite 1075 00:53:47,440 --> 00:53:51,600 Speaker 1: bullish position. So if you have a stock and a 1076 00:53:51,640 --> 00:53:54,319 Speaker 1: bullish sector is not acting well, jazz are it's an 1077 00:53:54,360 --> 00:53:58,560 Speaker 1: idiosyncratic problem with that stock or chart, you know, probably 1078 00:53:58,600 --> 00:54:00,560 Speaker 1: a fundamental reason for it too, more so than a 1079 00:54:00,640 --> 00:54:03,400 Speaker 1: technical reason, because you know, the technicals are reflecting the 1080 00:54:03,480 --> 00:54:07,680 Speaker 1: fundamental situation to some extent. So I mean, I think 1081 00:54:07,760 --> 00:54:10,560 Speaker 1: right now, just looking at sectors and looking at you know, 1082 00:54:10,680 --> 00:54:14,040 Speaker 1: the way things look on the relative price charts along 1083 00:54:14,080 --> 00:54:16,600 Speaker 1: with the absolute price charts, it seems like, you know, 1084 00:54:16,719 --> 00:54:21,160 Speaker 1: tech is holding in fine comm services, holding in fine 1085 00:54:21,239 --> 00:54:27,640 Speaker 1: semi conductors, trying to hold their trend industrials, you know, trying, 1086 00:54:27,920 --> 00:54:31,080 Speaker 1: but you know, not not really convincing energy holding in 1087 00:54:31,200 --> 00:54:34,160 Speaker 1: just fine materials. It depends on the stock. You can 1088 00:54:34,239 --> 00:54:37,399 Speaker 1: find some winners, find some losers, and financials. It's really 1089 00:54:38,040 --> 00:54:42,120 Speaker 1: challenging because you know, you know two things. One, the 1090 00:54:42,160 --> 00:54:46,000 Speaker 1: absolute chart looks okay as long as it can hold 1091 00:54:46,080 --> 00:54:48,520 Speaker 1: those prior highs from two thousand and seven, which it 1092 00:54:48,600 --> 00:54:53,640 Speaker 1: has done, but the relative chart not okay. But within 1093 00:54:53,719 --> 00:54:57,120 Speaker 1: that group, you can find winners in things like exchanges 1094 00:54:57,160 --> 00:54:59,840 Speaker 1: and stuff like that that look really strong relative to 1095 00:55:00,600 --> 00:55:02,560 Speaker 1: the laggers of the group, which just happened to be, 1096 00:55:03,280 --> 00:55:05,080 Speaker 1: you know, the sector near and dear to my heart, the. 1097 00:55:05,120 --> 00:55:08,239 Speaker 2: Banks, you know, you know, just because you work for that, 1098 00:55:08,640 --> 00:55:12,600 Speaker 2: just to set you up to really like right, I mean, 1099 00:55:12,640 --> 00:55:12,920 Speaker 2: why not? 1100 00:55:13,040 --> 00:55:15,480 Speaker 1: I mean it's like, you know, it's you know, you 1101 00:55:15,560 --> 00:55:17,400 Speaker 1: want to see your companies, you know, Yeah, well of 1102 00:55:17,440 --> 00:55:17,920 Speaker 1: course you know. 1103 00:55:18,040 --> 00:55:22,200 Speaker 2: It's like so, so let's talk about the macro what 1104 00:55:22,400 --> 00:55:26,480 Speaker 2: goes into what you look at most when you're doing 1105 00:55:26,560 --> 00:55:29,320 Speaker 2: an overall view of the equity markets. 1106 00:55:29,680 --> 00:55:32,719 Speaker 1: Yeah. So, I mean, one of my favorite indicators, and 1107 00:55:32,760 --> 00:55:34,480 Speaker 1: I would lump it in with the good, would be 1108 00:55:34,680 --> 00:55:38,840 Speaker 1: the seventy three country Index of market breadth. So the 1109 00:55:38,880 --> 00:55:41,640 Speaker 1: advanced a client line for seventy three country indices. The 1110 00:55:41,760 --> 00:55:42,640 Speaker 1: US is one of those. 1111 00:55:43,040 --> 00:55:46,440 Speaker 2: So it's not just looking at the domestic equity markets. 1112 00:55:46,520 --> 00:55:48,480 Speaker 2: You want to see the whole world doing well at once. 1113 00:55:48,800 --> 00:55:51,160 Speaker 1: Yes, and that advanced a client line broke out during 1114 00:55:51,200 --> 00:55:55,120 Speaker 1: the summer, and even though the market correction has taken 1115 00:55:55,239 --> 00:55:58,600 Speaker 1: a lot of indicies below the summer breakout points, this 1116 00:55:58,760 --> 00:56:01,799 Speaker 1: particular advanced to Client I remains above its breakout point, 1117 00:56:01,920 --> 00:56:04,239 Speaker 1: meing that there are pockets of the world that are 1118 00:56:04,280 --> 00:56:09,160 Speaker 1: working better than others, you know, out there. So yeah, 1119 00:56:09,200 --> 00:56:11,080 Speaker 1: I think I think that's important to point out. And 1120 00:56:12,440 --> 00:56:15,800 Speaker 1: and so global breath has a roll over, So it 1121 00:56:15,880 --> 00:56:18,160 Speaker 1: tells us that we're in a corrective phase within what 1122 00:56:18,280 --> 00:56:21,080 Speaker 1: could very well be a market that may yet have 1123 00:56:21,200 --> 00:56:23,480 Speaker 1: another upleake to it, not just in the US, but 1124 00:56:23,640 --> 00:56:25,680 Speaker 1: also you know, globally. 1125 00:56:26,160 --> 00:56:30,520 Speaker 2: So since we're talking about global the world always is 1126 00:56:30,760 --> 00:56:34,640 Speaker 2: kind of a scary place lately. You flip on the news, 1127 00:56:35,120 --> 00:56:38,840 Speaker 2: geopolitics is everywhere. It's Russia and the Ukraine, It's the 1128 00:56:38,920 --> 00:56:42,080 Speaker 2: things that are going on in Israel. It's the economy 1129 00:56:42,480 --> 00:56:46,919 Speaker 2: in Europe and especially China seems to be falling into 1130 00:56:47,000 --> 00:56:50,520 Speaker 2: its own problems. How do you think about all these 1131 00:56:51,040 --> 00:56:55,520 Speaker 2: big geopolitical events or do you not? It's really either 1132 00:56:55,600 --> 00:56:56,560 Speaker 2: in the charts or not. 1133 00:56:57,640 --> 00:56:59,719 Speaker 1: No, I would say it's a latter, and the charts 1134 00:56:59,760 --> 00:57:03,800 Speaker 1: are not. So I mean, put it this way. Market 1135 00:57:03,880 --> 00:57:08,360 Speaker 1: is a discounting mechanism, and sometimes it discounts things in advance, 1136 00:57:08,440 --> 00:57:12,880 Speaker 1: of course, but when things are surprised, it discounts things quickly. 1137 00:57:13,760 --> 00:57:15,920 Speaker 1: And I think that's really the way to think about it. 1138 00:57:17,600 --> 00:57:21,160 Speaker 1: And what's interesting I've noted. I mean maybe there's a 1139 00:57:21,240 --> 00:57:24,320 Speaker 1: little bit of gold taking on to old fashioned. 1140 00:57:24,960 --> 00:57:29,880 Speaker 2: Safe harbor, a little apocalyptic currency. 1141 00:57:30,080 --> 00:57:31,440 Speaker 1: Yeah. I mean, if you look at the research that 1142 00:57:31,600 --> 00:57:33,760 Speaker 1: you know, my colleague puts out, you know, policy on 1143 00:57:33,960 --> 00:57:35,760 Speaker 1: I mean, there's like a huge base on gold. You 1144 00:57:35,840 --> 00:57:38,520 Speaker 1: know that that if it ever breaks out, it can 1145 00:57:38,560 --> 00:57:42,720 Speaker 1: go up a lot. And the events of the world 1146 00:57:42,960 --> 00:57:45,120 Speaker 1: have enhanced that pattern a little bit. 1147 00:57:45,400 --> 00:57:48,240 Speaker 2: So the question I have for your colleague is, Hey, 1148 00:57:48,320 --> 00:57:51,560 Speaker 2: the past decades, so a lot of really crazy things happen, 1149 00:57:52,440 --> 00:57:55,360 Speaker 2: and gold, you know, quote a little bit of a bid, 1150 00:57:55,560 --> 00:57:57,760 Speaker 2: but never really could get out of its own way. 1151 00:57:59,040 --> 00:58:01,840 Speaker 2: In fact, I don't think it got over the two 1152 00:58:01,880 --> 00:58:05,440 Speaker 2: thousand and eight nine highs. What do we make of 1153 00:58:05,680 --> 00:58:09,400 Speaker 2: gold sort of forming this long? Is this a base 1154 00:58:09,520 --> 00:58:10,280 Speaker 2: or is this a top? 1155 00:58:11,640 --> 00:58:16,600 Speaker 1: No, it looks like the mother of all cup and handles. 1156 00:58:17,120 --> 00:58:20,400 Speaker 2: You know, coin and a cup and handle pattern looks like. 1157 00:58:20,480 --> 00:58:22,480 Speaker 1: Yeah, I'm gonna define it because it's like it's it's 1158 00:58:22,680 --> 00:58:25,160 Speaker 1: bill and Eel coined it right, right, So the cup, 1159 00:58:25,400 --> 00:58:29,120 Speaker 1: the handle, the cup is this big rounding type of 1160 00:58:29,200 --> 00:58:32,200 Speaker 1: base stock rally. Sometimes it goes to a new high, 1161 00:58:32,200 --> 00:58:34,120 Speaker 1: which it did, so I did go above where it 1162 00:58:34,320 --> 00:58:37,240 Speaker 1: was briefly, right, yeah, a few times though. Now you 1163 00:58:37,320 --> 00:58:39,960 Speaker 1: have three probes up and then and the probe down. 1164 00:58:40,000 --> 00:58:42,120 Speaker 1: So you got the cup and now you're forming the 1165 00:58:42,200 --> 00:58:46,600 Speaker 1: handle and the handles a lot shalloiler in terms of price. 1166 00:58:46,440 --> 00:58:49,360 Speaker 2: Decline, meaning buyers are coming in higher. 1167 00:58:49,200 --> 00:58:52,760 Speaker 1: Prices, meaning that there's demand for gold at higher prices. 1168 00:58:53,360 --> 00:58:58,080 Speaker 1: And if this technical formation works, I mean, and gold 1169 00:58:58,120 --> 00:59:01,320 Speaker 1: can clear those hives that have heard over the last three, 1170 00:59:01,400 --> 00:59:05,200 Speaker 1: four or five years, then you got the pattern and 1171 00:59:05,520 --> 00:59:08,840 Speaker 1: you can go much higher than where gold is today 1172 00:59:08,960 --> 00:59:11,800 Speaker 1: if we do complete that pattern. And gold was interesting too, 1173 00:59:11,880 --> 00:59:14,560 Speaker 1: because if I put my equity hat on and look 1174 00:59:14,560 --> 00:59:16,400 Speaker 1: at gold the way I look at a stock, it 1175 00:59:16,480 --> 00:59:20,040 Speaker 1: tagged its two under week moving average perfectly rising two 1176 00:59:20,080 --> 00:59:23,920 Speaker 1: under week moving average, which means secular uptrend. You know, 1177 00:59:24,040 --> 00:59:28,000 Speaker 1: even though gold is consolidated, it just lends more confidence 1178 00:59:28,080 --> 00:59:31,040 Speaker 1: that the pattern we're in now is more more likely 1179 00:59:31,080 --> 00:59:33,560 Speaker 1: to break higher than breakdown, and you know, just looking 1180 00:59:33,600 --> 00:59:37,480 Speaker 1: at just evidence based type of technical analysis. 