Tech-Logo_ThumbUngewitter_FloatMark Ungewitter is a Senior Vice President
and Investment Officer at Charter Trust Company.
In this section you will find articles that look
at technical aspects of the market and the economy.

Chart Of The Week: Commodity Prices Vs. Corporate Earnings

By |2016-12-01T15:44:43-04:00August 14th, 2015|Categories: Technical Perspective|Tags: , , |

Summary Commodity crashes are typically associated with severe earnings contractions. Current expectations for flat calendar-year operating results seem overly optimistic in the present environment. A cautious outlook toward second-half earnings is advised. Will collapsing commodity prices clobber U.S. earnings? In six out of seven cases since 1970, commodity crashes exceeding 20% year-over-year have corresponded with earnings contractions exceeding 10% year-over-year. The lone exception occurred in 1998 when earnings decelerated to zero growth without actually contracting. Given this [...]

Is Chevron Cheap?

By |2016-12-01T15:44:44-04:00August 6th, 2015|Categories: Technical Perspective|Tags: , , |

The performance of energy stocks is clearly related to the price of oil. The attached chart, based on thirty years of data, compares the price of Chevron (relative to the broad market) with the inflation-adjusted price of crude oil. Based on this data set, Chevron will outperform the market if oil prices increase from here. If oil trades lower, Chevron has roughly equal odds of beating the market. From an options perspective, then, we have a reasonably-attractive [...]

Market Rules to Remember

By |2016-12-01T15:44:49-04:00June 17th, 2015|Categories: Technical Perspective|Tags: , |

By Mark Ungewitter A few years ago, I participated in a panel discussion at the 50th Annual Contrary Opinion Forum in Vermont. One of my fellow panelists, Walter Deemer of Deemer Technical Research Inc., has been a cornerstone of institutional market strategy since the early 1960’s and is this year’s recipient of the MTA’s prestigious annual award. Walt says he learned almost everything from the legendary Bob Farrell, his mentor at Merrill Lynch. And the essence of [...]

Moment of Truth For Non-U.S. Markets

By |2016-12-01T15:44:55-04:00May 22nd, 2015|Categories: Technical Perspective|Tags: , , |

Image Source: Philip Brewer, Flickr The FTSE All World Ex-US index (VEU) is testing multi-year resistance in both dollar and gold terms. (See Chart 1)  Dollar-based investors are obviously interested in dollar thresholds, but why monitor relative strength in gold terms?  Because gold provides an alternative base “currency” that measures confidence in the institutions of money and credit.  A market making higher highs versus gold is exhibiting organic strength independent of local-currency devaluation or unsound credit expansion [...]

U.S. Long Bond: Panic Buying

By |2016-12-01T15:45:00-04:00January 29th, 2015|Categories: Technical Perspective|Tags: , , , |

The demand for long-term Treasury bonds has reached panic proportions. A casual inspection of price history suggests that the rally since December 2013 is “too steep, too fast.” An alternative measure of intensity – the ratio of 30-year to 10-year bond prices – is also flashing red. The price of 30’s relative to 10’s is rising at a pace not seen since the panic of 2008. Can an important top be far ahead?

Chart Of The Week: Bonds Versus Oil

By |2016-12-01T15:45:05-04:00January 21st, 2015|Categories: Technical Perspective|Tags: , , , , |

Summary Important bottoms in crude oil have often matched important bottoms in Treasury yields. The bond market seems intrinsically stretched in context of its multi-decade progression. Long-term bonds are especially risky during the late stages of oil-market crashes. While many factors influence the bond market, it's worth noting that cyclical bottoms in oil prices (NYSEARCA:USO) have often matched cyclical bottoms in long-term Treasury (NYSEARCA:TLT) yields. The oil crashes ending in March 1986, December 1998 and December 2008 [...]

China Watch: Bull Market Ahead?

By |2016-12-01T15:45:10-04:00January 6th, 2015|Categories: Technical Perspective|Tags: , , , |

Something interesting is happening in China. Financial stocks are surging relative to the broad market. The "hockey stick" liftoff began in late November when the People's Bank of China (PBOC) cut policy rates for the first time since 2012. China is the world's only large economy with room to pursue conventional monetary policy. Further rate cuts are likely as falling energy costs put downward pressure on consumer prices. Investors should keep close watch on FXI, the most [...]

Emerging Markets: Time to Buy?

By |2016-12-01T15:45:15-04:00June 12th, 2014|Categories: Technical Perspective|

 Is Low Volatility Signaling a Market Top?Charter Trust CompanyBy Mark UngewitterJune 11th, 2014 We keep hearing that today’s near-record-low volatility is signaling an imminent market top.  To test this proposition, we examined implied volatility back to 1986 using the VXO index.  (VXO behaves similarly to VIX, with the advantage of a longer track record.)  Friday’s VXO reading of 10.3% was a near-record low.  Weekly readings below 11% are rare events, occurring only 3.6% of the time.  The chart [...]

Emerging Markets: Time to Buy?

By |2016-12-01T15:45:20-04:00December 13th, 2013|Categories: Technical Perspective|

 Will Apple Follow the Microsoft Script??Charter Trust CompanyBy Mark UngewitterDecember 13th, 2013Back in July, we used technical analysis to anticipate a “head & shoulders” bottom in AAPL.  Now that the minimum price objective of $550 has been achieved, we ask a deeper question: What does market behavior have to say about AAPL’s longer-term prospects?Apple is undoubtedly a great company with great products.  It also has a reasonable valuation by most measures.  There is just one problem.  Market [...]

Earnings Preview

By |2016-12-01T15:45:21-04:00October 7th, 2013|Categories: Technical Perspective|

  Earnings Preview Charter Trust Company By Mark Ungewitter October 7th, 2013   There’s an old saying on Wall Street: “The market never discounts the same thing twice.”  With government-shutdown and debt-ceiling theatrics becoming an annual ritual, perhaps there’s something else behind the recent loss of market momentum. The main thing keeping me up at night is corporate profitability.  Third quarter earnings will soon dominate the financial news.  Operating earnings have been sluggish over the past two [...]