Where The Markets Go Now?

Where The Markets Go Now?

A Powerful Trumpet And Where The Markets Go Now

The world looks at Trump as the reason for the bull market.

They see the rhetoric of Bernie Sanders and Bloomberg with his Green Agenda and the view outside the USA is that the bull market would be over.

That perspective from outside the United States can impact the capital inflows which have been moving into equities. It does not matter if you are pro or against Trump. You must understand the other person’s view for that is what makes them act.

The Markets

The state of the economy outside the USA is absolutely horrible. The US economy is still the best thing out there including Trumps new tax rates. That does not mean that the US will boom.

It likely could slow down, but as I have mentioned in prior posts, it’s just that everything outside the USA will be remain worse.

So, here is where do the markets go now?

The Dow is leading the direction of the markets currently.  You can see this by noticing the sell signal last week in the Daily Trading Charts it was the first to alarm us.

Where The Markets Are Going Now

Remember that the Dow barely made a new high in Feb, the high it made is still indicative of a pause in trend. I began noting that market manipulations were appearing and Gaps up were going to eventually fill. Our exit signals was on the 18th.

Two of the four up-gaps created last year have filled with this recent decline, but there are 2 other gaps that have not filled yet.

More importantly, where are the markets going now?

Eye-Opening Spoiled Fish Trading

Eye-Opening Spoiled Fish Trading

I was watching YouTube and my feed was taken over by Eye-Opening Spoiled Fish Trading videos and in between were advertisements for trading services and trading chat rooms promising quick and easy profits.

YouTube has become a cesspit of snake oil salesmen and fake trading gurus.

Fish (Noun): An inexperienced or unskilled player, especially such a player who loses significant amounts of money; a live one.

YouTube Spoiled Fish Trading Alert: Trading is not easy and you cannot make millions of dollars in your pajamas, on your iPhone, whilst simultaneously travelling the globe.

I know it’s hard to believe but it’s true.

The only explanation for all this hustle is that YouTube must have become a fertile breeding ground for fish.

So how can you avoid becoming one?

Let’s start by highlighting some of the shady characters currently doing the rounds on YouTube so you know who and what it is you have to look out for.

1. The Spoiled Fish Trading Smooth Operator

Top of the list is the smooth operator who knows all about internet marketing. These guys usually broadcast themselves from a beach or New York penthouse with wads of cash spread out on the bed.

A good way to lure fish is to show wads of cash spread out on a bed.

They claim that trading is so easy, all you have to do is follow their signals and take their courses and you will become their next millionaire student.

Some of the videos these guys make are so laughable that you think it must be a spoof. You keep waiting for the big ‘reveal’ but it never comes.

Without doubt, the smooth operator is the most dangerous character on YouTube.

Many run illegal practices like front running and demo trading.

And they get away with it by using clauses that tell you not to bad mouth their services. Top prize goes to the guy who pretends to have spoken at Harvard University when in fact the whole thing is a ruse set up by actors and other con artists.

2. The Clueless Millennial

Next on the list is the clueless millennial. These guys mean well but they don’t have enough experience to be talking markets.

The last time the market went down these guys were in kindergarten.

They don’t realize that their strategy (aggressive averaging in) is a ticking time bomb.

Ironically, being born in an era of online means most of these guys got their trading knowledge from, you guessed it, YouTube.

The result is a cyclical regurgitation of stale trading info.

Top prize in this category goes to the guys and gals buying leveraged ETFs and cryptocurrencies on every dip. Because everything goes up eventually, right?

3. The (So-Called) Live Trader

This trader broadcasts his impressive trading abilities for everyone to see via YouTube live stream. He is therefore a shining beacon of transparency and skill. Or is he?

Apart from being incredibly boring to watch, these traders cause a lot of harm since many of these charlatans are actually operating demo accounts. New traders (aka fish) see the profits being made on these demo accounts and think that trading is easy and viable.

They come to believe that good trading is about watching the market and acting on impulse.

Buying options or futures contracts because…

“Hey, I was doing so well for the last 6 weeks! I can do this.”

All the while they were utilizing a system that has no correlative alignment proven reliable. Thus, should not have worked from the start.

Sadly, they blamed an intermediate term signalling system because it was not designed to function within their “own short term” option or futures trading.

They hope, dream and think their own system can be tamed inside a historically proven trading system.

Sorry, Taming is not how it works.

4. The Clueless Chartist

There are literally thousands of videos on YouTube that show you how to trade particular indicators and chart formations.

They never give you concrete rules or tell you how profitable a chart pattern is.

Why?

Because as time passes charts change with market winds just like the clouds.

Shhh,,, please do not tell anyone this secret; but “the wind is unpredictable.”

Have you ever seen the clouds move and change shapes? This is precisely what charting is. Guessing which way the winds blow in 1 minute, 5 minutes, 1 hour, 8 hours, 1 day, 5 days, 1 month, and 1 year from now.

Which begs the question, do any of these YouTube guys really know what they are talking about?

