STAX Schwab Trading Activity Index & Kirk's Dow vs Oscillators Charts

Here is a graph of the STAX Schwab Trading Activity Index Over Time, from January 2019 through Today.

Note that even with the markets at record highs last week, the STAX remains closer to a 6-year low than a 6-year high. 

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Kirk's DJIA vs Oscillators Chart: "Everything before the black dot-dash line is math, everything after is art" and art is aka "guestimates"

Market Update for 11/8/24

Kirk Lindstrom's Investment Letter

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For more information on the STAX, see https://www.schwab.com/investment-research/stax/view-schwab-trading-activity-index

STAX Schwab Trading Activity Index Midband with Markets at Record Highs

Here is a graph of the STAX Schwab Trading Activity Index Over Time, from January 2019 through Today.

Note that even with the markets at record highs today, the STAX is closer to a 6-year low than a 6-year high. 

Market Update for 11/8/24

Kirk Lindstrom's Investment Letter

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Stock Market vs. US Fed Funds Rate 1993 to 2024

US Stock Markets (Log Scale) vs. Fed Funds Rate and some other charts I use to help find good times to take profits then use those profits to buy back shares when the markets decline.

STAX Schwab Trading Activity Index Over Time - January 2019 through Today

II Sentiment: Investors Intelligence Bulls / (Bulls+Bears) & S&P 500 Weekly

DJIA vs Oscillators

The Federal Reserve lowered interest rates by 0.50% and their preferred measure of inflation, PCE, came in at 2.2% (but 2.7% if you ignore food and energy inflation.)

Many are excited by this news thinking the Fed has inflation heading back to 2.0%, but... note that core inflation is not dropping and has actually risen to its May 2024 level after being lower in June and July.

Kirk Lindstrom's Investment Letter

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US Treasury Rates and Yield Curve

  US Treasury Interest Rate graphs from 1/1/94 through 9/7/24

US Treasury Yield Curve
from https://www.ustreasuryyieldcurve.com/ 

US Treasury Interest Rates

From https://home.treasury.gov/ 

TIPS:

Kirk Lindstrom's Investment Letter

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Kirk's Latest Investor Sentiment & Other Charts

Market Sentiment Update 

Read  Kirk Lindstrom's Investment Letter to see what these charts meant to me plus the full list of stocks and ETFs are in my "Explore Portfolio" with my price targets to both take profits or buy more shares, depending on market conditions, prices, sentiment and other factors.

Investors Intelligence Bulls / (Bulls+Bears) & S&P 500 Weekly  -  8/8/24

AAII Survey: Bulls & Bears

CPC Put Call Ratio 

Fear and Greed Index Fell to 20 this week and is currently at 22:

From https://www.cnn.com/markets/fear-and-greed

NAAIM EXPOSURE INDEX = 83.93: 

• The NAAIM Exposure Index represents the average exposure to US Equity markets reported by our members.
• https://naaim.org/programs/naaim-exposure-index/

2C-p = 7.8 is VERY Low:  

Invented by Tom Drake, the 2CS-p is the "5 day moving average of the product of the vix and p/c ratio."   The scale runs from 0 to 100% with 0% max bullishness and 100% max bearish reading for us contrarians.

To calculate 2C-p, Larbro explains: "Take each days p/c ratio and multiply it by that days vix. Take the sum of those results for that day and the previous 4 (5 total) and percentage rank them from 0% to 100% in terms of size against all the other data you have. The higher the numbers (5 day sum of p/c x vix), the higher the ranking. Then subtract that % ranking from 100% to "invert" the ranking so that lower 2c-p correspond to lows in the market and vice versa.

In my case they are ranked from today all the way back to Feb 10, 2003, the earliest I have data for. So in a nutshell if yesterday's 2c-p was 7.8% (which it is) that tells you that only 7.8% of the sum of the 5 day p/c x vix (aka the 2c-p) is lower than yesterdays value."

