I did a very, very interesting study of TLT versus the S&P 500 this morning. I'll let my little chart speak for itself:

Back on January 16th I wrote a post titled "The January Effect" simply stating that the beginning of 2013 looked absolutely identical
to the beginning of 2012.  Given the
selloff over the last week I wanted to go back and see if the 2012 analog was
broken and if it was time to wave the "all clear" flag for the
bears.  Bottom line, the analog is in
full effect and it looks like the bulls have another full month of smooth
sailing ahead.  Again, I'd like to
present the technical analysis via charts with numbers (the numbers are
markers, not wave counts).

2012

(more…)

I've been buying and driving cars for twenty years now, and I have steadfastly bought Japanese, German, and Swedish cars. I have always had a deep disdain for the design and features of American automobiles, and the only times I've been forced to drive them – – – during rare business trips by way of rental cars – – my negative feelings toward them were only strengthened.

The spell is broken, however, with my new Tesla. I put the reservation in on this last year, and I picked it up today at the factory (after receiving a full tour of the place). Here's a fun fact: when General Motors went into bankruptcy in 2008, they did a fire sale of the huge auto plant in Fremont. The land and physical plant were on the books for $1 billion. Tesla bought the place for $42 million. How's that for a great bargain?

So here is my new all-electric, ungodly fast vehicle:

Of course, it's more of a computer that comes with a car rather than the other way around. I'll be able to stay on top of things no matter what:

The January Effect, like its equally annoying cousin, the
Santa Claus Effect, is another delightful phrase to remind us all to continue
buying every equity that isn't nailed down. 
So let's look at this current January to see how things are
progressing.  First, buyers are supposed
to take advantage of lower December prices. 
Check.  Second, small cap stocks
are supposed to outperform in this environment. 
Check.  Third, the effect is
supposed to be strongest in the third year of a President's term (2011).  Check. 
I'd like to examine the last two Januaries to try and give some guidance
as to how this winter season will play out. 
As usual, I'll be presenting charts with numbers, and as always, the
numbers are just markers for my points, not waves.

2011

The third year of the President's term gave us a January
Effect that was already well underway. 
1.  The November high just
slightly exceeded the high for the year. 
2.  Consolidation to give bears
hope for an end of the year selloff. 
3.  Break to new highs.  4.  An uninterrupted,
three month grind straight higher that absolutely blew the doors off the prior
high. 

(more…)