Monday, January 26, 2015

SPY And The U.S. Economic Index In 2014: A Guide


“Mirrored by about a zillion data points of light in either AppleWorks or Microsoft Excel spreadsheets on multiple media here at the home office of my Risky Business, changes in the U.S. economy are reflected by changes in its equity market. And vice versa.” So began “You Got to Know When to Hold ’em,” my very first blog post published here back in 2011 on one of the most important methods I employ to assess the relationship between the American economy and the large-capitalization segment of the stock market.

Last year, our droogies at Seeking Alpha published almost a dozen of my articles focused on monthly studies of the relationship between the economy, as represented by the proprietary U.S. Economic Index, and the large-cap segment of the market, as represented by the nonproprietary SPDR S&P 500 ETF (SPY). Links to all the pieces in this series appear below in reverse chronological order.

This year, I plan to expand my coverage in a couple of ways. First, I will complement increasingly the objective facts with my subjective opinions as to their potential meaning in the context of the SPY-USEI relationship. And, second, I will examine the relationship between the economy and the small-cap segment of the market. All the resultant stories will be published at either J.J.’s Risky Business or Seeking Alpha.

I suspect the U.S. Federal Reserve’s actual announcement of the end of asset purchases under its latest quantitative-easing program Oct. 29 and its projected announcement of the beginning of federal-funds-rate hikes April 29 make monitoring of the continuous feedback loop between the economy and the market more significant now than it has been at any other time during the past three years.

SPY And The U.S. Economic Index In 2014: Linkfest













Tuesday, December 23, 2014

Risky Business Monitor: Dec. 22, 2014


The New York Stock Exchange released its data on securities market credit earlier this month than it historically has done most months, so over the weekend I was able to bring up-to-date the levels of my Margin Debt Directional Indicator, or MDDI, and my Securities Market Credit Risk Rank, or SMC Risk Rank, as well as the associated comparison of the historical monthly levels of NYSE margin debt and the SPDR S&P 500 ETF (SPY).

Here are links to all the 2014 articles in this series centered on the risk of speculation in the equity market:














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Shameless Self-Promotion! If you like my work, then you can follow me as J.J. McGrath at Google+ and Seeking Alpha, as JJMcGrath at StockTwits and @JJMcGrath3000 at Twitter. If you do not like my work, then you can follow me at all those places, anyway.

Tuesday, December 16, 2014

Risky Business Monitor: Dec. 15, 2014

Facts are more important than opinions in my world, where I employ the former to grow the latter. A case in point: The U.S. Federal Reserve’s cessation of purchases under the first two of its three formal quantitative-easing programs was associated with significant periods of adjustment in equity prices in all three major market-capitalization classes, so the two consolidations related to the end of purchases under the last one of these programs appear completely unsurprising to me.

During the first consolidation, the SPDR S&P 500 ETF (SPY) intraday declined to $181.92 Oct. 15 from $201.90 Sept. 19, a decrease of -$19.98, or 9.90 percent. During the second (and continuing) consolidation, SPY intraday dipped to $198.78 Monday from $208.47 Dec. 5, a drop of -$9.69, or 4.65 percent. And the most significant thing to me is that these two consolidations likely represent not the end but the beginning of the stock market’s latest period of adjustment, as indicated in these three articles at Seeking Alpha:




Meanwhile, I also had a couple of pieces of interest published at the International Business Times over the weekend, as follows:



As it turned out, of course, it was not Apollo Global Management LLC (APO) but the privately held BC Partners Ltd. and its associates that eventually landed PetSmart Inc. (PETM), as Reuters later reported.

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Shameless Self-Promotion! If you like my work, then you can follow me as J.J. McGrath at Google+ and Seeking Alpha, as JJMcGrath at StockTwits and @JJMcGrath3000 at Twitter. If you do not like my work, then you can follow me at all those places, anyway.

Tuesday, December 9, 2014

Risky Business Monitor: Dec. 8, 2014


Seeking Alpha will make the third of the three data-intensive articles about U.S. Federal Reserve policy mentioned in past Risky Business Monitors publicly available early Wednesday. Because it builds on the framework of the preceding pieces, it may be the most interesting of all.

Meanwhile, here are links to a couple of stories published by Seeking Alpha in the past week:



Related Reading





Shameless Self-Promotion! If you like my work, then you can follow me as J.J. McGrath at Google+ and Seeking Alpha, as JJMcGrath at StockTwits and @JJMcGrath3000 at Twitter. If you do not like my work, then you can follow me at all those places, anyway.

Tuesday, December 2, 2014

Risky Business Monitor: Dec. 1, 2014


The Institute for Supply Management published its November 2014 Manufacturing ISM Report On Business Monday and probably will publish its November 2014 Nonmanufacturing ISM Report On Business Wednesday, which means I soon will be able to bring up-to-date my proprietary U.S. Economic Index and the associated comparison of the historical monthly levels of the USEI and the SPDR S&P 500 ETF (SPY). My article on these data series will appear either at J.J.’s Risky Business or at Seeking Alpha.

Also appearing at either of those locations this week will be the second of the three data-intensive pieces about U.S. Federal Reserve policy I mentioned in the past two Risky Business Monitors.

Meanwhile, here are links to three stories of note published by either the International Business Times or Seeking Alpha in the past week:




Related Reading





Shameless Self-Promotion! If you like my work, then you can follow me as J.J. McGrath at Google+ and Seeking Alpha, as JJMcGrath at StockTwits and @JJMcGrath3000 at Twitter. If you do not like my work, then you can follow me at all those places, anyway.