1181 00:59:37,360 --> 00:59:40,680 Speaker 2: And you mentioned towards the end of twenty one there 1182 00:59:40,720 --> 00:59:44,520 Speaker 2: were lots of warning signs. What did the technical say 1183 00:59:45,320 --> 00:59:50,000 Speaker 2: about twenty twenty two, And let's revisit the June and 1184 00:59:50,120 --> 00:59:54,200 Speaker 2: October twenty twenty two bottoms. What were the technical saying? Then? 1185 00:59:54,440 --> 00:59:58,240 Speaker 1: Sure, so we put out our year ahead for twenty 1186 00:59:58,320 --> 01:00:01,120 Speaker 1: twenty two. Buckle up, it's going to be a rocky year. 1187 01:00:01,320 --> 01:00:02,800 Speaker 2: That's a pretty good, pretty good call. 1188 01:00:03,480 --> 01:00:07,520 Speaker 1: Yeah, I mean, you know it was. Yeah, I felt 1189 01:00:07,560 --> 01:00:09,960 Speaker 1: good about it. I mean, look, when you're looking at 1190 01:00:10,000 --> 01:00:13,280 Speaker 1: credit spreads peaking in the summer, you're looking at financial conditions, 1191 01:00:14,400 --> 01:00:16,600 Speaker 1: you know, hitting their best levels in the summer twenty 1192 01:00:16,680 --> 01:00:18,800 Speaker 1: twenty one and then deteriorating through the end of the year. 1193 01:00:19,360 --> 01:00:21,280 Speaker 1: When you're looking at the percentage of stocks for two 1194 01:00:21,320 --> 01:00:25,400 Speaker 1: hundred day moving averages diverging for six months, you know 1195 01:00:25,440 --> 01:00:27,280 Speaker 1: a few other indicators I could point out, but it's 1196 01:00:27,280 --> 01:00:30,840 Speaker 1: a laundry list. And the SMP going to a new 1197 01:00:31,520 --> 01:00:35,919 Speaker 1: high in January, whereas the Nasdaq one hundred NASDAK comp 1198 01:00:36,000 --> 01:00:38,880 Speaker 1: topped out in November. It's telling you something's going on, 1199 01:00:39,600 --> 01:00:42,640 Speaker 1: and it just suggested to us that the rally that 1200 01:00:42,680 --> 01:00:45,400 Speaker 1: we've gotten from the COVID lows was at risk and 1201 01:00:45,520 --> 01:00:49,160 Speaker 1: we were entering into a corrective phase. And you know, 1202 01:00:49,240 --> 01:00:52,760 Speaker 1: we were targeting levels like thirty eight hundred, and we 1203 01:00:52,880 --> 01:00:55,880 Speaker 1: also throughout the two hundred week moving average, which you 1204 01:00:55,960 --> 01:00:58,320 Speaker 1: know when it eventually tested, it was like thirty four 1205 01:00:58,320 --> 01:01:00,080 Speaker 1: to ninety, you know, around thirty five hundred on the 1206 01:01:00,080 --> 01:01:03,720 Speaker 1: two hundred week we would average. So that was the pattern. 1207 01:01:03,760 --> 01:01:06,280 Speaker 1: And then we looked at twenty twenty throughout the year 1208 01:01:06,480 --> 01:01:08,840 Speaker 1: twenty twenty two, and you did hit a nice low 1209 01:01:08,880 --> 01:01:11,800 Speaker 1: in June and you were able to rally, and then 1210 01:01:11,840 --> 01:01:14,680 Speaker 1: guess what happened. You stalled a declining forty week two 1211 01:01:14,760 --> 01:01:18,520 Speaker 1: hundred day moving average in August, and then you went 1212 01:01:18,600 --> 01:01:22,520 Speaker 1: down and undercut the June low I just by a 1213 01:01:22,560 --> 01:01:24,600 Speaker 1: little bit. And I would say that was a nice 1214 01:01:24,840 --> 01:01:28,760 Speaker 1: retest of that low. There were some indicators. I believe 1215 01:01:28,800 --> 01:01:31,680 Speaker 1: the fourteen week RSI had a higher low, meaning price 1216 01:01:31,840 --> 01:01:35,720 Speaker 1: momentum improved even though the SMP went to a lower low, 1217 01:01:36,280 --> 01:01:39,200 Speaker 1: so it was so that was a positive. I believe 1218 01:01:39,240 --> 01:01:41,960 Speaker 1: there are also fewer new fifty two week lows, and 1219 01:01:42,040 --> 01:01:44,160 Speaker 1: the other ingredient was that we just talked about earlier, 1220 01:01:45,320 --> 01:01:48,040 Speaker 1: you know, versus June and November. You actually started to 1221 01:01:48,120 --> 01:01:52,760 Speaker 1: see the dollar peak and yield's peak in October, so 1222 01:01:53,000 --> 01:01:56,120 Speaker 1: that helped the market stabilize and bottom out. So was 1223 01:01:56,200 --> 01:01:59,200 Speaker 1: their capitulation, because that's what a lot of people, you know, 1224 01:01:59,720 --> 01:02:03,320 Speaker 1: hung on. We didn't get the capitulation in October twenty 1225 01:02:03,400 --> 01:02:05,640 Speaker 1: twenty two, and I would argue we did. The one 1226 01:02:05,680 --> 01:02:10,000 Speaker 1: indicator I would point to to support two indicators. First, AAII, 1227 01:02:10,200 --> 01:02:13,880 Speaker 1: Bears went to the highest level the most bears since 1228 01:02:13,960 --> 01:02:15,080 Speaker 1: early two thousand and nine. 1229 01:02:15,440 --> 01:02:16,840 Speaker 2: That's pretty big level. 1230 01:02:17,040 --> 01:02:19,800 Speaker 1: That's a huge level. So that's one, and the other 1231 01:02:19,880 --> 01:02:22,360 Speaker 1: one is that three month miix versus vix went below 1232 01:02:22,440 --> 01:02:27,200 Speaker 1: one late September early October of twenty twenty two to 1233 01:02:27,320 --> 01:02:31,080 Speaker 1: suggest to us that the tactical medium term you know, 1234 01:02:31,440 --> 01:02:37,520 Speaker 1: momentum of medium term sentiment did capitulate. So bears capitulated 1235 01:02:37,600 --> 01:02:41,160 Speaker 1: from institution from retail investors h and the three month 1236 01:02:41,600 --> 01:02:45,640 Speaker 1: versus vix moved below one to suggest, you know, capitulation 1237 01:02:45,760 --> 01:02:49,080 Speaker 1: on that indicator. And the other thing that was very 1238 01:02:49,120 --> 01:02:53,800 Speaker 1: interesting about October of last year was that entering the month, 1239 01:02:53,880 --> 01:02:58,760 Speaker 1: we had two extraordinarily bullish breath days ninety percent up 1240 01:02:58,840 --> 01:03:03,479 Speaker 1: days on the NYFC in a row, and that helps 1241 01:03:03,480 --> 01:03:06,840 Speaker 1: slidify a bottom too, even though the first few sessions 1242 01:03:06,920 --> 01:03:09,240 Speaker 1: after that it gave up all the rally from those 1243 01:03:09,280 --> 01:03:12,440 Speaker 1: two days, but the market did find support, you know, 1244 01:03:12,760 --> 01:03:15,400 Speaker 1: with those days. So it was a very complicated market. Normally, 1245 01:03:15,440 --> 01:03:17,000 Speaker 1: when you get those two types of things, you just 1246 01:03:17,120 --> 01:03:20,520 Speaker 1: rip to the upside. But huh, it's just so volatile now, 1247 01:03:20,720 --> 01:03:20,880 Speaker 1: you know. 1248 01:03:21,160 --> 01:03:25,800 Speaker 2: So let's sum up the secular view of the markets. 1249 01:03:26,280 --> 01:03:30,040 Speaker 2: We had a thirty four percent downturn in twenty twenty 1250 01:03:30,520 --> 01:03:33,960 Speaker 2: during the pandemic. The rest of the year from those lows, 1251 01:03:34,000 --> 01:03:36,640 Speaker 2: I think we have plus sixty eight percent the following 1252 01:03:36,720 --> 01:03:39,880 Speaker 2: year plus twenty nine percent, and then we come into 1253 01:03:40,000 --> 01:03:44,120 Speaker 2: twenty twenty two. Where are we broadly? Have we been 1254 01:03:44,360 --> 01:03:49,760 Speaker 2: in a cyclical correction within a longer secular bull market? Is? 1255 01:03:50,160 --> 01:03:52,800 Speaker 2: Is that how you're describing this? And if we are, 1256 01:03:53,280 --> 01:03:56,440 Speaker 2: how long could that secular bullmarket run for? 1257 01:03:56,880 --> 01:04:00,680 Speaker 1: Yeah? So it's a great question. So first, the view 1258 01:04:00,840 --> 01:04:04,880 Speaker 1: of the twenty twenty two correction was secular cyclical, cyclical correction, 1259 01:04:05,480 --> 01:04:10,160 Speaker 1: secular bull market. We made comparisons with the year zone 1260 01:04:10,200 --> 01:04:13,959 Speaker 1: crisis in twenty twelve very similar to that. Also twenty 1261 01:04:14,040 --> 01:04:18,120 Speaker 1: sixteen Brexit and the election that year and trade war 1262 01:04:18,160 --> 01:04:22,200 Speaker 1: in twenty nineteen, and one can even argue COVID twenty 1263 01:04:22,280 --> 01:04:25,240 Speaker 1: twenty similar setup where you went down tested the two 1264 01:04:25,320 --> 01:04:27,960 Speaker 1: hundred week m cross above the forty week and then 1265 01:04:28,000 --> 01:04:30,520 Speaker 1: corrected to undercut the forty week. You did it twice 1266 01:04:31,080 --> 01:04:33,680 Speaker 1: twice in twenty twelve, once prior to summer rally and 1267 01:04:33,760 --> 01:04:36,560 Speaker 1: once prior to the year on rally twenty twelve. Twenty sixteen, 1268 01:04:36,920 --> 01:04:39,280 Speaker 1: you hit it right when the brigs of vote happened 1269 01:04:39,280 --> 01:04:42,240 Speaker 1: and then boom ripped into a summer rally fall correction 1270 01:04:42,680 --> 01:04:45,120 Speaker 1: year end rally after Trump got e liket to president 1271 01:04:45,120 --> 01:04:47,400 Speaker 1: of twenty sixteen and then tried to trade war. Two 1272 01:04:47,440 --> 01:04:50,320 Speaker 1: similar type of dips, one in the right ahead of 1273 01:04:50,320 --> 01:04:52,240 Speaker 1: a summer rally and one ahead of the year end rally. 