Editor’s Weekly Market Thoughts – Feb 29, 2016

Most investors struggle with understanding the fluctuations of the markets and how to trade within them. A typical buy-and-hold investor who has been in the markets over the past 14 months has spent a great deal of emotional energy, and savings. Since January 2015, the SPX has returned -5.48%. Though this is far better than just a few weeks ago …

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Editor’s Weekly Market Thoughts – Feb 15, 2016

On Friday we have had a relief rally and a lot of investors with long positions are excited. However, in this period of extremely high volatility the chance for a head fake still remains. That’s why it’s better to validate a real rally than anticipate it. Very high volatility is creating intra-day swings that can take out even some of …

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Editor’s Weekly Market Thoughts – Feb 1, 2016

Looks like the bulls are getting some comfort from last week’s finale. Our long-term cycle continue on a decline and we are not sold on this “bull” yet. To us this is a major short coverings squeeze which creates violent rallies because the short seller’s stop prices are getting triggered. Even a little profit taken by short sellers can create …

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Editor’s Weekly Market Thoughts – Jan 18, 2016

When the stocks that institutions buy keep getting slammed back and forth without a positive trend, the institutions finally lose interest and start moving money to cash or the treasuries. Big bar swings are not healthy for bull markets. When volatility remains high for an extended period, it discourages investment. Historically, volatility increases when interest rates move too high (5 …

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Editor’s Weekly Market Thoughts – Jan 2, 2016

It is likely that 2016 financial markets will begin with high levels of volatility. Presently VIX is higher than during the strong uptrend years between 2012 and 2014. If we look back at history, higher volatility precedes bearish market declines, such as seen in the years 2000, 2007, 2010 and 2011. While higher volatility is a warning that markets could …

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Editor’s Weekly Market Thoughts – Dec 21, 2015

Volatility has been at its peak this year dominating these choppy markets. Fund managers are desperate to deliver decent results and volatility is not helping them. The reality is that it is going to be a tough year to show big returns even for us market timers. We earn our paycheck mostly during bear markets. Now here are some facts …

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Editor’s Weekly Market Thoughts – Dec 14, 2015

For almost two decades when the junk bond market and the stock market diverged; it was the junk bond market that proved observant. When junk bonds and stocks disagree, Junk bonds tend to be right. Weakness in the High yield bonds with credit ratings below investment grade and fears of meltdown have increased after high-yield mutual fund Third Avenue Focused …

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Editor’s Weekly Market Thoughts – Dec 8, 2015

When markets stall and start moving sideways, technicians call it consolidation. Their explanation is that buyers and sellers are not overly committed and their shares just keep changing hands at a range bound pricing. We look at it a little differently. Sideways action happens because there is not a consensus of cycles moving in the same direction – We call …

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Editor’s Weekly Market Thoughts – Nov 30, 2015

We are still in a choppy sideways mode and we do not expect much action for going long or short. However, based on our cycle’s projection we are expecting to go long sometime in the middle of December for a year-end rally. That is a very high possibility based on our observation of the market, particularly because our mid-term cycles …

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Editor’s Weekly Market Thoughts – Nov 23, 2015

Indices began Friday with a strong first hour rally but the shorter term cycle forced a pull-back that surrendered a good portion of those gains. Our short term cycles are still in decline. These cycles should hold the markets back for a few more trading days. However, we may take a long position in SPY and SSO if our short …

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