Halls of Shrewd'm / US Policy❤
No. of Recommendations: 51
My "major bottom" detector did not trigger yesterday April 3. It is pretty rare.
The companion "minor bottom" signal, much more common, did trigger.
Here are all the major bottom signals since 2020.
They tend to come in clusters, so I grouped multiple signals together to keep the post short and sweet. There weren't signals on all of the days in the range shown, but the clustering is pretty clear.
2020-03-23
2022-05-05 to 2022-05-12
2022-07-14
2022-09-23 to 2022-09-29
...and here are the much more frequent minor bottom signal clusters:
2020-03-03 to 2020-03-19
2021-08-19
2021-09-20 to 2021-10-04
2021-11-26 to 2021-12-20
2022-01-24 to 2022-02-04
2022-02-23 to 2022-02-24
2022-05-04 to 2022-05-11
2022-06-23 to 2022-06-30
2022-09-27
2023-10-03 to 2023-10-06
2023-10-25 to 2023-10-27
2024-12-17 to 2024-12-30
2025-01-08 to 2025-01-13
2025-03-31
2025-04-03
After a "minor bottom" signals, average forward market performance is quite good for a month, anyway.
Jim
No. of Recommendations: 4
My short term bottom indicator did not signal yesterday, but I'm sure it will after today's market action (unless there is a miraculous turnaround before the close).
No. of Recommendations: 2
Did you run the bottom detector in the '08-'09, or '01 era? Curious if the major indicator fired then, and how "big" was the register.
I've been talking a lot of folks off the panic ledge in the last couple days. Talking with my daughter about how this could be a minor sale/buying opportunity, of the type I've discussed metaphorically in the past but now we have bona-fide real time numbers to examine.
This was a good week for lessons - NMAX provided some also - I showed her that price is what you pay, value is what you get, and we looked at financials (I am proud that she knew the basics of reading a balance sheet before she was first eligible to vote). And that little number is over 80% off its post-IPO high.
No. of Recommendations: 32
Did you run the bottom detector in the '08-'09, or '01 era? Curious if the major indicator fired then, and how "big" was the register.
Yes.
I've posted all my signals since then, though I guess most of those posts are gone with the wind.
The signals have generally been good since I created the model, the main flaw being that in serious "waterfall" panics it gives some too-early signals on the way down, like 2008-10-07. (even though things were indeed higher a year later)
I have made it a little stricter, trying to filter some of those out, but you start missing things.
There is certainly a whiff of panic in the air, but the signal is still pretty far from triggering. I don't think we're at capitulation. That takes a while.
Because of the clustering of signals, I tend to call it a "buy" on the first day after a stretch of signals that it *doesn't* trigger.
Consider this stretch of major bottom signals:
2022-09-23 major bottom signal triggered
2022-09-26 major bottom signal triggered
2022-09-27 Good day to buy?
2022-09-28
2022-09-29 major bottom signal triggered (a variant older version of the signal also triggered this day, not the others)
2022-09-30 Good day to buy if you missed the first one?
That stretch was the last time it triggered. Great buy signal if I do say so myself.
Jim
No. of Recommendations: 3
Oddly, the short term bottom indicator I'm using did not signal today. (not 'my' indicator, but one I borrowed from someone else).
It has three parts: A VIX Momentum Oscillator, a TRIN 'price' oscillator, and a very short term moving average. When VIX or TRIN cross their signal lines they each add a value of '2'. The moving average crossing its signal line adds '1'. So a total of 5 is often a good short term bottom signal.
Today VIX and the moving average crossed their signal lines but the TRIN PO did not. In fact TRIN moved further away from its signal line. That surprised me.
No. of Recommendations: 4
No. of Recommendations: 36
But CNN's fear/greed indicators would appear to be signaling a bounce soonish?
Eminently plausible.
My gut feel (probably not even positively correlated with reality) is a bounce, but a very much deeper bear yet to come.
The reasons for a likely bounce:
Short term panic signals like mine and CNN's have been firing. And it is not long since a fresh market high, so the usual rule is that true despair takes some time to sink in--drops which are both deep and lasting are vanishingly rare soon after a high. Plus, the weekend will soften the edges of the panic a bit.
But every economic indicator in the world is being revised down as fast as the economists and CEOs can type, and that will have an effect eventually.