1274 01:04:52,720 --> 01:04:54,680 Speaker 1: So here we go. We had one in March, which 1275 01:04:54,680 --> 01:04:57,080 Speaker 1: is a little early, but it happened. You rallied above 1276 01:04:57,120 --> 01:04:59,520 Speaker 1: the forty week, then moved below it, and then rally 1277 01:04:59,560 --> 01:05:01,720 Speaker 1: back up by the time you're in April, and you 1278 01:05:01,800 --> 01:05:04,480 Speaker 1: got a nice summer rally and then right on. C 1279 01:05:04,720 --> 01:05:07,600 Speaker 1: seasonality always says going back to nineteen twenty eight. Well, 1280 01:05:07,680 --> 01:05:10,000 Speaker 1: you know, seasonality says, going back to nineteen twenty eight, 1281 01:05:10,360 --> 01:05:12,440 Speaker 1: the worst three month period of the year is August 1282 01:05:12,520 --> 01:05:15,280 Speaker 1: through October. And that's exactly what's going on right here. 1283 01:05:15,360 --> 01:05:19,160 Speaker 1: We're getting that traditional correction which usually proceeds the best 1284 01:05:19,200 --> 01:05:22,120 Speaker 1: three month periods of the year of November through January. 1285 01:05:22,240 --> 01:05:24,920 Speaker 1: So I think that's where we are now. So we 1286 01:05:25,040 --> 01:05:29,240 Speaker 1: could very well be ending this cyclical correction soon if 1287 01:05:29,320 --> 01:05:32,320 Speaker 1: we follow seasonal patterns. Now, how long can the secular 1288 01:05:32,680 --> 01:05:38,160 Speaker 1: bull market last? Well, there's a financial advisor who helped 1289 01:05:38,200 --> 01:05:41,280 Speaker 1: me coin this term. I guess he was a Marilyn 1290 01:05:41,360 --> 01:05:46,040 Speaker 1: Monroe fan. The seven year itch, So seven years after 1291 01:05:46,120 --> 01:05:49,680 Speaker 1: the breakout of twenty thirteen was COVID and the marketer spike. 1292 01:05:49,520 --> 01:05:53,960 Speaker 2: Low and thirty four percent is normally considered a pretty 1293 01:05:53,960 --> 01:05:55,200 Speaker 2: substantial bear market. 1294 01:05:55,520 --> 01:05:57,360 Speaker 1: I mean, the only only one in the secular bowl 1295 01:05:57,440 --> 01:06:00,120 Speaker 1: trend that matched it was the eighty seven crash. And 1296 01:06:00,160 --> 01:06:03,200 Speaker 1: guess what eighty seven, seven years after the eighty breakout, 1297 01:06:03,360 --> 01:06:06,480 Speaker 1: So seven year itch there, I call it halftime. You know, 1298 01:06:06,600 --> 01:06:09,680 Speaker 1: not everybody knows Marilyn Monroe is, you know, I mean 1299 01:06:09,680 --> 01:06:12,800 Speaker 1: I did a Jaws reference in one of my Morning 1300 01:06:12,840 --> 01:06:16,040 Speaker 1: call appearances, you know, talking about how the market needed 1301 01:06:16,040 --> 01:06:18,600 Speaker 1: to build a bigger base. You're going to need a 1302 01:06:18,640 --> 01:06:20,960 Speaker 1: bigger base, and sure enough, I bet you if that 1303 01:06:21,080 --> 01:06:24,560 Speaker 1: trading floor, probably google what's jaws? Because no, think about 1304 01:06:24,720 --> 01:06:27,000 Speaker 1: think of the average age down there. But bottom line 1305 01:06:27,080 --> 01:06:28,760 Speaker 1: is this, and I just digress, So let me get 1306 01:06:28,800 --> 01:06:31,040 Speaker 1: back to what I was talking about. So the seven 1307 01:06:31,080 --> 01:06:35,720 Speaker 1: year low eighty seven will market lasted until twenty two thousand, 1308 01:06:35,760 --> 01:06:38,840 Speaker 1: and then fifty seven fifty breakout in the SMP above 1309 01:06:38,880 --> 01:06:44,040 Speaker 1: the thirty seven high, and then you rallied into you 1310 01:06:44,120 --> 01:06:45,960 Speaker 1: know prior to nineteen fifty seven, had a correction in 1311 01:06:46,040 --> 01:06:50,600 Speaker 1: nineteen fifty seven, which was recession and a pandemic, so 1312 01:06:50,800 --> 01:06:54,440 Speaker 1: go figure. And then that lasted another nine years. So 1313 01:06:55,640 --> 01:06:59,080 Speaker 1: I mean, if I'm just saying, hey, midpoint twenty twenty 1314 01:06:59,720 --> 01:07:02,800 Speaker 1: from twenty thirteen, maybe it lasts until twenty twenty seven, 1315 01:07:03,240 --> 01:07:06,000 Speaker 1: but some of these other bowl markets lasted longer. Maybe 1316 01:07:06,000 --> 01:07:07,640 Speaker 1: I have to get a little bit of haircut. Given 1317 01:07:07,680 --> 01:07:10,959 Speaker 1: where inflation interest rates are. I mean that's quite a possibility. Sure. 1318 01:07:12,200 --> 01:07:14,480 Speaker 1: In fact, I mean for order for the secular call 1319 01:07:14,560 --> 01:07:17,320 Speaker 1: to really work, I mean, let's face it, inflation does 1320 01:07:17,400 --> 01:07:22,360 Speaker 1: need to come down and cannot spike you know, ten 1321 01:07:22,440 --> 01:07:24,360 Speaker 1: twelve percent. I mean, if it does, that's not what 1322 01:07:24,480 --> 01:07:28,080 Speaker 1: happens during secular bowl markets, you know what you know, 1323 01:07:28,160 --> 01:07:30,800 Speaker 1: the nineteen fifty secular bowl market started with you know, 1324 01:07:30,880 --> 01:07:33,520 Speaker 1: inflation high, and then it went down and stayed fairly contained. 1325 01:07:34,120 --> 01:07:36,760 Speaker 1: You know, higher interest rates not what you want to see. 1326 01:07:37,520 --> 01:07:37,640 Speaker 2: You know. 1327 01:07:37,760 --> 01:07:40,560 Speaker 1: Nineteen eighty short started with interest rates double digits, but 1328 01:07:40,720 --> 01:07:43,280 Speaker 1: our friend Vulker, you know, did what he needed to 1329 01:07:43,320 --> 01:07:47,080 Speaker 1: do and solve that problem, or heights went down. So 1330 01:07:47,560 --> 01:07:49,640 Speaker 1: you know, ten to to note yield is trending through 1331 01:07:49,920 --> 01:07:52,360 Speaker 1: five and a half five point seven five, and inflation's 1332 01:07:52,360 --> 01:07:54,680 Speaker 1: going back up. You know, I think it's going to 1333 01:07:54,720 --> 01:07:57,680 Speaker 1: be very difficult for this secular bowl trend to be sustained. 1334 01:07:57,720 --> 01:08:01,120 Speaker 1: Because it hasn't happened before. It doesn't mean it can't happen. 1335 01:08:01,720 --> 01:08:04,040 Speaker 1: But I can't find, you know, you know, any history 1336 01:08:04,120 --> 01:08:05,360 Speaker 1: to support that case. Huh. 1337 01:08:05,520 --> 01:08:10,320 Speaker 2: Really interesting. So let's talk a little bit about what 1338 01:08:10,600 --> 01:08:14,400 Speaker 2: follows the worst three months of the year. You mentioned August, September, 1339 01:08:14,480 --> 01:08:18,680 Speaker 2: October tends to be seasonally the worst part of the year. 1340 01:08:19,560 --> 01:08:24,080 Speaker 2: I've seen all sorts of explanations for why that is harvest, 1341 01:08:24,320 --> 01:08:28,240 Speaker 2: people distracted with summer vacation, going back to school, whatever 1342 01:08:28,360 --> 01:08:32,679 Speaker 2: it is. The last three months tend to be pretty good. 1343 01:08:33,280 --> 01:08:35,559 Speaker 2: What are the odds that we're going to see Santa 1344 01:08:35,600 --> 01:08:36,840 Speaker 2: Claus come to Wall Street? 1345 01:08:38,560 --> 01:08:41,439 Speaker 1: I hope they're pretty good first and foremost, When you know, 1346 01:08:41,520 --> 01:08:45,559 Speaker 1: we use traditional seasonality work, So traditional seasonality, what does 1347 01:08:45,600 --> 01:08:48,800 Speaker 1: it tell you? You know, everybody talks about selling May 1348 01:08:48,840 --> 01:08:51,320 Speaker 1: and go away, but do you ever see anybody go 1349 01:08:51,400 --> 01:08:53,840 Speaker 1: on the media and say, hey, buy in October and stay. 1350 01:08:54,640 --> 01:08:56,439 Speaker 1: They don't because that doesn't sell. 1351 01:08:56,560 --> 01:08:59,080 Speaker 2: And it doesn't rhyme. That's you know, it's true, and 1352 01:08:59,200 --> 01:09:00,800 Speaker 2: it runs. That's the key. 1353 01:09:01,160 --> 01:09:01,800 Speaker 1: Yeah, that's true. 1354 01:09:01,840 --> 01:09:04,080 Speaker 2: Buy in October trend as your friend. If there's no 1355 01:09:04,200 --> 01:09:07,400 Speaker 2: rhyme there, it's no good except for the bend at 1356 01:09:07,439 --> 01:09:08,200 Speaker 2: the end of course. 1357 01:09:08,520 --> 01:09:10,600 Speaker 1: Yeah. But it's really what's really funny about it is, 1358 01:09:10,680 --> 01:09:13,680 Speaker 1: I mean, November starts the best three and six month 1359 01:09:13,760 --> 01:09:15,760 Speaker 1: periods of the year for the S and P, which 1360 01:09:15,840 --> 01:09:17,760 Speaker 1: I think, going back to ninety twenty a is really 1361 01:09:17,840 --> 01:09:20,960 Speaker 1: encouraging for those looking for the market to stabilize. But 1362 01:09:21,400 --> 01:09:24,360 Speaker 1: when you think about where we are in the presidential cycle, 1363 01:09:24,800 --> 01:09:28,200 Speaker 1: we're in year three, so year two to year three 1364 01:09:28,439 --> 01:09:32,400 Speaker 1: has the best part of the cycle, from fourth quarter 1365 01:09:32,560 --> 01:09:34,880 Speaker 1: year two, which was last year around this time, through 1366 01:09:35,040 --> 01:09:37,360 Speaker 1: the middle of year three. So and we fought, we 1367 01:09:37,479 --> 01:09:40,960 Speaker 1: did that perfectly. And now we're you know, we're doing 1368 01:09:41,280 --> 01:09:44,479 Speaker 1: the getting ready for year four. We're getting ready for 1369 01:09:44,560 --> 01:09:48,439 Speaker 1: year four. But right here, right now, it's tough in 1370 01:09:48,600 --> 01:09:55,040 Speaker 1: year three August, September, October, November, so seasonality might be 1371 01:09:56,360 --> 01:10:01,360 Speaker 1: pushed into December. We could struggle into November because that 1372 01:10:01,680 --> 01:10:03,880 Speaker 1: can happen in the third year of the presidential cycle. 