These charts are covered on page 6 of my newsletter with updates during the year for what the different types of sentiment charts mean to me. This is an easy place to give my subscribers updates of charts too numerous to add each month, especially after significant changes.                                                    

For more on investor sentiment and what it means to me, read my newsletter where 

• Page 6 is dedicated to a monthly update on sentiment.
• Page 12 summarizes sentiment and how it relates to five other "Market Factors" I follow to help set my asset allocation..

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Excerpt from my August 2024 Newsletter:

This is not an “exact science” so “all or nothing” market timing is foolish.

Market Timing Disclaimer: No sentiment indicator, or any indicator for that matter, is 100% reliable. I look at sentiment as head winds and tail winds. When sentiment is terrible, then it acts like a tail wind for your returns where you could see further declines, but long term, it is best to be buying when most others are selling. Likewise, if we see sentiment get too bullish, then I would consider lowering my portfolio asset allocation. It seldom pays to be buying stocks when EVERYONE is talking about stocks and how much money they are making at cocktail parties.

In addition, I am not market timing but for a small portion of my Explore Portfolio. I use market-timing indicators to tell me it is a good time to buy so I can add to positions when the market is down and thus help me overcome my fear to rebalance back to my target asset allocation. Likewise, when the market-timing indicators are saying to sell, they usually come when the markets are high where I want to be taking profits. The market timing indicators at market highs help me get over my greed and take profits.

Treasury Revenue Soars Again, but Deficit Grows by Another $347 Billion

Kirk's 6/12/24 Deficit Spending Update: For FY 2024 to date, total taxes and other revenues collected YTD are up 9.8% year-over-year.  The "good news" is SPENDING grew at "only" 8.0%!  This means the deficit is growing a "slower rate." 

The problem is during periods of economic growth like we've had for several years, we should be paying down debt by keeping spending below revenue, but we're doing the opposite.

After rising 10.3% in April 2024 vs April 2023, US Treasury revenue grew another 9.8% in May 2024 compared with May 2023.  The trouble is spending grew at 8.0% and remains well above revenue.  

Summary

Stated as a household budget by dividing by 40,000,000:

Inflation is a lazy government's way to raise taxes by pushing us into higher tax brackets while the spenders use borrowed money to buy vote for reelection without regard for what is good for the country.  Understanding this data is KEY but few take the time to bother.

Kirk Lindstrom's Investment Letter: To see what stocks and ETFs are in my "Explore Portfolio" and get a full list of on my price targets to both take profits or buy more: 

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DATA FROM: https://www.fiscal.treasury.gov/files/reports-statements/mts/mts0524.pdf

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May CPI at 3.3% Is Still Above Fed's 2.0% Target

 Despite President Biden's "Inflation Reduction Act of 2022" (estimated to contain $500B in new spending and tax credits) and the Federal Reserve keeping its Fed Funds Interest Rate at a 20-year high, inflation at 3.3% is 1.3% or 65% above the desired or "target rate" of 2.0%.

CPI-U: This morning the US Bureau of Labor Statistics announced, "The Consumer Price Index for All Urban Consumers (CPI-U) was flat in May on a seasonally adjusted basis, after rising 0.4 percent in April". and "Over the last 12 months, the all-items index increased 3.3 percent before seasonal adjustment."

Core CPI-U: "The index for all items less food and energy rose 0.2 percent in May, after rising 0.3 percent the preceding month" and "The all items less food and energy index rose 3.4 percent over the last 12 months."

Chart: CPI vs Fed Funds Rate vs Expected 10-Yr Inflation from 2004

Chart: CPI vs Fed Funds Rate vs Expected 10-Yr Inflation from 2020

Table: Raw Inflation Data from November 2023:

Kirk Lindstrom's Investment Letter: To see what stocks and ETFs are in my "Explore Portfolio" and get a full list of on my price targets to both take profits or buy more:

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