Even after the drop of the last couple of days (US equity market value fall equates to $58000 per US household, if they owned 'em all), US valuations are still really stretched, plus the present value of all future earnings really has fallen, and not because of discount rates. The global economy simply won't produce nearly as much stuff in the next 20 years as it would have without recent developments.
I sold about 96% of my US stocks a couple of weeks ago, and sold all the US dollars too. It's a personal thing, but I would not visit the US if you paid me. Everyone I know has cut back their patronage of US retailers and goods by, say, 30-50% or more. My point is that it seems likely that I and my acquaintances are not the only ones in the world with that stance, and it seems unlikely to change within a decade. From a macro point of view, what are the possible consequences for US equity prices? Never rule anything out.
Jim
No. of Recommendations: 4
I sold about 96% of my US stocks a couple of weeks ago, and sold all the US dollars too. It's a personal thing, but I would not visit the US if you paid me. Everyone I know has cut back their patronage of US retailers and goods by, say, 30-50% or more. My point is that it seems likely that I and my acquaintances are not the only ones in the world with that stance, and it seems unlikely to change within a decade. From a macro point of view, what are the possible consequences for US equity prices? Never rule anything out.
It should not have come to this. Such a sad mess.
I'll be traveling to New Zealand in a few weeks for a month-long visit. It will be interesting to see what the Kiwi view of the US is, though I can easily imagine it.
No. of Recommendations: 1
Same here Jim!
Have a good weekend
Astore
No. of Recommendations: 12
Jim - The global economy simply won't produce nearly as much stuff in the next 20 years as it would have without recent developments.
An inciteful simple way to state why neither the US nor the rest of the world markets will do as well and the individuals in those markets will have less as a result.
In my simple-minded understanding limited tariffs can logically be deemed useful to maintain higher employment or enough strategic independence in the event of potential conflicts.
I could fully understand a decision to reduce our overall wealth to keep the rust belt employed if we had an unemployment problem but that wasn’t the current problem.
Most of the GOP politicians know this and have even stated this in the past. Democracy depends on the individuals in power doing what they know is right rather than what will keep them in power.
No. of Recommendations: 16
Everyone I know has cut back their patronage of US retailers and goods by, say, 30-50% or more.
I live in the US, and my family is cutting back. We're thinking, take a summer vacation in Canada or Greenland, not the US. Also spending less in general. I don't want to contribute to the economy of a country that is threating invasion of sovereign democracies any more than I have to.
John
No. of Recommendations: 7
We're thinking, take a summer vacation in Canada or Greenland, not the US.
I am surprised, and touched.
I was at an event a couple of days ago. I got the startling comment from a non-American fellow: "Oh, you're Canadian? I'm so sorry."
Jim
No. of Recommendations: 42
Latest update on my bottom detectors:
2025-03-28 No signal
2025-03-31 Minor bottom signal
2025-04-01 No signal
2025-04-02 No signal
2025-04-03 Minor bottom signal
2025-04-04 Minor bottom signal
2025-04-07 One of my two major bottom detectors triggered, but not the best and oldest "classic" one with all the post discovery history.
Since these signals often trigger several days in a row, the usual rule of thumb is to wait for the first day WITHOUT a signal before becoming a buyer.
However, I see that the futures market is up a whole lot in pre-market, so today (April 8) seems likely to be a bounce day, so for the slightly nimble/aggressive there is a case to buy now, at least for a trade.
Recap of the meanings: the minor bottom signals tend to be pretty good for a bounce of up to a month or so on average, but not much predictive power beyond that time frame.
The classic major bottom detectors are rare and have historically led to good returns for a year, even two on average.
The newer major bottom signal that triggered yesterday could perhaps be considered in the middle...it might not be THE bottom, but it's pretty bottom like. Most recently it gave signals in May, July and September 2022, the last one being 2022-09-29.
The classic major bottom signal (the one with the great history) is pretty stubborn--it would probably need another four bad days before it triggered. To overgeneralize, it is a little uncertain about current situation because, other than yesterday, too many securities have still been doing well. As a result it doesn't smell like capitulation yet.
Jim
No. of Recommendations: 18
I live in the US, and my family is cutting back. We're thinking, take a summer vacation in Canada or Greenland, not the US. Also spending less in general. I don't want to contribute to the economy of a country that is threating invasion of sovereign democracies any more than I have to.
