Treasury Market Indicator Signals Trouble for Stocks

By Dan AmossPosted February 5, 2020

One of the most powerful indicators of a recession looming is a yield curve inversion. As the yield curve continues to slope downward, the Fed will likely react by cutting short-term rates. This could bring another rise in stocks due to speculation, but deteriorating credit conditions could stall another rally.

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Jim Rickards’ Crash Speculator

Dan Amoss

Dan Amoss, CFA, tracks aggressive accounting and other red flags that markets miss. He’s a student of the Austrian School of economics and Daily Reckoning fan since 2000. Agora Financial relies on Dan for macro market commentary as well as profitable plays like his 2008 call to readers to buy Lehman Bros. puts, which...

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Supply Of New Shares Will Depressurize The Bubble

By Dan AmossPosted January 6, 2021

Today’s bulls rest easy with the notion that central banks “have their back.” Central bankers have promised not to raise interest rates for years, so there’s no perceived threat of tighter financial conditions. They shouldn’t rest easy though. Because another slower-moving threat to the overvaluation environment is emerging. A relentless supply of new securities could ultimately be the pin that pricks today’s bubble.

Our Crash Monitor Signals Weakness Ahead for Stocks

By Dan AmossPosted June 12, 2019

After a decade of great returns, investors have been lulled into complacency. The reality is many stocks do not deserve the strong rallies they’ve enjoyed. But it often requires the onset of a recession for weak stocks to enter into a death spiral. Today, Dan discusses one indicator used to predict short-term market performance and downturns in stocks.

Oversaturation of Food Delivery Apps Slams Grubhub

By Dan AmossPosted November 13, 2019

Food delivery apps are a form of restaurant sector disruption and have been highly popular with diners in recent years. However, oversaturation of these apps has led to intense competition and a stunning crash of Grubhub stock in late October. This overinvestment will result in consumers benefiting at the expense of the app companies and restaurants, which will continue putting pressure on their stock prices.

Call Options Are Once Again Driving Stocks

By Dan AmossPosted March 30, 2022

Demand for aggressive, short-dated, out-of-the-money call options on certain stocks has surged in the past two weeks as investors have interpreted the Fed’s hesitance to tighten as an all-clear sign to buy the dip. But this tactic to juice stocks higher with call purchases has a fatal flaw (including for Tesla, one of our positions). Dan discusses in today’s commentary.

When Momentum Stock Darlings Fall Through A Trap Door

By Dan AmossPosted November 11, 2020

We’re at the stage in the bull market when novice investors mistake bubble dynamics for real, sustainable fundamentals. Many of Wall Street’s “darlings” are propped up by hype and narratives instead of solid fundamentals like sustainable earnings, strong balance sheets, and predictable returns on capital. This can cause their stock prices to plummet without warning.

Focus On Process Rather Than Outcomes

By Dan AmossPosted February 2, 2022

Normally the dog of stock prices moves the tail of options prices. But speculative appetite for call options became so enormous in 2020 and 2021 that call buying was substantially increasing stock prices. Like so many things in today's upside-down world, processes and outcomes were inverted. Lacking a diligent process in life can spell trouble, including for investors. Dan also reviews Apple’s quarterly earnings.