1373 01:10:04,360 --> 01:10:07,360 Speaker 1: So in the third year of the presidential cycle, positive 1374 01:10:07,439 --> 01:10:12,679 Speaker 1: Q four performance is typically a Santa Claus rally event. 1375 01:10:13,640 --> 01:10:18,679 Speaker 1: So and then the next part of the cycle calls 1376 01:10:18,800 --> 01:10:24,519 Speaker 1: for a choppy pattern into May of next year. But 1377 01:10:24,600 --> 01:10:28,880 Speaker 1: then you follow traditional seasonal patterns summer rally, fall, dip 1378 01:10:29,080 --> 01:10:32,439 Speaker 1: and correction and rally after the election, and it doesn't 1379 01:10:32,439 --> 01:10:34,960 Speaker 1: matter who wins or loses. I mean, in twenty sixteen, 1380 01:10:35,000 --> 01:10:38,800 Speaker 1: everybody thought Trump was a disaster. Everybody thought Biden was 1381 01:10:38,840 --> 01:10:41,599 Speaker 1: a disaster, and the contested election was a disaster. 1382 01:10:41,720 --> 01:10:44,240 Speaker 2: Market loth cases, market did well, market. 1383 01:10:44,040 --> 01:10:47,760 Speaker 1: Did well, So I think, you know, granted, I mean 1384 01:10:47,840 --> 01:10:50,840 Speaker 1: that we're into an interesting period of time here where 1385 01:10:52,040 --> 01:10:54,880 Speaker 1: it may take a bit longer for the market to stabilize. 1386 01:10:55,080 --> 01:10:58,439 Speaker 1: But I do think if we follow, you know, the 1387 01:10:59,200 --> 01:11:01,240 Speaker 1: pattern were December should be good. 1388 01:11:01,600 --> 01:11:05,200 Speaker 2: So let's talk about another sort of historical pattern, not 1389 01:11:05,360 --> 01:11:08,679 Speaker 2: quite seasonal. I've seen a lot of studies that suggest 1390 01:11:08,800 --> 01:11:14,640 Speaker 2: when the FED finishes its rate hiking cycle shortly thereafter, 1391 01:11:14,920 --> 01:11:17,640 Speaker 2: we're off to the races and the equity side. It 1392 01:11:17,960 --> 01:11:21,760 Speaker 2: almost feels like the market isn't sure if the Fed 1393 01:11:21,880 --> 01:11:26,080 Speaker 2: is done, and once the market is comfortable, hey, we're 1394 01:11:26,160 --> 01:11:30,479 Speaker 2: done raising rates, the next leg up can begin. Does 1395 01:11:30,560 --> 01:11:32,600 Speaker 2: that sound reasonable or what are your thoughts on that? 1396 01:11:33,360 --> 01:11:36,960 Speaker 1: I mean it does sound reasonable. I mean clarity around 1397 01:11:37,000 --> 01:11:41,559 Speaker 1: when that final rate cuts happening probably would be helpful. 1398 01:11:41,720 --> 01:11:43,360 Speaker 1: I mean, I think that's one reason why the market 1399 01:11:43,439 --> 01:11:46,439 Speaker 1: is struggling a little bit, because there's that last hike 1400 01:11:46,600 --> 01:11:48,400 Speaker 1: just sitting out there creating uncertainty. 1401 01:11:48,520 --> 01:11:50,880 Speaker 2: Plus you have a lot of Fed governor's jaw boning 1402 01:11:50,960 --> 01:11:53,920 Speaker 2: back and forth. It doesn't seem like there's a consensus 1403 01:11:54,000 --> 01:11:54,439 Speaker 2: there yet. 1404 01:11:54,880 --> 01:11:58,120 Speaker 1: Yes, I mean, my dad was a bond guy all 1405 01:11:58,240 --> 01:12:02,120 Speaker 1: his life, and he point he told me FOMC stands 1406 01:12:02,160 --> 01:12:05,120 Speaker 1: for Federal open mouth Committee, meaning they talk a lot 1407 01:12:05,640 --> 01:12:07,760 Speaker 1: and sometimes confused markets. And back when in the day 1408 01:12:07,800 --> 01:12:09,720 Speaker 1: when he was trading bonds, they didn't tell you what 1409 01:12:09,760 --> 01:12:11,439 Speaker 1: they were doing either at the FED meetings. You had 1410 01:12:11,479 --> 01:12:12,559 Speaker 1: to figure it out from price action. 1411 01:12:12,880 --> 01:12:16,200 Speaker 2: They didn't even announce that. People don't realize when you 1412 01:12:16,320 --> 01:12:17,960 Speaker 2: talk about some people who have only been in the 1413 01:12:18,000 --> 01:12:21,280 Speaker 2: business for ten or twenty years, the FED didn't even 1414 01:12:21,360 --> 01:12:23,400 Speaker 2: tell you were hiking rates. You would just have to 1415 01:12:23,439 --> 01:12:26,360 Speaker 2: see what would take place in the in the bond market. 1416 01:12:26,439 --> 01:12:29,200 Speaker 2: Suddenly it's like, hey, who's uh, who's buying all these 1417 01:12:29,240 --> 01:12:32,120 Speaker 2: equities or who's selling all these bonds? You had to 1418 01:12:32,160 --> 01:12:33,280 Speaker 2: figure out what was going on. 1419 01:12:34,040 --> 01:12:36,040 Speaker 1: I mean, we are spoon fed, that's for sure. I 1420 01:12:36,120 --> 01:12:38,240 Speaker 1: mean then, you know, I don't know whether that's a 1421 01:12:38,280 --> 01:12:40,760 Speaker 1: good or bad thing. I mean, you know again, I 1422 01:12:40,840 --> 01:12:44,479 Speaker 1: mean information just comes at us so quickly, quickly digested. 1423 01:12:44,520 --> 01:12:46,680 Speaker 1: You got machines that help you digest the information and 1424 01:12:47,000 --> 01:12:50,000 Speaker 1: do and make trading decisions. But yeah, the environment has 1425 01:12:50,040 --> 01:12:53,320 Speaker 1: definitely gotten, you know, more complicated. I mean, my dad 1426 01:12:53,720 --> 01:12:55,439 Speaker 1: taking the train back in the day, he wasn't getting 1427 01:12:55,720 --> 01:12:57,840 Speaker 1: emails on the you know, he could he could actually 1428 01:12:57,880 --> 01:12:59,760 Speaker 1: play bridge with a few other guys on the train, 1429 01:12:59,800 --> 01:12:59,920 Speaker 1: you know. 1430 01:13:00,240 --> 01:13:02,439 Speaker 2: So let me let me ask you a related question 1431 01:13:02,600 --> 01:13:07,920 Speaker 2: to that about the Fed spoon feeding us. Say what 1432 01:13:08,080 --> 01:13:12,760 Speaker 2: you will about Jerome pal and the Federal Reserve. He said, 1433 01:13:12,880 --> 01:13:15,880 Speaker 2: we're going to raise rates, and he started raising rates. 1434 01:13:16,439 --> 01:13:19,400 Speaker 2: In fact, he said we're going to raise rates aggressively 1435 01:13:19,640 --> 01:13:22,840 Speaker 2: to combat inflation. Now we could say they were a 1436 01:13:22,840 --> 01:13:24,880 Speaker 2: little late to the party. They should have started a 1437 01:13:25,000 --> 01:13:28,320 Speaker 2: year earlier. But hold that aside. It seems like the 1438 01:13:28,479 --> 01:13:32,320 Speaker 2: equity market didn't believe the Fed chairman when he said, 1439 01:13:33,439 --> 01:13:36,040 Speaker 2: hold my beer, watch what I'm about to do with rates. 1440 01:13:36,120 --> 01:13:37,240 Speaker 2: Nobody seemed to believe him. 1441 01:13:38,200 --> 01:13:39,840 Speaker 1: Well, I mean, I think it's good that the equity 1442 01:13:39,960 --> 01:13:42,280 Speaker 1: market was able to you know, I mean, obviously at 1443 01:13:42,280 --> 01:13:45,960 Speaker 1: first it corrected, but he will rally again because again, 1444 01:13:46,040 --> 01:13:48,839 Speaker 1: I mean, you know, people say, hey, rates, they're increasing 1445 01:13:48,920 --> 01:13:51,200 Speaker 1: rates drastically, and I'm like, no, I would I would not. 1446 01:13:52,040 --> 01:13:54,240 Speaker 1: I would call it normalization of rates. 1447 01:13:55,000 --> 01:13:55,160 Speaker 2: You know. 1448 01:13:55,520 --> 01:13:58,160 Speaker 1: You know, I think it's a freely what's going on. 1449 01:13:58,479 --> 01:14:02,920 Speaker 1: It's not. It's not I mean, as aggressively hiking they did, 1450 01:14:03,120 --> 01:14:06,600 Speaker 1: but they got it to a more normalized level. So 1451 01:14:06,760 --> 01:14:08,920 Speaker 1: I and you know, again I mean, is it normal 1452 01:14:09,040 --> 01:14:12,040 Speaker 1: to get a return on cash investment? To answer that question, 1453 01:14:12,080 --> 01:14:15,000 Speaker 1: I would argue is yes. So this is the most 1454 01:14:15,080 --> 01:14:17,160 Speaker 1: normal environment we've been in a long. 1455 01:14:17,040 --> 01:14:19,400 Speaker 2: Time, which is kind of crazy to think about the 1456 01:14:19,520 --> 01:14:24,320 Speaker 2: previous two decades. We're abnormal. And think about everybody who's 1457 01:14:24,840 --> 01:14:29,000 Speaker 2: you know, first started investing in these twenty years. You 1458 01:14:29,080 --> 01:14:32,200 Speaker 2: had a ten year bear market right from two thousand 1459 01:14:32,280 --> 01:14:38,080 Speaker 2: to I don't know, cold twenty twelve, twenty thirteen. Is 1460 01:14:38,560 --> 01:14:42,240 Speaker 2: this normal or is this normalizing? We may not quite 1461 01:14:42,280 --> 01:14:43,280 Speaker 2: be it normal yet. 1462 01:14:43,200 --> 01:14:45,840 Speaker 1: Are we Well, we'll see. I mean, it takes time 1463 01:14:45,960 --> 01:14:48,680 Speaker 1: to really figure that one out, but you know, I 1464 01:14:48,760 --> 01:14:50,519 Speaker 1: think I think we're a lot more normal than we 1465 01:14:50,600 --> 01:14:51,400 Speaker 1: were ten years ago. 1466 01:14:51,760 --> 01:14:56,080 Speaker 2: You mentioned different market cycles in the fifties and the sixties. 1467 01:14:56,560 --> 01:15:02,200 Speaker 2: Use a lot of historical references. How informative is going 1468 01:15:02,280 --> 01:15:06,320 Speaker 2: back decades or centuries The world was so different, you know, 1469 01:15:06,600 --> 01:15:10,439 Speaker 2: in an era of telegraphs and railroads. Can we really 1470 01:15:10,720 --> 01:15:15,800 Speaker 2: carry forward lessons from that era from chart action to 1471 01:15:16,160 --> 01:15:16,880 Speaker 2: the modern world. 1472 01:15:17,520 --> 01:15:20,200 Speaker 1: I mean, I think you can. The primary reason you 1473 01:15:20,280 --> 01:15:23,000 Speaker 1: can is because dynamics of human nature and fear and 1474 01:15:23,080 --> 01:15:25,760 Speaker 1: greed haven't changed. Now people will say, well, there's more 1475 01:15:25,800 --> 01:15:29,000 Speaker 1: mechanical trading this you know these days with high frequency 1476 01:15:29,040 --> 01:15:31,000 Speaker 1: trading and things like that. I'm like, well, who created the. 1477 01:15:31,040 --> 01:15:32,960 Speaker 2: Programs, who's running those algos? 