Ditto, and I suspect we are not alone. Cancelled our 7 weeks in NC and heading to Canada for the summer, with a week each in upstate NY and Portland, ME on the way and back. Driving, to maintain as much control as possible in an out of control world. There's only so much we can personally do, but figured we could contribute to the Canadian economy by voting with our pocketbook.
IP
No. of Recommendations: 0
I live in the US, and my family is cutting back. We're thinking, take a summer vacation in Canada or Greenland, not the US. Also spending less in general. I don't want to contribute to the economy of a country that is threating invasion of sovereign democracies any more than I have to.
Has an invasion even been suggested, let alone threatened?
tecmo
...
PS: I am Canadian and find the "51st state" really offensive. There could be plenty of reasons to "boycott" the US but this seems a bit over the top.
No. of Recommendations: 1
Trump is a complete asshole, but that's not really on the United States per se.
We're a big country of disparate populations trying to get along, and frankly it isn't go so well here internally either.
That said, stop being dramatic and just ignore the idiot.
No. of Recommendations: 23
Has an invasion even been suggested, let alone threatened? I think "threaten to take Greenland" is accurate. This could be a military invasion, a treaty, a purchase, an election, or an idle threat. The Mad King, drunk on power, covets Greenland's minerals. He will get them, one way or the other.
=== links ===
Trump fuels Greenland’s independence fight with his talk of seizing the island, March 4, 2025
"Many in this semi-autonomous territory are worried and offended by Trump’s threats to seize control of their mineral-rich homeland, even by force, because he says the U.S. needs it “for national security.” "
https://apnews.com/article/buy-greenland-trump-uni...Trump refuses to rule out use of military force to take control of Greenland and the Panama Canal, January 7, 2025
"Speaking to reporters less than two weeks before he takes office on Jan. 20 and as a delegation of aides and advisers that includes Donald Trump Jr. is in Greenland, Trump left open the use of the American military to secure both territories. Trump’s intention marks a rejection of decades of U.S. policy that has prioritized self-determination over territorial expansion."
“I’m not going to commit to that,” Trump said, when asked if he would rule out the use of the military. “It might be that you’ll have to do something. The Panama Canal is vital to our country.” He added, “We need Greenland for national security purposes.”
https://apnews.com/article/trump-biden-offshore-dr...Remarks By President Trump In Joint Address To Congress, March 6, 2025
"To further enhance our national security, my administration will be reclaiming the Panama Canal, and we’ve already started doing it. (Applause.)"
"And I also have a message tonight for the incredible people of Greenland. (Laughter.) We strongly support your right to determine your own future, and, if you choose, we welcome you into the United States of America. We need Greenland for national security and even international security, and we’re working with everybody involved to try and get it. But we need it, really, for international world security. And I think we’re going to get it. One way or the other, we’re going to get it."
https://www.whitehouse.gov/remarks/2025/03/remarks...December 23, 2024
"... On Sunday, Trump spoke at Turning Point’s AmericaFest in Phoenix, where, as Aaron Rupar of Public Notice recorded, he entered as if he were at a professional wrestling event. He proceeded to deliver a speech much like his campaign speeches.
It had an important new element in it, though, that he had pioneered on social media the night before. He claimed that Panama is not treating the U.S. well, and threatened that he will “demand that the Panama Canal be returned to the United States of America in full, quickly, and without question.” On Sunday he posted on social media that he wants Greenland too. “For purposes of National Security and Freedom throughout the World, the United States of America feels that the ownership and control of Greenland is an absolute necessity.”
Panama’s president, José Raúl Mulino, responded that “every square meter of the Panama Canal and its adjacent zones is part of Panama, and it will continue to be. Our country’s sovereignty and independence are not negotiable.” Prime Minister Mute B. Egede of Greenland said: “Greenland is ours. We are not for sale and will never be for sale. We must not lose our long struggle for freedom.”
To my knowledge, Trump never mentioned taking the Panama Canal or Greenland during the campaign, and such dramatic action will likely undermine the principle that countries can’t just take over weaker neighbors. This principle is central to the United Nations, which holds that territorial integrity and sovereignty are “sacrosanct” and that members “shall refrain…from the threat or use of force against the territorial integrity or political independence of any state.” David Sanger and Lisa Friedman of the New York Times note that Trump’s aggression “reflects the instincts of a real estate developer who suddenly has the power of the world’s largest military to back up his negotiating strategy.”
