This page has been archived and commenting is disabled.
This Isn't Trivial
One
of the strategies that I have frequently written about for the SP500 involves
the 40 week moving average and the composite indicator constructed from the
trends in crude oil, gold, and yields on the 10 year Treasury. When these
trends are strong and rising, the SP500 faces stiff headwinds. This is
data going back to 1984 and includes the 1990's as well. In essence,
using this indicator as a filter for a SP500 simple moving average strategy can
increase returns by about 25% while reducing maximum draw down by 50% over buy
and hold. In other words, just stay out of the market or hedge yourself
when the collective trends of gold, crude oil, and yields on the 10 year
Treasury are strong and rising.
{click on chart for larger view}
- advertisements -
He's right - all of those things are usually negative for equities. The question is, can they manipulate these variables infinitely? Recent silver and food price action say the shit is starting to bust from the seams.
Technicals do not work in a fraudulent marketplace.
+10
yep, as expected. trivial.
about as good as that tosser tudor jones doing elliot wave analysis in the 80s from the 1920s
Fundamentals are out the door. It looks to me like they are wanting to smash the $ without giving the game away.
Short t bonds & $. Long commodities and S&P.
There is a difference between going short and steering clear of the market. Given the Fed, only a cowboy would go short, it does not mean that you can't participate in those things that have a tailwind.
A reasonably well measured article...
LEAPS! Thats were you Put your "shorts on"!
Been hearing "this is it" for over a year now -- I'm pretty bearish but have lost too much in shorting the unshortable market. No reason to expect that it will go down significantly as long as QE is in play. Pretty chart, though.....
Fundamental analysis/technical analysis do not apply now
what you mean 'does not apply now' ...it has never applied
Fundamental analysis doesn't mean much when the Fed will monetize debt and pump the M2 higher without restraint. The Fed holds the trump card (the proverbial printing press).
+2
you mean +2% more to rise don't you, then the SH&PT hits the fan ...i've got the same figures
+1
we are in uncharted territory
The dark-haried chick on my left shoulder has suggested that this could be the reason that WTI has gone all wack. Maybe all the technical guys use WTI for analysis and the spreads vs. Brent, etc. would distort their charts, making them susceptible to trade failure.
Bwahahhhahaaaaaaaaa-aaaahhahahahaaaahhhhhaaaa!
<wheeze>
Bwahahhhahaaaaaaaaa-aaaahhahahahaaaahhhhhaaaa!
WTF is this guy talking about. Is it me, or is he saying two things at the same time, one a bull and the other bear? This guy should be a politician, he talks like Teddy Kennedy.
thanks for the helpful tip.
http://covert2.wordpress.com
Not 100% sure, but think he is saying that when metals & energy are running in a full blown bull market, profit margins will get squeezed soon. At which point, profits disappear. Danger signal for stocks.
Profit margins don't mean near as much in a market that is propped up by Fed life support and HFT algorithms. Is anything valued correctly in our markets? Maybe, but it ain't stocks.
Does it matter? If adjusted for inflation does the market rise? Has it been? The answer is no, it has been in a real decline since 2000.
Trade the swings but buy and hold has been a loser since 2000. And thats using the cooked CPI figures.