Matthew Kerkhoff's Blog

Chief Investment Strategist
matt [at] modelinvesting [dot] com ()

Matthew Kerkhoff is the Chief Investment Strategist at Model Investing. Matt holds degrees in Management Science and Psychology from the University of California, San Diego, and an MBA from the University of San Diego. His approach to reading markets focuses on understanding the psychology of market participants and anticipating their behavior. Layering an element of behavioral science on top of technical and fundamental analysis allows him unique insight into market direction.

Stocks Rise as Earnings Estimates Fall

Apr 10 – Right now, the trailing 12-month P/E ratio for the S&P 500 sits at about 21.5. That works out to an earnings yield of about 4.65 percent. Compared to the 2.5 percent yield that Treasuries currently provide, the valuation of stocks can be considered...

Bullish Price Action, Lackluster Data

Feb 26 – Watching which sectors of the market outperform after one of these events provides clues as to what type of economic environment to expect. If investors are snapping up defensive sectors like utilities and consumer staples, it signals concern about...

Market-Based Stabilizers Kicking In

Jan 16 – Anyone who has taken a cruise knows that the seas, though often calm, can quickly turn treacherous. Those, like myself, who are prone to bouts of seasickness appreciate the inclusion of stabilizers on each side of a ship’s hull...

Strong 4th Quarter Ahead?

By Matthew Kerkhoff – We’re entering a seasonally strong period of the year with modest valuation levels and a strong economy. If you add in a tailwind from reduced trade friction, we could be in for a strong few months. Nowhere is this more evident than...

Breaking Down the U.S. Economy

By Matthew Kerkoff – In last week’s article I elaborated on why it’s important to allow the economic backdrop to guide us when price action becomes erratic. Today, I thought we would take a short tour of the...

Which Yield Curve Spread Is the Most Accurate?

By Matthew Kerkhoff – What’s the best thing to talk about when the market is firing on all cylinders? Recessions, of course. Rather than getting caught up in the excitement of Nasdaq 8,000, which we reached today, or the fact...

Dollar Breakout Threatens Rally

By Matthew Kerkhoff – The story of 2018 has been one of U.S. growth, but not necessarily global growth. While most major economies around the world are still expanding, they have been decelerating or holding steady...

All 11 Sectors of the Market Are Beating Expectations!

By Matthew Kerkhoff – Right now, in terms of price, the S&P 500 is less than 1% away from its high-water mark set at the end of January. But take a look at what has happened to the S&P 500’s P/E during that time.

Who’s Winning the Trade War?

By Matthew Kerkhoff – If we are, in fact, in a trade war – then who’s winning? Is it the U.S.? China? Perhaps the smaller countries that don’t appear in the headlines each day? From my perspective, there are two ways to answer this question.

Why It’s Still Too Early to Give Up on US Stocks

By Matthew Kerkhoff – Back in early February, in the midst of the most vicious selloff we’ve seen in years, I showed the chart below and made the case that we were seeing a “minor blow-off top in the context of a continuing primary...

Trade Skirmish Sidelined as Investors Gear Up for Corporate Earnings – What Do Analysts Expect?

By Matthew Kerkhoff – China and the US slapped $34 billion worth of levies on each other’s exports last Friday, and the markets said, “yeah, whatever,” and marched higher. The question is, why? Market moves often baffle...

AI “Algos” Are Profiting From the Wisdom (and Stupidity) of Crowds

By Matthew Kerkhoff – Dow Theory considers daily action in the stock market to be nothing more than noise, and that presupposition may be gaining in importance. I’ve been hanging on to the chart below, waiting for an opportune...

How Long Until the Next Recession?

By Matthew Kerkhoff – Successfully predict the start of the next recession, plus or minus a few months, and you stand to make a lot of money. Not only can you reposition your portfolio towards bonds and cash – typically...

Hunky Dory

By Matthew Kerkhoff – That phrase doesn’t exactly describe the procession of events over the weekend at the G-7 meeting, but I think it’s a fair assessment of the state of the US economy. Let’s take a look at some...

Price Corrections vs. Time Corrections

By Matthew Kerkhoff – In case you’ve been under a rock for the last four months, we’re in the midst of an ongoing correction. Well … at least the major averages are. The market itself, as measured by breadth, has been setting...

randomness