1478 01:15:33,120 --> 01:15:35,080 Speaker 1: It's human beings who created it. So I mean, there 1479 01:15:35,160 --> 01:15:38,719 Speaker 1: is a human element touching all of that. So maybe 1480 01:15:38,760 --> 01:15:41,160 Speaker 1: if we're coming back in ten years, twenty years and 1481 01:15:41,800 --> 01:15:43,880 Speaker 1: the machines are creating things, then maybe we have a 1482 01:15:43,920 --> 01:15:46,400 Speaker 1: different argument to talk about. But one would think if 1483 01:15:46,400 --> 01:15:48,479 Speaker 1: the machines were working the market, it wouldn't be as 1484 01:15:48,520 --> 01:15:51,679 Speaker 1: emotional as it is. And yeah, it is very emotional. 1485 01:15:51,880 --> 01:15:54,479 Speaker 2: It very much is. You know, it's funny. I read 1486 01:15:54,520 --> 01:15:57,080 Speaker 2: a book a while ago. I think it was published 1487 01:15:57,120 --> 01:16:00,880 Speaker 2: in the nineteen twenties by Richard wa Cough How I 1488 01:16:01,000 --> 01:16:06,800 Speaker 2: Trade Stocks, And what was so shocking was Okay, it 1489 01:16:06,920 --> 01:16:10,880 Speaker 2: was about railroads and telephone companies, but you could swap 1490 01:16:11,000 --> 01:16:16,960 Speaker 2: in internet and technology and nothing is different. It reads 1491 01:16:17,000 --> 01:16:19,680 Speaker 2: as if it was written last month. It's it's really 1492 01:16:19,800 --> 01:16:22,799 Speaker 2: quite fascinating. That is human nature, Isn't it exactly? 1493 01:16:23,120 --> 01:16:25,679 Speaker 1: Progress? I guess is the term. I mean, maybe maybe 1494 01:16:25,720 --> 01:16:29,240 Speaker 1: we fear greed and progress, and I hope progress continues. 1495 01:16:30,160 --> 01:16:32,160 Speaker 1: I mean, look, I mean maybe this is maybe the 1496 01:16:32,560 --> 01:16:36,720 Speaker 1: secular driver of this is the AI theme or you know, 1497 01:16:36,840 --> 01:16:39,240 Speaker 1: things like that. I mean, because every secular bowl trend 1498 01:16:39,360 --> 01:16:41,439 Speaker 1: has some sort of theme behind it. 1499 01:16:42,080 --> 01:16:45,320 Speaker 2: You think, give us some examples. I like the concept 1500 01:16:45,400 --> 01:16:45,560 Speaker 2: of that. 1501 01:16:45,800 --> 01:16:48,840 Speaker 1: Well, well, I mean, you know, obviously, I think the 1502 01:16:48,920 --> 01:16:53,240 Speaker 1: fifties was more of a build back after World War two. 1503 01:16:53,160 --> 01:16:57,519 Speaker 2: Post war right, and for people who may not know 1504 01:16:57,600 --> 01:17:00,439 Speaker 2: their history. You had the build out of the interested 1505 01:17:00,800 --> 01:17:04,519 Speaker 2: highway system. You had the rise of suburbia, the rise 1506 01:17:04,560 --> 01:17:11,599 Speaker 2: of automobile companies and the commercialization of passenger air travel 1507 01:17:12,080 --> 01:17:14,160 Speaker 2: and the electronic insurt There were a lot of things 1508 01:17:14,200 --> 01:17:16,800 Speaker 2: that took place in the fifties and sixties that drove 1509 01:17:16,880 --> 01:17:20,160 Speaker 2: everything forward. Every time we have a secular bull market, 1510 01:17:20,240 --> 01:17:22,200 Speaker 2: do you see something similar. 1511 01:17:21,800 --> 01:17:23,560 Speaker 1: To this should be? Yeah, I mean I think so. 1512 01:17:23,680 --> 01:17:25,760 Speaker 1: I mean because the eighties, you know, you know, I 1513 01:17:25,800 --> 01:17:29,679 Speaker 1: guess acknowledge of birth out of the computer and thing internet, sure, 1514 01:17:30,120 --> 01:17:31,200 Speaker 1: and then yeah. 1515 01:17:31,439 --> 01:17:34,880 Speaker 2: Mobile, Yeah. You just that twenty year period saw a 1516 01:17:35,000 --> 01:17:37,040 Speaker 2: lot of new industries pop into existence. 1517 01:17:37,120 --> 01:17:39,120 Speaker 1: And then when it gets too exciting, such as the 1518 01:17:39,200 --> 01:17:41,800 Speaker 1: tech bubble, that's when things change and it doesn't seem 1519 01:17:41,880 --> 01:17:45,400 Speaker 1: like we're there now. Because we talked about these indicators 1520 01:17:45,479 --> 01:17:47,800 Speaker 1: peeking out in advance of the market in twenty twenty one, 1521 01:17:48,479 --> 01:17:50,840 Speaker 1: I don't really have that here, you know, as we're 1522 01:17:51,120 --> 01:17:53,760 Speaker 1: on this corrective phase, except for the percentage stocks about 1523 01:17:53,760 --> 01:17:56,000 Speaker 1: doing in a day movement averages that does have the divergence. 1524 01:17:56,720 --> 01:18:01,080 Speaker 1: But credit spreads confirmed the rally. Financial addition confirm the rally. 1525 01:18:01,479 --> 01:18:03,559 Speaker 1: You know, a lot of other indicators confirm the rally. 1526 01:18:03,680 --> 01:18:06,280 Speaker 1: So you know, there's you know, a little different than 1527 01:18:06,840 --> 01:18:08,280 Speaker 1: say two years ago at this point. 1528 01:18:08,360 --> 01:18:11,080 Speaker 2: So I'm glad you brought that up. I want to 1529 01:18:11,160 --> 01:18:17,320 Speaker 2: talk about what you called the Magnificent seven and compare 1530 01:18:17,360 --> 01:18:21,360 Speaker 2: it to prior eras when you take the seven biggest 1531 01:18:21,400 --> 01:18:27,639 Speaker 2: companies on the SP five hundred, their revenues collectively are 1532 01:18:27,720 --> 01:18:31,519 Speaker 2: something like one point eight trillion dollars. Their profits are 1533 01:18:31,560 --> 01:18:35,080 Speaker 2: a quarter of a trillion dollars. Put on your CFA 1534 01:18:35,200 --> 01:18:37,599 Speaker 2: hat for a moment, and let me ask you, hey, 1535 01:18:37,680 --> 01:18:40,479 Speaker 2: they're a disproportionate part of the S and B five 1536 01:18:40,600 --> 01:18:45,000 Speaker 2: hundred with good reason? Is that a fair statement? We've 1537 01:18:45,120 --> 01:18:50,000 Speaker 2: never seen any group of seven companies make so much 1538 01:18:50,479 --> 01:18:54,160 Speaker 2: in revenue and so much in profits. How wrong is 1539 01:18:54,200 --> 01:18:58,519 Speaker 2: it that these are? You know, the the Darling stocks it. 1540 01:18:58,760 --> 01:19:01,519 Speaker 1: Might not be wrong, and quite frankly, I would argue 1541 01:19:01,600 --> 01:19:05,599 Speaker 1: that could very well be a factor of a secular 1542 01:19:05,640 --> 01:19:09,760 Speaker 1: bowl market. And here's why. During secular bowl markets, what 1543 01:19:09,960 --> 01:19:12,439 Speaker 1: outperforms large caps are small caps. 1544 01:19:12,680 --> 01:19:16,960 Speaker 2: Large caps, you know, they're international, they have a broader reach, 1545 01:19:17,400 --> 01:19:22,200 Speaker 2: they have great access to capital. Small caps graduate, that's right, 1546 01:19:23,160 --> 01:19:26,320 Speaker 2: graduate to mid caps. Mid caps graduates slash gaps, sluge gaps, 1547 01:19:26,400 --> 01:19:27,599 Speaker 2: become big caps. 1548 01:19:27,840 --> 01:19:29,760 Speaker 1: So you know, the interesting thing is like in the 1549 01:19:29,800 --> 01:19:32,800 Speaker 1: equal weight, you know, had its best period during the 1550 01:19:33,280 --> 01:19:36,560 Speaker 1: two thousand to twenty thirteen bear market for equities. So 1551 01:19:37,240 --> 01:19:43,120 Speaker 1: one would argue that having a greater concentration, you know, 1552 01:19:43,280 --> 01:19:45,800 Speaker 1: not not to the extent I mean, you know, maybe 1553 01:19:45,840 --> 01:19:48,840 Speaker 1: it's magnificent fifty, maybe a magnificent one hundred going forward. 1554 01:19:48,880 --> 01:19:51,000 Speaker 1: I mean that I would take that as a bullet 1555 01:19:51,080 --> 01:19:53,799 Speaker 1: sign if if we went from the seven to the twenty, 1556 01:19:54,120 --> 01:19:57,920 Speaker 1: maybe even more. But but you're rewarding the winners and 1557 01:19:58,120 --> 01:20:00,439 Speaker 1: and you know, I guess that's capitalism for you in 1558 01:20:00,479 --> 01:20:01,240 Speaker 1: some regards, you. 1559 01:20:01,240 --> 01:20:04,680 Speaker 2: Know, so makes a lot of sense. Before we get 1560 01:20:04,720 --> 01:20:08,240 Speaker 2: to our favorite questions, let me throw you one curveball. 1561 01:20:09,000 --> 01:20:13,720 Speaker 2: You you you do both broad analysis and I don't 1562 01:20:13,720 --> 01:20:16,679 Speaker 2: know if I would call them just outright market calls, 1563 01:20:16,760 --> 01:20:22,320 Speaker 2: but you certainly share opinions about where we are and 1564 01:20:22,400 --> 01:20:25,080 Speaker 2: where we could go. What were some of your most 1565 01:20:25,240 --> 01:20:28,840 Speaker 2: memorable calls that have stayed with you? What do you 1566 01:20:29,080 --> 01:20:31,080 Speaker 2: what do you remember most fondly and what are you 1567 01:20:31,920 --> 01:20:34,120 Speaker 2: not so keen on prior calls? 1568 01:20:35,160 --> 01:20:37,680 Speaker 1: Well, I mean, I think the Secular Bowl market call 1569 01:20:37,760 --> 01:20:41,040 Speaker 1: has been a great one since that. What are the 1570 01:20:41,120 --> 01:20:43,880 Speaker 1: dates of the twenty thirteen when we broke out and 1571 01:20:44,040 --> 01:20:45,600 Speaker 1: twenty twelve we broke out in the S and P 1572 01:20:46,479 --> 01:20:47,200 Speaker 1: and the Nasdaq. 