In a healthy political system, pronouncements from an elderly president-elect that could upend 80 years of foreign policy would spark significant discussion from all quarters."
https://heathercoxrichardson.substack.com/p/decemb...
No. of Recommendations: 10
I'm not Jim and the below doesn't replicate his signals. That said: my hack "extreme short term bottom" has thrown a 2 out of 3 signal the last 3 days in a row - on percent above moving averages.
PAMAS ->
80iss Advs Unch Decl 5D 20D 50D 100D 150D 200D BotTrade Bot2 A/D 10DMA ADV% Watch
4/8/2025 80DN 943 154 4,260 4 4 6 9 11 15 BUY XX 0.22 0.68 0.18 0.33
4/7/2025 1,621 125 3,574 5 5 7 10 14 17 BUY XX 0.45 0.71 0.30 0.34
4/4/2025 80DN 593 151 4,638 4 7 9 13 16 19 BUY XX 0.13 0.93 0.11 0.39
When these extreme levels happen it's *usually* before a short term bounce - as Jim's mentioned. We have no way of predicting whether it's the final bottom (the first is unlikely to be the last) or the last.
FWIW I have put a mere 6% back in hoping for that bounce this week.
FC
No. of Recommendations: 6
Has an invasion even been suggested, let alone threatened?
Yes. Regarding Greenland, Trump said "we need Greenland" and "No, I never take military force off the table,". He also declared that the U.S. would take control of Greenland "one way or the other,".
John
No. of Recommendations: 2
Jim said
"Because of the clustering of signals, I tend to call it a "buy" on the first day after a stretch of signals that it *doesn't* trigger.
Consider this stretch of major bottom signals:
2022-09-23 major bottom signal triggered
2022-09-26 major bottom signal triggered
2022-09-27 Good day to buy?
2022-09-28
2022-09-29 major bottom signal triggered (a variant older version of the signal also triggered this day, not the others)
2022-09-30 Good day to buy if you missed the first one?"
Jim,
Did you have any other signals earlier in 2022? Thanks
No. of Recommendations: 18
Did you have any other signals earlier in 2022? ThanksHere are all the dates of just the strict "classic" bottom detector signal since the start of 1999. I'm not sure when I created this precise model, but it was prior to March 2009 since I used it to call a bottom at that time.
The model can be tuned for sensitivity, so very low numbers would not show up in the list with a slightly different tuning, and more would show up with a more lenient tuning.
The table also shows an arbitrarily scaled strength metric (how extremely bottom-like the day seemed to be at the time) and forward returns for the S&P 500 index over 6, 12, and 24 months.
The usually suggested strategy is to ignore signals multiple days in a row, and not buy till the first day that you DON'T get a signal. Safety first, kids.
There are only 13 distinct signal clusters, counting the start of a cluster as a signal that was more than 6 trading days after the previous one.
The July 2007 cluster was way too early, but otherwise it does seem to be better than random.
