S&P 500: Is This the 2008 Crash in Reverse?

VIX 50 Peak Has Marked Key Equity Lows - S&P Swing Pivots and Where We Added Risk in Asia

S&P Support Signals and the Path into March

NASDAQ 100: The 15-Year Tech Bull Market Is Ending

S&P 500: Major Targets Reached, Warning Signals Forming

Managing Director, MTS Research

Peter Beuttell

Managing Director

MTS Research

MTS Research Limited is an independent investment research company specialising in technical analysis. 

MTS Research provides technical analysis services in the form of regular publications and consultancy advice, catering for a number of different investment approaches from absolute or relative returns to long-only and long/short.  The company has a global client base of blue-chip financial institutions ranging in size and stretching from Los Angeles to Tokyo, via New York, London, Frankfurt and Hong Kong.  

MTS was founded in 1989 at the request of Morgan Grenfell Investment Services Limited (MGIS), the ERISA arm of Morgan Grenfell Asset Management (subsequently Deutsche Asset Management), by Peter Beuttell, a Portfolio Manager at MGIS between 1987 and 1989. 

Peter is a qualified Chartered Accountant and self-taught market technician with over 30 years experience.  At MGIS, Peter managed money in European, Australasian and Far East markets for US clients, such as American Airlines and American Petrofina.  He achieved first quartile perfomance on their behalf by blending fundamental and technical analysis in his investment decision-making.  

After an initial focus on the EAFE markets (Europe, Australasia and Far East), the company has recently expanded its coverage to include the Americas, thanks to the recently-completed two-year Knowledge Transfer Partnership with the University of Plymouth.  The resulting software – the Technical Overlay Program (TOP) – allows fund managers to access an immediate Technical view on any market, sector, stock, bond yield, currency or commodity within their selected universe.

MTS Research consists of a team of five based in Penzance and London. 

Technical Analysis

A 120-year History of Extreme Momentum: Is this month’s 30-year record reading in the World Index a sign of bullish acceleration, or bearish exhaustion? This is a very rare event, so what does history tell us?Firstly, that this is a unique juncture in market history, at least in more modern times.Since the inception of the Dow indices in 1897, no bull market has produced this much momentum this late in the cycle. I therefore view it as more likely that the market is in the throes of a buying climax, but one which is not quite complete. A 6% rise from the close when the 8-week RSI hit the 75% mark would put SPX at 3,003 and MXWD at 561.  (The stats in the table suggest this % as a minimum).However, since markets rarely peak on peak momentum (the only exceptions were 1897 and 1968), any sharp correction as buying is exhausted should be followed by at least one more attempt at a new high thereafter.Does this change my view that the Technology bull market is ending?  No.  And if my conclusion about a buying climax is correct, it arguably supports it.  As for NASDAQ 100 being "game over", this confirms that it is probably still in "extra time".  Perhaps I should have said "Game (Nearly) Over" ... If you read the results differently from me, I would love to hear.

A 120-year History of Extreme Momentum: Is this month’s 30-year record reading in the World Index a sign of bullish acceleration, or bearish exhaustion? This is a very rare event, so what does history tell us?Firstly, that this is a unique juncture in market history, at least in more modern times.Since the inception of the Dow indices in 1897, no bull market has produced this much momentum this late in the cycle. I therefore view it as more likely that the market is in the throes of a buying climax, but one which is not quite complete. A 6% rise from the close when the 8-week RSI hit the 75% mark would put SPX at 3,003 and MXWD at 561.  (The stats in the table suggest this % as a minimum).However, since markets rarely peak on peak momentum (the only exceptions were 1897 and 1968), any sharp correction as buying is exhausted should be followed by at least one more attempt at a new high thereafter.Does this change my view that the Technology bull market is ending?  No.  And if my conclusion about a buying climax is correct, it arguably supports it.  As for NASDAQ 100 being "game over", this confirms that it is probably still in "extra time".  Perhaps I should have said "Game (Nearly) Over" ... If you read the results differently from me, I would love to hear.  

Dow Jones Industrial Average (INDU INDEX)

World Index: A 120-Year History of Extreme Momentum

MSCI ACWI Index

World Index: A 120-Year History of Extreme Momentum