D.R. Barton Archives - Van Tharp Institute

Getting the Santa Claus Rally Right By, D. R. Barton, Jr.

December 23, 2021 December 23, 2021 / 5 minutes of reading / Leave a Comment

I get a kick out of all the Santa Claus rally references I hear from various writers and reporters. Almost all of them mean “markets rallying, leading up to Christmas”. I’ll call that the Santa Claus rally with a small “r”. The Santa Claus Rally I want to review with you today is the one with a capital “R”. The Santa Claus Rally was first described by the father and son team, Hirsch and Hirsch, in their long-running Stock Trader’s Almanac. And it’s a quite positive indicator, as we’ll see. …

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Don’t Mind the Name, Play the January Effect Now By, D. R. Barton, Jr.

December 9, 2021 December 9, 2021 / 4 minutes of reading / Leave a Comment

Regardless of one’s spiritual leanings, the Christmas season is a time of year that has a different vibe. The pace around us quickens. If you can look past the few curmudgeons at your overly crowded local mall, an attitude of cheerfulness seems to be the pervasive one. And, for those of us who can see past the blatant commercialization that seems to accost us from all directions (since sometime in October…), some of the joy, hope, and love of the season seeps in. Family members are calling to arrange visits …

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Gratitude, Thanksgiving, and the State of the Markets By, D. R. Barton, Jr.

December 3, 2021 December 3, 2021 / 3 minutes of reading / Leave a Comment

Thanksgiving week is seasonally one of the strongest of the year. On Monday, the tech-heavy Nasdaq and the broader S&P 500 followed the time-tested tradition of strong Thanksgiving weeks by notching a new intraday all-time high before pulling back later in the session. In today’s tip, let’s take a look at what could be driving market direction into the end of the year. Then, we’ll wrap up with a quick thought on thankfulness, along with an exercise that I think you’ll find very enriching. Since the October market swoon, I’ve …

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What to Do in a World of Asset Prices Gone Wild By, D. R. Barton, Jr.

November 11, 2021 November 11, 2021 / 3 minutes of reading / Leave a Comment

I’ve never quite understood the bearish crowd that worries “things are going too well.” Yes, I understand reversion to the mean. I also believe that sentiment analysis (too many people on one side of the market or the other) helps point out potential turning points. But over the past 15-20 years, markets have consistently been driven more by the availability of massive amounts of capital infused by central banks than by traditional market fundamentals. Rather than debate the merits (or lack thereof) of Modern Monetary Theory, what I’d like to …

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Market Volatility and Systematic Approach By, D.R. Barton, Jr.

October 14, 2021 October 14, 2021 / 8 minutes of reading / Leave a Comment

I keep a close eye on various volatility measures more than anything else in the markets. Sure, price is king, but without a context for how price is moving, I have a difficult time making decisions. For example, a one-dollar move in the utility Southern Company (SO) is a much bigger deal than a one-dollar move in the more volatile tech/real estate company, Zillow (Z). Currently, even while near a market high, the volatility we see is quite unusual. Textbook technical thinking would tell us that when stocks get volatile …

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Forecast: “Money Storm” Continues Its Downpour By, D.R. Barton, Jr.

September 2, 2021 September 2, 2021 / 3 minutes of reading / Leave a Comment

Almost every week someone asks me whether or not this is the market top and every time I have a similar answer – until the money stops pouring in, none of the “lesser” issues matter very much. Technicals, sentiment, geopolitical issues, Covid news – all of that has had fleeting effects on the equity markets. Why? The power of using the narrative to inform our investing choices is as evident as ever. Today, we’re going to touch on the current narrative briefly and review a few charts that show what …

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Sector Bubble Watch Part II: Stock Watch + Other Risk Assets By, D.R. Barton, Jr.

August 3, 2021 August 3, 2021 / 2 minutes of reading / Leave a Comment

Earlier this month, we talked about recent and potential future financial bubbles. There has been, what I’ve called, a “money storm” in the U.S. (and similarly in many other countries) coming from continued Federal Reserve monetary stimulus and from fiscal stimulus delivered by congress. Here’s a picture of the ongoing massive expansion of the Fed’s monetary injection: Note that the current amount of Fed Total Assets is $8.24 trillion—an incredible 9x times bigger than September 2008. We know that congress has provided three rounds of stimulus to combat the economic …

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Current and Coming Bursting Bubbles By, D. R. Barton, Jr.

July 8, 2021 July 8, 2021 / 3 minutes of reading / Leave a Comment

Greetings from Old Orchard Beach in Maine. I’m up in the lovely Pine Tree State with my wife visiting my brother-in-law and we decided to go to spend a few days in the lovely “old school” beach community and, of course, to eat lobster. Lobster rolls, whole lobsters, lobster salad—I’m not picky… I’ve shared before how expensive traveling has become in this post-COVID lockdown period, where pent-up demand has exploded for anything travel-related. Maine is no exception. Several months ago, I looked up prices to rent a car in anticipation …

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A New Class of Risk On Assets By, D. R. Barton, Jr.

June 24, 2021 June 24, 2021 / 3 minutes of reading / Leave a Comment

Back in 2019, I wrote of series of articles about bitcoin and declared that traders and investors were treating it as its own asset class. That part has not changed. When we look at bitcoin action today, it does not directly correlate for any length of time with any other asset class. But what is interesting (and tradeable) is the cycle that crypto has with the S&P 500—from negatively correlated (moving in opposite directions), to uncorrelated (price moves having no relationship to each other), to moderately correlated (prices moving together …

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Inflation Concerns What Are Traders and Investors to Do? By, D. R. Barton, Jr.

June 10, 2021 June 10, 2021 / 3 minutes of reading / Leave a Comment

A month ago, I wrote about inflation concerns that had pushed the markets down to key support levels in an article entitled “Is Inflation Transitory and Can the S&P 500 Hold the Line?” Here is the original “hold the line” chart: And now we have the answer to that question: The line held, coinciding directly with the reduction in inflation fears. Today I’m going to run you through a “chart-heavy” look at some inflationary forces and make the case that market participants are betting, for the near to intermediate-term, that …

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