1573 01:20:47,640 --> 01:20:50,320 Speaker 2: I'm twenty thirteen on the S and P above the 1574 01:20:50,400 --> 01:20:54,080 Speaker 2: two thousand and fifteen seventies yep, seven highs yep. 1575 01:20:54,320 --> 01:20:56,800 Speaker 1: And you know that was that was that was really 1576 01:20:57,120 --> 01:20:57,679 Speaker 1: the big call. 1577 01:20:57,880 --> 01:21:00,479 Speaker 2: And a ton of pushback, right I remember remember twenty 1578 01:21:00,560 --> 01:21:03,240 Speaker 2: thirteen people were like, no, no, no, this is just 1579 01:21:03,320 --> 01:21:04,920 Speaker 2: a bare market rally and it's going to end. 1580 01:21:04,960 --> 01:21:06,640 Speaker 1: So well, we did a radio show on that. I 1581 01:21:06,720 --> 01:21:08,920 Speaker 1: remember back in the day, you and me talking about it, 1582 01:21:08,960 --> 01:21:10,640 Speaker 1: and I was explaining, well, I mean, you know, a 1583 01:21:10,720 --> 01:21:12,400 Speaker 1: big trading range you break out of it. You know, 1584 01:21:12,520 --> 01:21:15,720 Speaker 1: this is like nineteen fifty, nineteen eighty, it should continue. 1585 01:21:15,400 --> 01:21:19,559 Speaker 2: For a while, and it did for seven years until COVID. 1586 01:21:19,880 --> 01:21:21,960 Speaker 1: I mean the call I want to forget though, is 1587 01:21:22,040 --> 01:21:24,559 Speaker 1: being so bold up on value over growth entering this year, 1588 01:21:24,560 --> 01:21:26,639 Speaker 1: because quite frankly, it looked like a classic double top 1589 01:21:26,680 --> 01:21:28,840 Speaker 1: that supported the case for value to beat growth, and 1590 01:21:28,960 --> 01:21:29,920 Speaker 1: obviously that didn't work. 1591 01:21:30,160 --> 01:21:32,960 Speaker 2: That value did have a good cup of twenty one 1592 01:21:33,080 --> 01:21:36,839 Speaker 2: twenty two, pretty good years compared to the prior decade. 1593 01:21:36,920 --> 01:21:39,960 Speaker 2: In fact, that might be the longest run we've seen 1594 01:21:40,040 --> 01:21:43,479 Speaker 2: of value underperforming growth until twenty one. 1595 01:21:43,640 --> 01:21:45,400 Speaker 1: That is that a fair yes, I think so it was. 1596 01:21:45,479 --> 01:21:47,200 Speaker 1: I think it bottomed out in two thousand and six. 1597 01:21:47,320 --> 01:21:50,720 Speaker 1: So and you know, one would thought that you would 1598 01:21:50,760 --> 01:21:52,960 Speaker 1: have seen a peak in that, you know, not that 1599 01:21:53,040 --> 01:21:55,160 Speaker 1: you have to sell all your tech names and buy 1600 01:21:55,200 --> 01:21:57,879 Speaker 1: all the value names, because you know that is obviously 1601 01:21:58,040 --> 01:22:01,479 Speaker 1: not what you want to do. But but yeah, it 1602 01:22:01,640 --> 01:22:07,080 Speaker 1: was surprising that that technical formation did not work, you know, 1603 01:22:07,160 --> 01:22:12,280 Speaker 1: a nice classic double top formation on growth relative value. 1604 01:22:12,800 --> 01:22:16,120 Speaker 1: A little bit surprising, and the NASDAC stall I'm not 1605 01:22:16,160 --> 01:22:22,200 Speaker 1: the knavesac yet. The technology sector stalled at its two 1606 01:22:22,280 --> 01:22:28,639 Speaker 1: thousand high relatively SMP entering this year. And then, of course, 1607 01:22:28,840 --> 01:22:32,599 Speaker 1: when growth versus value didn't work. I mean, when value 1608 01:22:32,960 --> 01:22:35,040 Speaker 1: beating growth did not work and growth took the mantle 1609 01:22:35,080 --> 01:22:38,160 Speaker 1: leadership again, gets what happened? Tech broke out to all 1610 01:22:38,240 --> 01:22:40,960 Speaker 1: time highs of relative to the SMP, going all the 1611 01:22:41,000 --> 01:22:43,519 Speaker 1: way back to two thousand. I mean, maybe that's the 1612 01:22:43,600 --> 01:22:45,400 Speaker 1: message we need to take here. As long as that 1613 01:22:45,520 --> 01:22:49,639 Speaker 1: breakouts in place. You know, how is how is value 1614 01:22:49,640 --> 01:22:50,280 Speaker 1: going to be growth? 1615 01:22:50,760 --> 01:22:53,640 Speaker 2: Huh? Really really interesting? All right, let's jump to our 1616 01:22:53,720 --> 01:22:57,839 Speaker 2: favorite questions that we ask all of our guests, starting 1617 01:22:57,920 --> 01:22:59,960 Speaker 2: with what have you been streaming these days? 1618 01:23:00,120 --> 01:23:00,679 Speaker 1: Give us your. 1619 01:23:00,600 --> 01:23:05,120 Speaker 2: Favorite podcast or Netflix Amazon type of shows? 1620 01:23:05,960 --> 01:23:08,680 Speaker 1: Sure? So, in terms of TV shows and things like that, 1621 01:23:08,880 --> 01:23:14,960 Speaker 1: I uh, well, I've been watching Loki Disney plus a 1622 01:23:15,200 --> 01:23:18,280 Speaker 1: big Star Wars fan, so obviously I watched the Mandaloria 1623 01:23:18,320 --> 01:23:18,879 Speaker 1: and Ahsoka. 1624 01:23:20,240 --> 01:23:22,600 Speaker 2: I'm way behind on Ahsoka, so no, I will not 1625 01:23:22,760 --> 01:23:23,400 Speaker 2: say anything. 1626 01:23:23,680 --> 01:23:24,800 Speaker 1: Yeah, but it looked really the. 1627 01:23:24,840 --> 01:23:26,719 Speaker 2: First couple episodes looked really interesting. 1628 01:23:27,000 --> 01:23:30,240 Speaker 1: Yeah, solid show. I mean I'm into all those superhero 1629 01:23:30,400 --> 01:23:32,360 Speaker 1: shows like I mean even some of the gory and 1630 01:23:32,520 --> 01:23:34,240 Speaker 1: vraunchy ones like The Boys. 1631 01:23:34,400 --> 01:23:36,479 Speaker 2: The Boys was great, and the second season, you know, 1632 01:23:36,520 --> 01:23:38,280 Speaker 2: there's a third season coming also. 1633 01:23:38,160 --> 01:23:40,760 Speaker 1: I hope so and now I'm watching this v university 1634 01:23:40,840 --> 01:23:45,040 Speaker 1: show or something like that with same same concept, same 1635 01:23:45,240 --> 01:23:49,559 Speaker 1: same people, but young kids that are in school. 1636 01:23:49,920 --> 01:23:52,559 Speaker 2: Oh okay, I saw a preview few. It looks interesting. 1637 01:23:52,760 --> 01:23:56,679 Speaker 1: It's gory, you know, so as The Boys was totally gory. Yeah, 1638 01:23:56,840 --> 01:23:59,240 Speaker 1: and then you know, of course I'm sitting this looks interesting. 1639 01:23:59,280 --> 01:24:02,599 Speaker 1: It's about kids, you know. Splat, and I'm like, turn 1640 01:24:02,680 --> 01:24:04,960 Speaker 1: it on, and all of a sudden, oops, it's turn 1641 01:24:05,080 --> 01:24:05,400 Speaker 1: that off. 1642 01:24:06,400 --> 01:24:06,560 Speaker 2: You know. 1643 01:24:06,960 --> 01:24:08,560 Speaker 1: My son was in the room. He wasn't watching it, 1644 01:24:08,640 --> 01:24:10,400 Speaker 1: but he was doing something else, right, And I'm like, 1645 01:24:10,400 --> 01:24:11,680 Speaker 1: all right, this come right off. 1646 01:24:12,320 --> 01:24:17,280 Speaker 2: So if you liked The Boys, there are two shows 1647 01:24:17,280 --> 01:24:20,920 Speaker 2: that were on Amazon Prime that you might like. I 1648 01:24:21,040 --> 01:24:24,000 Speaker 2: think everybody knows The Expanse was pretty popular. 1649 01:24:24,160 --> 01:24:25,840 Speaker 1: I didn't see that one yet. It's a great sci 1650 01:24:25,960 --> 01:24:27,400 Speaker 1: fi and that's right. 1651 01:24:28,360 --> 01:24:31,320 Speaker 2: But something that's a little more eclectic and not well 1652 01:24:31,439 --> 01:24:35,440 Speaker 2: known was Altered Carbon. It was only two seasons. Amazing. 1653 01:24:36,320 --> 01:24:39,400 Speaker 1: Yeah. Last year I was into a Stranger I went 1654 01:24:39,439 --> 01:24:40,880 Speaker 1: through I binged Stranger Things. 1655 01:24:41,920 --> 01:24:42,400 Speaker 2: How'd you like that? 1656 01:24:42,520 --> 01:24:44,920 Speaker 1: Oh? I love that show because I was in nineteen 1657 01:24:45,080 --> 01:24:47,720 Speaker 1: eighties Dungeon and Dragons Kid. So now I'm playing it 1658 01:24:47,800 --> 01:24:50,519 Speaker 1: now with my son, some of his friends. So COVID 1659 01:24:50,600 --> 01:24:52,840 Speaker 1: actually brought a few things out. You know, he got 1660 01:24:52,880 --> 01:24:55,000 Speaker 1: that into some old hobbies, you know, just kind of 1661 01:24:55,000 --> 01:24:55,240 Speaker 1: a fight. 1662 01:24:56,040 --> 01:25:01,560 Speaker 2: During COVID, we broke out all of the kitchen appliances 1663 01:25:01,640 --> 01:25:04,880 Speaker 2: and winning gifts that just had not been touched. Like 1664 01:25:05,200 --> 01:25:09,200 Speaker 2: that's literally like the Jonana things like that where you're 1665 01:25:09,240 --> 01:25:12,599 Speaker 2: putting frozen fruit into this device and turning it into 1666 01:25:12,800 --> 01:25:17,120 Speaker 2: that's so cool scream and the air fryers and it's 1667 01:25:17,160 --> 01:25:20,120 Speaker 2: really funny. Everybody went to the basement or garage or 1668 01:25:20,160 --> 01:25:22,680 Speaker 2: were at storage room and pulled out the stuff that 1669 01:25:22,800 --> 01:25:26,400 Speaker 2: had been gathering dust for years. It was that was 1670 01:25:26,479 --> 01:25:27,799 Speaker 2: the best part of COVID. 1671 01:25:27,840 --> 01:25:30,439 Speaker 1: I found. I found, yeah, my dungeon master's guy, my 1672 01:25:30,560 --> 01:25:32,960 Speaker 1: player's handbook with the duct tape holding it together. And 1673 01:25:33,160 --> 01:25:35,280 Speaker 1: you know by the time, yeah, I mean, you know, 1674 01:25:35,520 --> 01:25:37,760 Speaker 1: my son taught my son. My daughter played for a 1675 01:25:37,800 --> 01:25:39,600 Speaker 1: little while, but wasn't her a thing. But right, and 1676 01:25:39,680 --> 01:25:42,519 Speaker 1: now now we're continuing a uh. I started a little 1677 01:25:42,560 --> 01:25:44,439 Speaker 1: club in town, so we got a few people playing 1678 01:25:44,479 --> 01:25:46,559 Speaker 1: every other Saturday. So it's fun. It was a good 1679 01:25:46,560 --> 01:25:46,880 Speaker 1: thing to do. 1680 01:25:47,120 --> 01:25:50,080 Speaker 2: That sounds like fun. Tell us about your mentors who 1681 01:25:50,200 --> 01:25:51,799 Speaker 2: helped shape your career. 