Friday, 2 February 2018

MarketMap 2018 Issue #3

January 31, 2018

“Most investors will concede that the most difficult part of managing a portfolio of stocks is identifying the formation of a major market top before it is too late. This is undoubtedly due to the universal enthusiasm for stocks, and generally positive economic news that usually dominates investor psychology at such times. But, the warning signs are nevertheless present for those willing and able to see them.”
Paul F. Desmond Lowry Research Corporation
Forecast are mostly about sales/marketing; they make a market. From a reasonable point of view, they point out opportunity upon which investors and traders apply a strategy to take advantage.
A forecast is applied to risk management as well. Yet I heard chief market strategies from BOA Merrill Lynch point out in a public financial news panel interview that the last year of a bull market is usually the best year. She pointed to 1999 as an example. Her logic because the best return year of the bull is the last year you don’t want to miss it.
There are many flaws in this logic; the main one is the gains of 1999 were wiped out in the first two months of 2000, not to mention the follow through decline into 2001-02.
Plus, it is clear in retrospect that ’99 was the last, but

MarketMap 2018 update January 23, 2018

MarketMap 2018 update

Through all the channels I listen to there is an overwhelming consensus that we are in a new secular bull market and there are no signs of a top and the market is virtually without risk.

The pundits hang their hat on the A/D line which is in gear and until it divergence the market is going higher. I mentioned this in the big issue newsletter. They also love the monthly RSI at a historical high of 85.

More recently the social media types off wall street look at ADX at 50 to infer the trend dynamics are higher. However, these extremely high levels above 50 by ADX when seen in a panic context, the 50 ADX is at a COT; the bull run since November 8, 2018, is a panic, emotionally “I can not afford to miss the move.”

What is critical here is the "off the chart" sentiment attending to the Trump's bull market. Extreme opinions shared widely on social media and financial news channels constitute the single most reliable indicator of an impending change of direction for an exchange.

One measure of this "SPECULATIVE INTENSITY" already peaked December 17,2018. BitCoin from that date has lost 40% plus.

Our CMT friend and associate Bob Prechter point to another measure of “speculative intensity" TMtraders can use it as a sign of a change of the trend is near.  The indication is the widening of the gap between the yield of junk bonds and yield US of Treasury bonds of similar maturities. When the spread widens, it is a reflection of the market without risk management considerations - signs of a change of a trend for stocks.

As you can see in our Early Table, the market is in a cluster of time windows likely to lead to a high pivot price, confirmed by a sizable decline %5 plus – established by our big swing (multi-month) systems sell (taking profits) and sell short signals before the end of the month.

MarketMap™2018 Issue #1 The best technical minds

MarketMap™2018 Issue #1

Financial crises are precipitated
they are not random events

As recent as 2016 major pessimistic headlines have bombarded the public. Such media spin on the financial markets keeps a lid on public participation. Especially that segment of the populace that has been disenfranchised from owning stocks.

However, the negative headlines all changed on November 8, 2016, coincidental with the “surprise” Trump election.  Since that date, the market outlook has changed from one of gridlock, which the market liked as it meant nothing gets done and Wall Street liked the status quo. Now with a laissez-faire President that will sign anything the Republican majority want for fiscal policy, well Wall Street is in love.

However, the initiated knows this has precedents and bear markets are something expected every several years, especially in this era of deregulated markets and corporatocracy.

The initiated knows, most boom and busts, if not all, that have plagued the American economy were generated by government creating a boom through easy excessive fiscal or monetary policy, which was soon followed by the inevitable bust, i.e., the inevitable taking of profits.

Media and Market Sentiment

The gaggle of Wall Street employees who are in love with the White House ... Remore