Quarterly Performance Review for Sept. 30 2016

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We offer three levels of service: We also offer a trading advisory service that has specific recommendations of what to buy and in what quantity. These signals or orders are sent out every afternoon before the Globex session begins. These systems also include stops. For a lot of the quarter the S&P went absolutely nowhere and the gauge got stock below … Read More

The Reliability of Negative Bond/Stock Correlations

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I have had a number of discussions with investment managers who seem to be skeptical of my assertion that stocks and bonds have a very negative correlation on a daily basis. This fact is necessary and used by my gauges to determine prospective bond performance. If the S&P is out of gas, that is bullish for bonds only if there … Read More

Volatility Liftoff!

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After months of dull sideways movement, we finally got a breakout in volatility (Vix). It came as it usually does by virtue of a decline in S&P futures. There are a number of questions to consider: Question 1: Is it better to wait after such a jump? We can look and see if any move above the monthly average will … Read More

Are interest rates unnaturally low?

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There are a plethora of famous investment managers and newsletter writers who like to argue that interest rates are far too low. They assert that the Fed has grossly mismanaged their stimulus program and this will all end in tears. This may well be true since another crisis would demand more rate cuts and it’s hard to cut them when they’re … Read More

Why is the long term bond gauge unhappy?

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Of late we have seen a very attractive set of conditions for bonds, as reflected in the daily gauge. The weekly index however has been drifting lower primarily due to the influence of utility stocks which are included only in that longer term index. How weak are they? As you can see they have faded while the S&P is still … Read More

Simplifying Factors That Drive Bond Returns

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We have written about how we believe there are essentially only two things you need to know when you buy or trade bonds – inflation and economic growth. We have explained the inflation proxy (oil + the Auzzy dollar) and the economic proxy – the S&P 500. Let’s now look at how these two factors affect returns individually and where … Read More

Mid-Year 2016 Performance Review

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2) Institutional traders or portfolio managers receive a full complement of where all three gauges stand for both daily and weekly time frames. In the daily email we also reference what our positions are. This refers to what a pair of trading algo’s are doing in the market. Those algo’s use the gauges and/or their inputs in order to decide … Read More

The Bear Market Switch

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You can see how we crashed through the threshold a few days ago which is a good thing – just like we saw in February and May. Now what we need to see is some bounce in this variable. If it gets stuck then eventually the 2 week average will fall below that threshold and bear market alarms will go … Read More