1682 01:25:52,680 --> 01:25:54,760 Speaker 1: Yeah, sure, I mean, you know, obviously all the people 1683 01:25:54,800 --> 01:25:57,120 Speaker 1: I mentioned earlier in the podcast. Of course, you know 1684 01:25:57,200 --> 01:26:02,160 Speaker 1: my dad, Marriyan Bartel's uh uh, you know my boss 1685 01:26:02,200 --> 01:26:05,920 Speaker 1: at Whereamar Huff, Stephan Haber, very very you know, helped me, 1686 01:26:06,680 --> 01:26:09,320 Speaker 1: you know, steer again into the fundamental side of the business, 1687 01:26:09,439 --> 01:26:12,720 Speaker 1: you know, as far as like technical analysts and things 1688 01:26:12,760 --> 01:26:15,599 Speaker 1: like that. Books I've read, I mean, mostly influential by 1689 01:26:15,680 --> 01:26:19,559 Speaker 1: John Murphy, Martin Bring, and doctor Alexander Elder. I mean 1690 01:26:19,600 --> 01:26:23,720 Speaker 1: that's those are my go tos as far as uh yeah, 1691 01:26:23,840 --> 01:26:26,120 Speaker 1: the Norman Farce back too. I have that book Stock 1692 01:26:26,200 --> 01:26:27,800 Speaker 1: Market Logic. I love that book. I open. 1693 01:26:28,000 --> 01:26:29,599 Speaker 2: I have that book. I've had that for a long time. 1694 01:26:29,640 --> 01:26:32,840 Speaker 2: It's very really an interesting book. So since you mentioned books, 1695 01:26:33,560 --> 01:26:36,160 Speaker 2: what what are you reading currently? What do you read 1696 01:26:36,240 --> 01:26:36,559 Speaker 2: for fun? 1697 01:26:37,240 --> 01:26:41,840 Speaker 1: Well, I mean right now, yeah, it's a I don't 1698 01:26:41,840 --> 01:26:44,040 Speaker 1: want to sound too dorky, but it's really it's a 1699 01:26:44,080 --> 01:26:46,479 Speaker 1: dungeon and dragon. It's what's the name of the book, 1700 01:26:48,760 --> 01:26:51,200 Speaker 1: Water Deep Dragon Heist, Water. 1701 01:26:51,120 --> 01:26:54,479 Speaker 2: Deep Dragon Heist. So that doesn't sound dorky at all. 1702 01:26:56,040 --> 01:26:58,320 Speaker 1: Now, it's a part of the adventure and stuff like 1703 01:26:58,400 --> 01:27:01,800 Speaker 1: that that you know, running the running the campaign through. 1704 01:27:02,680 --> 01:27:06,920 Speaker 2: By the way, I know guys in our industry that 1705 01:27:07,040 --> 01:27:10,200 Speaker 2: you would never in a million years. Guess still do 1706 01:27:10,360 --> 01:27:13,080 Speaker 2: a weekly d Dungeons and Dragons and have for like 1707 01:27:13,240 --> 01:27:14,160 Speaker 2: twenty thirty years. 1708 01:27:14,280 --> 01:27:17,240 Speaker 1: Geez, sign me up. I'd do that in a second. 1709 01:27:17,479 --> 01:27:19,880 Speaker 1: It's fun now. But other than that, I mean, obviously, 1710 01:27:20,439 --> 01:27:22,600 Speaker 1: when I was in college, you know, part of the 1711 01:27:22,720 --> 01:27:25,919 Speaker 1: English writing major is you had to take literature classes. 1712 01:27:26,920 --> 01:27:30,240 Speaker 1: And my favorite literature classes was the epic hero So 1713 01:27:30,920 --> 01:27:33,960 Speaker 1: it was The Hobbit, Lord of the Rings. You know. 1714 01:27:34,000 --> 01:27:35,719 Speaker 1: Of course I read the Hobbit prior to that class, 1715 01:27:35,720 --> 01:27:36,880 Speaker 1: but I read it again. I read some of the 1716 01:27:37,040 --> 01:27:39,160 Speaker 1: Lord of Rings prior to that class. It was a 1717 01:27:39,360 --> 01:27:41,120 Speaker 1: lot of intense reading. I mean, it's Lord of the Rings. 1718 01:27:41,479 --> 01:27:43,200 Speaker 1: I can't even say it, this Summarian, I can't even 1719 01:27:43,240 --> 01:27:47,679 Speaker 1: say it. But and then also the Odyssey and the Iliad. Sure, 1720 01:27:47,880 --> 01:27:53,360 Speaker 1: and in high school I read the Iliad in Latin. 1721 01:27:54,880 --> 01:27:57,800 Speaker 2: You're not fluent in Latin, no, no, no, no, that's 1722 01:27:58,600 --> 01:27:59,360 Speaker 2: it was high school. 1723 01:27:59,600 --> 01:28:01,879 Speaker 1: But it did help me out with the English language, 1724 01:28:01,960 --> 01:28:03,600 Speaker 1: so which was what you know, a lot of the 1725 01:28:03,920 --> 01:28:09,200 Speaker 1: words get derived from Latin, and you know, and obviously 1726 01:28:09,320 --> 01:28:11,960 Speaker 1: German too, so I did take some German in college. 1727 01:28:12,360 --> 01:28:15,479 Speaker 1: Unfortunately forgot most of that as well. 1728 01:28:15,640 --> 01:28:19,240 Speaker 2: But that's really that's really interesting. So let's let's jump 1729 01:28:19,280 --> 01:28:22,559 Speaker 2: to our final two questions. What sort of advice would 1730 01:28:22,560 --> 01:28:25,720 Speaker 2: you give to a recent college grad interested in a 1731 01:28:25,840 --> 01:28:29,120 Speaker 2: career in either finance or technical analysis? 1732 01:28:30,240 --> 01:28:34,320 Speaker 1: Well, I mean finance, I think, believe it or not, 1733 01:28:34,680 --> 01:28:40,480 Speaker 1: specially we are now. Creativity is very important. Also, curiosity 1734 01:28:40,560 --> 01:28:44,599 Speaker 1: is very important. When I was looking for a job 1735 01:28:44,680 --> 01:28:49,519 Speaker 1: in finance, coming from a different background, it was tougher, 1736 01:28:49,720 --> 01:28:54,479 Speaker 1: you know, and I just didn't I really, I didn't 1737 01:28:54,479 --> 01:28:58,679 Speaker 1: really start making headway until I was up on the news, 1738 01:28:59,400 --> 01:29:02,160 Speaker 1: you know, the Wall Street Journal and consistently reading that 1739 01:29:02,360 --> 01:29:04,120 Speaker 1: for like a month. Then I was ready to go 1740 01:29:04,200 --> 01:29:06,719 Speaker 1: in and talk to people about careers to some extent, 1741 01:29:06,800 --> 01:29:08,600 Speaker 1: you know, obviously not an expert on anything, but just 1742 01:29:09,320 --> 01:29:10,280 Speaker 1: expressing the interest. 1743 01:29:10,360 --> 01:29:14,280 Speaker 2: But I would say not meaning not not professionally relying 1744 01:29:14,360 --> 01:29:17,160 Speaker 2: on the media for information, but to be able to 1745 01:29:17,200 --> 01:29:20,320 Speaker 2: have interview an intelligent conversation. 1746 01:29:20,040 --> 01:29:23,240 Speaker 1: Because that comes up. I mean, because when we interview people, 1747 01:29:23,840 --> 01:29:27,479 Speaker 1: you know, there's always you know, there's always Hey, did 1748 01:29:27,520 --> 01:29:29,640 Speaker 1: you read that story in a while? And Most of 1749 01:29:29,680 --> 01:29:31,559 Speaker 1: the time people say, no, I don't do that, listen 1750 01:29:31,560 --> 01:29:34,200 Speaker 1: to podcasts, but they still get the same information, you know, 1751 01:29:34,520 --> 01:29:35,840 Speaker 1: similar information. 1752 01:29:35,720 --> 01:29:39,439 Speaker 2: Not quite as in depth, not quite as you know focused. 1753 01:29:39,560 --> 01:29:43,000 Speaker 2: But that's a good advice. Going prepared and be able 1754 01:29:43,040 --> 01:29:46,400 Speaker 2: to talk about that you're up to speed and ready 1755 01:29:46,479 --> 01:29:49,040 Speaker 2: to start knowing what's happening. 1756 01:29:49,120 --> 01:29:51,280 Speaker 1: And whenever I interview people, I always want to know 1757 01:29:51,360 --> 01:29:54,320 Speaker 1: what they're doing outside of business and finance. Could I 1758 01:29:54,400 --> 01:29:56,720 Speaker 1: find that more interesting in some regards? You know, it's like, 1759 01:29:56,800 --> 01:29:59,200 Speaker 1: you know, if you have like I think, let me 1760 01:29:59,280 --> 01:30:02,679 Speaker 1: think the last like if they were professional cross player, 1761 01:30:02,760 --> 01:30:05,559 Speaker 1: not professional, a college Division one lacrosse prayer, that's kind 1762 01:30:05,560 --> 01:30:07,479 Speaker 1: of interesting. You know, it's like they know how to 1763 01:30:07,520 --> 01:30:09,680 Speaker 1: be part of a team. You know, you know some 1764 01:30:09,800 --> 01:30:11,800 Speaker 1: of those intangibles. So I would say, you know, some 1765 01:30:11,880 --> 01:30:15,200 Speaker 1: of the intangibles and things outside you know, you know, 1766 01:30:15,320 --> 01:30:18,280 Speaker 1: are interesting. I mean, somebody looking to get into technical analysis, 1767 01:30:18,320 --> 01:30:20,920 Speaker 1: I mean I would say, probably avoid that, like the plague, 1768 01:30:21,439 --> 01:30:26,000 Speaker 1: why not? I mean, are there a lot of technical 1769 01:30:26,120 --> 01:30:29,560 Speaker 1: analysts on the street these days? You know? Probably not. 1770 01:30:30,160 --> 01:30:32,040 Speaker 1: You know, you can count them on maybe two hands. 1771 01:30:32,720 --> 01:30:36,800 Speaker 1: But I would say, if you want to get a 1772 01:30:36,960 --> 01:30:43,000 Speaker 1: role in finance or as an analyst or as you know, 1773 01:30:43,120 --> 01:30:49,200 Speaker 1: financial advisor. Learning technicals will save you, it will help 1774 01:30:49,280 --> 01:30:50,960 Speaker 1: you a ton, but you're not going to be getting 1775 01:30:51,000 --> 01:30:53,679 Speaker 1: a role as a technical analyst. It's just that there's 1776 01:30:53,760 --> 01:30:57,040 Speaker 1: just not that many of them, and often they're just 1777 01:30:57,200 --> 01:30:59,400 Speaker 1: placed at the back of the bus. And as Ralph 1778 01:30:59,439 --> 01:31:01,760 Speaker 1: affanpoor Or said, that's where they have the beer is. 1779 01:31:01,800 --> 01:31:04,080 Speaker 1: So I'm perfectly happily being in the back of the bus. 1780 01:31:04,560 --> 01:31:07,320 Speaker 1: But still, I mean, I would say, you know, again, 1781 01:31:07,360 --> 01:31:09,800 Speaker 1: here's another quote. I don't remember who I heard this 1782 01:31:09,880 --> 01:31:13,080 Speaker 1: one from, but it says the CFA designation will get 1783 01:31:13,120 --> 01:31:15,680 Speaker 1: you a job, but the CMT designation will allow you 1784 01:31:15,800 --> 01:31:19,120 Speaker 1: to keep your job. So I look, I mean, if 1785 01:31:19,160 --> 01:31:21,360 Speaker 1: you want to become a technical analyst and work at 1786 01:31:21,360 --> 01:31:26,240 Speaker 1: a Bowls Bracket research firm as a technical analyst, it's unlikely. 