Market On Open - Monday 10 March
DISCLAIMER: This note is intended for US recipients only and, in particular, is not directed at, nor intended to be relied upon by any UK recipients. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Cestrian Capital Research, Inc., its employees, agents or affiliates, including the author of this note, or related persons, may have a position in any stocks, security, or financial instrument referenced in this note. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice. Companies referenced in this note or their employees or affiliates may be customers of Cestrian Capital Research, Inc. Cestrian Capital Research, Inc. values both its independence and transparency and does not believe that this presents a material potential conflict of interest or impacts the content of its research or publications.
Positive Divergence
by Alex King, CEO, Cestrian Capital Research, Inc
Main Street and Wall Street sometimes coincide, but when they do it’s not usually much more than random coincidence in my view. Securities prices are driven by many factors, of which corporate earnings is one, consumer sentiment another, but trying to adduce the impact of one or another factor on price in the short-, medium or long term is impossible in my view. So whilst the newsflow at present is full of the R-word, I don’t believe there is much r-squared between the news and securities pricing.
In our work at Cestrian we do plenty of fundamental analysis - all of our corporate earnings reports feature in-depth financial perspectives (here). Personally I find it useful to do this to get a read on the overall direction of the economy. GDP numbers are interesting but really you can get a better picture of the real economy from looking at the revenue performance of market-leading companies. If they are all growing healthily then probably the economy is OK; if not, then it probably isn’t.
This is just background though. Fundamentals and valuations and whatnot don’t give you much of an edge in investing. For actual securities analysis, investing and trading I myself obtain far better results using technical analysis (meaning, manual pattern recognition using price and volume charts) or quantitative analysis (meaning, throw price data at a machine and have it figure out where price may move next).
Here’s some examples of how we do this:
Technical Analysis Services
- Long/short e-mini futures, here
- Long/short ETFs and options, here
- Long/short Nasdaq, S&P, Dow, Bonds and Semiconductor, plus 80+ stocks under coverage, personal account trade alerts plus daily long form market analysis, live chat and weekly live webinars, here.
Quantitative Analysis Services
OK - so let’s get into the weeds.
Short- And Medium-Term Market Analysis
If you want this daily dose of pattern recognition, and you aren’t yet a subscriber of course, you can read about and choose from all the subscription services that include this note, here.
Note - if you’re a free member here and thinking about joining our lower-cost Market Insight service, it’s a good idea to do so sooner rather than later. We’re going to be restructuring it for new subscribers so that it is split up into market analysis and earnings analysis, and we’ll be ramping up prices as a result. There will be no change for anyone who is a subscriber prior to the restructuring & price increase. So if you’ve been thinking about joining it, consider doing so now. (If you’re an Inner Circle or RIA Insight Pro service member, you can ignore this - you don’t need Market Insight as you get all that content in your existing subscription).