Date Strength f6m f1y f2y
2002-07-24 0.2 5% 16% 29%
2008-07-11 3.0 -28% -27% -12%
2008-07-14 17.9 -29% -26% -11%
2008-07-15 46.5 -29% -23% -10%
2008-07-16 28.9 -32% -25% -14%
2008-10-03 90.5 -24% -5% 6%
2008-10-06 100.0 -23% 0% 10%
2008-10-07 98.7 -16% 7% 17%
2008-10-08 98.0 -13% 8% 18%
2008-10-09 99.2 -5% 19% 29%
2008-10-10 98.7 -8% 18% 28%
2008-10-15 8.0 -5% 20% 29%
2008-10-16 81.1 -12% 15% 25%
2008-10-22 85.0 -4% 22% 32%
2008-10-23 93.5 -5% 21% 32%
2008-10-24 96.4 -2% 22% 35%
2008-10-27 88.9 3% 25% 40%
2008-10-28 87.7 -7% 11% 26%
2008-11-11 47.0 0% 23% 35%
2008-11-12 76.4 4% 27% 41%
2008-11-13 82.2 1% 21% 32%
2008-11-17 42.6 6% 30% 39%
2008-11-18 73.8 3% 29% 39%
2008-11-19 82.8 10% 36% 49%
2008-11-20 77.8 20% 45% 58%
2008-11-21 58.8 11% 38% 48%
2009-02-17 4.9 24% 39% 68%
2009-02-18 39.2 25% 40% 69%
2009-02-19 33.6 28% 43% 73%
2009-02-20 78.6 30% 43% 73%
2009-02-23 62.4 38% 47% 77%
2009-02-24 49.1 33% 43% 70%
2009-02-27 52.1 41% 53% 82%
2009-03-02 83.4 46% 59% 85%
2009-03-03 88.6 46% 60% 88%
2009-03-04 38.7 41% 59% 88%
2009-03-05 87.9 46% 66% 93%
2009-03-06 90.9 47% 67% 93%
2009-03-09 80.2 50% 68% 94%
2011-08-08 8.8 20% 25% 51%
2011-08-09 26.0 15% 20% 44%
2011-10-03 21.5 29% 32% 54%
2011-10-04 38.2 24% 29% 49%
2015-09-29 1.7 9% 15% 33%
2016-01-20 26.1 17% 22% 51%
2018-10-23 0.7 7% 10% 26%
2018-10-24 2.5 10% 13% 27%
2018-10-26 5.4 9% 13% 22%
2018-12-20 4.0 19% 31% 50%
2018-12-21 21.0 22% 34% 54%
2018-12-24 29.6 24% 37% 56%
2018-12-26 34.2 20% 33% 52%
2020-03-17 13.9 40% 62% 78%
2020-03-18 28.7 40% 63% 84%
2020-03-19 32.7 38% 61% 83%
2020-03-23 54.3 41% 67% 92%
2022-09-29 2.2 2% 17% 47%
Jim
No. of Recommendations: 3
"Trump,Trump, Trump, Trump, Trump, Trump,Trump, Trump, Trump, Trump"
Does this belong here?
No. of Recommendations: 28
Does this belong here?
Obviously not, but let's all just try to keep generally away from the subject without staring any fights about it : )
It's probably valid to note that many mechanical statistical models should not be assumed to be valid during times of business/economic/geopolitical turmoil this large, as it's not sufficiently analogous to other events within the history we consider.
Jim
No. of Recommendations: 10
It's probably valid to note that many mechanical statistical models should not be assumed to be valid during times of business/economic/geopolitical turmoil this large, as it's not sufficiently analogous to other events within the history we consider.
Yes. Generally when there is an economic calamity (great recession, Covid, excess inflation, tech bubble) there are folks working to improve the situation.
In the current instance, it is not at all obvious that the people running the show want to improve things.
That makes you think that the past is no predictor of the future, which we know anyway.
(There is probably a parallel universe somewhere where today, Mr. Trump doubled down on reciprocal tariffs rather than pause them).
Mark
No. of Recommendations: 29
Latest update on my bottom detectors:
2025-03-28 No signal...
2025-03-31 Minor bottom signal
2025-04-01 No signal
2025-04-02 No signal
2025-04-03 Minor bottom signal
2025-04-04 Minor bottom signal
2025-04-07 One of my two major bottom detectors triggered, but not the best and oldest "classic" one with all the post discovery history.
Just a follow up.
The major bottom detector didn't trigger.
The "newer major bottom" signal isn't really as good as the classic, it's really just an extra strong version of the minor bottom. (confused yet?)
So here is a recap of early April
2025-03-28 No signal
2025-03-31 Minor bottom signal
2025-04-01 No signal
2025-04-02 No signal
2025-04-03 Minor bottom signal
2025-04-04 Minor bottom signal
2025-04-07 Strong minor bottom signal (could be thought of as a newer/worse major bottom signal)
2025-04-08 Strong minor bottom signal (could be thought of as a newer/worse major bottom signal)
2025-04-09 Strong minor bottom signal (could be thought of as a newer/worse major bottom signal)
2025-04-10 No signal
2025-04-11 Minor bottom signal
2025-04-14 No signal
The market was lowest on the 7th, and the lowest close was the 8th.
So, on the theory that you want safety, you'd be buying the first day there was NOT a signal, which would be April 10. It is generally quite evident well before market close.
The US market is up 5.7% since the close on the 10th, so far. Usually the one-month-forward returns are good after such a signal. On average, anyway.
Jim