1787 01:31:26,800 --> 01:31:28,719 Speaker 1: You know, I'm very lucky to be sitting where I'm sitting. 1788 01:31:28,800 --> 01:31:30,720 Speaker 1: You know, it's like and who knows how long it's 1789 01:31:30,760 --> 01:31:32,640 Speaker 1: gonna last, you know what I mean, It's like, you know, 1790 01:31:32,720 --> 01:31:34,400 Speaker 1: I mean the business is tough. 1791 01:31:34,520 --> 01:31:36,679 Speaker 2: I mean, yeah, I know, it's definitely and it's gotten 1792 01:31:36,760 --> 01:31:41,320 Speaker 2: tougher on the institutional cell side because of the advent 1793 01:31:41,479 --> 01:31:44,280 Speaker 2: of either free or practically free trading. 1794 01:31:44,560 --> 01:31:46,800 Speaker 1: But it's very interesting though, because you run into a 1795 01:31:46,880 --> 01:31:49,719 Speaker 1: lot of folks on the institutional side that aren't technical 1796 01:31:49,800 --> 01:31:53,800 Speaker 1: analysts but use technical analysis, and some of them, you know, 1797 01:31:53,920 --> 01:31:57,759 Speaker 1: even pursue the CMT designation, which is Charter market technician, 1798 01:31:57,800 --> 01:32:00,880 Speaker 1: the credential that's the equivalent of the the CFA Charter 1799 01:32:01,000 --> 01:32:05,479 Speaker 1: financial analyst, and you know they do it. I would say, 1800 01:32:05,479 --> 01:32:08,040 Speaker 1: if you're interested in a career where you're going to 1801 01:32:08,080 --> 01:32:10,479 Speaker 1: be doing some technicals, I mean, obviously a trading desk 1802 01:32:10,560 --> 01:32:13,360 Speaker 1: type of role might be suited for that. An equity 1803 01:32:13,400 --> 01:32:16,439 Speaker 1: analyst would be suited for you know, I know a 1804 01:32:16,479 --> 01:32:20,799 Speaker 1: few equity analysts that do not that they're making fundamental 1805 01:32:20,880 --> 01:32:24,679 Speaker 1: views based on technicals, but if they want to upgrade 1806 01:32:24,680 --> 01:32:26,439 Speaker 1: a stock and they look at a chart saying, wow, 1807 01:32:26,439 --> 01:32:28,360 Speaker 1: I love the fundamentals on this company, but the chart 1808 01:32:28,439 --> 01:32:30,519 Speaker 1: looks like it can break below fifty and head to 1809 01:32:30,600 --> 01:32:32,439 Speaker 1: forty five, maybe I should wait for that to happen. 1810 01:32:32,760 --> 01:32:36,120 Speaker 2: Let me ask you a question that I love asking 1811 01:32:36,240 --> 01:32:40,640 Speaker 2: people who use both fundamentals and charts. If you're going 1812 01:32:40,720 --> 01:32:44,760 Speaker 2: to buy a stock and in our hypothetical you can 1813 01:32:45,040 --> 01:32:49,559 Speaker 2: only either read a fundamental research report or look at 1814 01:32:49,600 --> 01:32:51,160 Speaker 2: the chart. Which do you do? 1815 01:32:51,840 --> 01:32:54,720 Speaker 1: Yeah, that's obvious because it's look at the chart, no 1816 01:32:54,880 --> 01:32:59,000 Speaker 1: question why, Because the chart reflects fundamental information. I don't mind. 1817 01:32:59,200 --> 01:33:01,120 Speaker 1: I mean, look what is the price reflect It reflects 1818 01:33:01,840 --> 01:33:04,120 Speaker 1: you know, you know, a little bit of the funny 1819 01:33:04,120 --> 01:33:06,439 Speaker 1: money from the high frequency trading, which we have no 1820 01:33:06,600 --> 01:33:10,040 Speaker 1: idea what that's all about. But it also reflects people's 1821 01:33:10,080 --> 01:33:12,920 Speaker 1: opinion on price action to summary some extent. But it 1822 01:33:13,000 --> 01:33:16,479 Speaker 1: actually reflects what fundamentals are to some extent too, you know, 1823 01:33:16,720 --> 01:33:21,960 Speaker 1: So it's psychology and you know what actual factual information is. 1824 01:33:22,080 --> 01:33:25,679 Speaker 1: I mean, it's discounting what the fundamentals are or will 1825 01:33:25,760 --> 01:33:29,080 Speaker 1: be in the future. So you know, I would say, 1826 01:33:30,560 --> 01:33:33,200 Speaker 1: you know, you could have an analyst note saying sell 1827 01:33:33,280 --> 01:33:37,519 Speaker 1: this stock like it's you know, it's unholdable or you know, 1828 01:33:37,800 --> 01:33:39,880 Speaker 1: hard sell on this name, but you look at a 1829 01:33:39,960 --> 01:33:41,639 Speaker 1: chart and it looks like it's forming a double bottom. 1830 01:33:42,120 --> 01:33:44,040 Speaker 1: I may look at the chart more so on the 1831 01:33:44,080 --> 01:33:46,920 Speaker 1: fundamentals because you know, if the chart works, guess what 1832 01:33:47,000 --> 01:33:47,880 Speaker 1: that analyst has to do. 1833 01:33:49,000 --> 01:33:52,200 Speaker 2: We'll eventually you have to change that sell to a hold, 1834 01:33:52,240 --> 01:33:53,200 Speaker 2: and that hold to a buy. 1835 01:33:53,479 --> 01:33:55,720 Speaker 1: And if there's forty of these analysts doing that over 1836 01:33:55,760 --> 01:33:57,680 Speaker 1: a period of time, guess where that stock's gonna go. 1837 01:33:57,920 --> 01:34:01,439 Speaker 2: Do you look at you know, the analysts collective ratings, 1838 01:34:01,479 --> 01:34:03,400 Speaker 2: how many buys, how many sells, how many holds? 1839 01:34:03,720 --> 01:34:07,200 Speaker 1: I do say, yeah, there's there's a feature in n R. Yeah, 1840 01:34:07,240 --> 01:34:10,000 Speaker 1: exactly an R. And also there's like I have this 1841 01:34:10,760 --> 01:34:14,680 Speaker 1: recommendation ratio line on my Bloomberg chart I pull up 1842 01:34:14,680 --> 01:34:17,000 Speaker 1: every once in a while. Sometimes I find it really informative, 1843 01:34:17,040 --> 01:34:19,680 Speaker 1: other times I don't. But but there are times when 1844 01:34:20,160 --> 01:34:22,479 Speaker 1: when I can, when I can see a chart like 1845 01:34:22,560 --> 01:34:25,800 Speaker 1: bottoming out and everybody hates it, and then it breaks out, 1846 01:34:25,880 --> 01:34:29,760 Speaker 1: and it's like, it's amazing how the analysts start. And 1847 01:34:29,880 --> 01:34:31,599 Speaker 1: you know, you've got a lot of time when that happened. 1848 01:34:31,600 --> 01:34:33,960 Speaker 1: So I would I would always gravitate towards a chart, 1849 01:34:33,960 --> 01:34:37,479 Speaker 1: and I would say, it's really funny, like even even 1850 01:34:37,560 --> 01:34:41,920 Speaker 1: folks that consider themselves fundamental investors do the same thing. Huh. 1851 01:34:42,120 --> 01:34:45,040 Speaker 2: Really really interesting. And our final question, what do you 1852 01:34:45,120 --> 01:34:47,680 Speaker 2: know about the world of investing today? You wish you 1853 01:34:47,800 --> 01:34:50,360 Speaker 2: knew twenty five years or so ago when you were 1854 01:34:50,400 --> 01:34:51,320 Speaker 2: first getting started. 1855 01:34:51,880 --> 01:34:55,400 Speaker 1: Yep, I think the biggest thing I wish I knew 1856 01:34:55,400 --> 01:34:58,519 Speaker 1: when I was first getting started is and you can 1857 01:34:58,760 --> 01:35:02,360 Speaker 1: say it in technical mumbo jumbo and fundamental mumbo jump 1858 01:35:02,400 --> 01:35:05,040 Speaker 1: with the same thing a stock. An oversail stock can 1859 01:35:05,040 --> 01:35:08,080 Speaker 1: always become more over sold, and an undervalue stock can 1860 01:35:08,120 --> 01:35:12,519 Speaker 1: always become more undervalued. And when I learned that, I 1861 01:35:12,640 --> 01:35:15,080 Speaker 1: think things improved a lot. You know, I wish I 1862 01:35:15,120 --> 01:35:15,760 Speaker 1: knew that early on. 1863 01:35:16,280 --> 01:35:18,599 Speaker 2: I learned that as cheap stocks can always get cheaper, 1864 01:35:18,640 --> 01:35:20,759 Speaker 2: and expensive stocks can always get more expensive. 1865 01:35:20,960 --> 01:35:22,960 Speaker 1: Right, Yeah, that's right. That's probably a better way of 1866 01:35:23,040 --> 01:35:23,360 Speaker 1: saying it. 1867 01:35:24,640 --> 01:35:27,680 Speaker 2: Really interesting, Steve, Thank you for being so generous with 1868 01:35:27,760 --> 01:35:31,439 Speaker 2: your time. We have been speaking with Steve Soutmeyer. He 1869 01:35:31,720 --> 01:35:35,800 Speaker 2: is the chief equity technical strategist for b of A Securities. 1870 01:35:36,320 --> 01:35:39,200 Speaker 2: If you enjoy this conversation, well check out any of 1871 01:35:39,240 --> 01:35:42,920 Speaker 2: the previous five hundred interviews we've done over the past 1872 01:35:43,040 --> 01:35:48,800 Speaker 2: nine years. You can find those at Apple Podcasts, Spotify, YouTube, 1873 01:35:49,120 --> 01:35:52,840 Speaker 2: wherever you find your favorite podcasts. Sign up from my 1874 01:35:52,960 --> 01:35:56,040 Speaker 2: daily reading list at ridolts dot com, follow me on 1875 01:35:56,160 --> 01:35:59,840 Speaker 2: Twitter at ridolts, follow all of the Bloomberg family of 1876 01:36:00,080 --> 01:36:04,240 Speaker 2: podcast on Twitter at podcast and be sure and check 1877 01:36:04,280 --> 01:36:09,439 Speaker 2: out my new podcast at the Money, coming January first 1878 01:36:09,880 --> 01:36:13,160 Speaker 2: on Apple Podcasts. I would be remiss if I did 1879 01:36:13,200 --> 01:36:15,800 Speaker 2: not thank the Cracked team that helps put these conversations 1880 01:36:15,840 --> 01:36:20,720 Speaker 2: together each week. Rich Subnati is my audio engineer at 1881 01:36:20,760 --> 01:36:25,360 Speaker 2: Tika Vlvron is our project manager. Anna Luke is my producer. 1882 01:36:25,960 --> 01:36:30,000 Speaker 2: Sean Russo is my researcher. I'm Barry Rittolts. You've been 1883 01:36:30,080 --> 01:36:33,160 Speaker 2: listening to Masters in Business on Bloomberg Radio.