5. The Copycat Merchant

Lastly, there is the copycat merchant. This is the guy who manages to piggyback off other people’s content, making themselves look good when really they don’t have a clue.

Top prize in this category goes to the guys who take down a video following a DMCA complaint only to upload another exact copy under a different username days later.

copy-catI hadn’t realized the situation on YouTube had become so bad. Good trading content is out there but it’s being swamped by hours of garbage.

These characters waste your time, send you down the wrong path and cause you to lose money and they don’t seem to care about it. A lot of the time they get away with it through the use of disclaimers.

Here is one such paragraph buried deep in a disclaimer of a well known YouTube trader:

This disclaimer was taken from a well known trading website.

In others words, these guys are going to show you trades in their chat room but they’re not going to tell you which are real and which are fake.

Even a fool knows this is a bad deal.

Unfortunately, fish don’t read disclaimers.

 

So what can you do?

The best thing you can do to avoid being conned is to seek out trading content that is science based, not based on squiggly lines or emotional appeal. But they are hardly ever backed up by data and statistics, analytics, and decades of time tested Nobel laureate supported scientific proof.

Don’t base your preference on popularity or number of views because there is a clear negative correlation between these things.

There is a negative correlation between trustworthiness/trading ability and number of views on YouTube. Before going on YouTube be aware that a lot of the content is poor and ask yourself whether it’s worth your time.

Instead, look for content that is backed up by data. For example:

  • Does it show historically back-tested performance results?
  • Does it show win rate and maximum loss?
  • Is the sample size large enough or historically long enough?
  • Can you replicate the results yourself with time?

Good trading is not easy, you need a proven system. Good trading is statistics, process and discipline, and a long history of proven performance.

Powerful Apple & Nasdaq Trading

Powerful Apple & Nasdaq Trading

A Powerful Apple & Nasdaq Trading system can return huge profits with downside protection. Using a simple to follow proven strategy with a long history can certainly work for you.

Apple is a key component in the Nasdaq 100 and has a profound correlative effect on the index. The correlation is more important when you look at the other 99 stocks that make up the indexes direction.  Here are some very important factors in your trading you must consider:

Diversification

By purchasing the index rather than one specific stock, you are significantly more diversified because you own the best 100 technology stocks in the world rather than 1.

Inclusion

Companies move out of inclusion in the index when they fail to perform. In clearer terms, you MUST be one of the 100 best technology companies in order to be included in the index. When one of the 100 companies is removed or added to the index

If you read the link, you quickly realize that companies come and go from inclusion in the index, but the index remains.  This is precisely why you should own the index for higher safety and longer term consistent growth.

Trading Correlation Avoiding Pitfalls

Because the index represents the finest 100 stocks, it can help us on entry and exit points with most of the components, like Apple.  As you see in the Nasdaq chart below our actual signal would have had you exit Apple 2 weeks before Apple took a nose dive. In addition, it would have placed you back in before the sharp bullishness appeared again as you can see in the Apple chart on the right.

Leveraging Nasdaq Bullishness

The InterAnalyst algorithm is optimized for the Nasdaq covering all data points since 1971.  The optimization includes the actual additions and eliminations of the components that make up the index. This allows the signals to remain current to the Nasdaq components at all times. Because of the protections given by InterAnalysts red exit signals to can assume higher leverage and growth potential through Leveraged ETFs.

Given this, investors should bet on the best performing leveraged ETFs of the 10-year bull market. Leveraged funds provide multiple exposure (i.e. 2x or 3x) to the daily performance of the underlying index by employing various investment strategies such as swaps, futures contracts and other derivative instruments. These have led to abnormal returns in the past decade.

Direxion Daily Technology Bull 3x Shares TECL - Up 4352%

This ETF targets the technology sector with three times (3x) exposure to the Technology Select Sector Index. It has amassed about $647.7 million in its asset base and charges 95 bps in fees per year. Volume is good as it exchanges around 347,000 shares a day on average.

ProShares Ultra QQQ QLD - Up 2686%

This product offers twice (2x) the return of the daily performance of the Nasdaq-100 Index, charging 0.95% in annual fees. The fund has AUM of $1.8 billion and trades in solid average daily volume of 1.9 million shares.

Lets Sum It Up

Since you are leveraging the index, not individual stocks, you are better diversified for growth. Since you have entry and exit signals that are based on the core indexes “non-leveraged” movements, you are secure in your memberships buy and sell signals. The Wealth Preserver, Wealth Maximizer, and Wealth Maximizer Pro will keep you growing when the index is bullish, but help you avoid much of the decline allowing you to renter with more money at a likely better price.

Golds Next Move?

Golds Next Move?

Gold. It is magnificent. Gold is still advancing, but what is golds next move?

In terms of US Dollars, it is actually advancing slower than in other currencies. So here is when we see the big move in Gold prices starting, and it is not now!

As you can see in the Gold chart above, the channel crossover occurred last December. But as you see in our actual Monthly Gold Trade Signal chart we were ahead of the move up as our signal was delivered in October.

GoldBug

Unfortunately, the gold-bugs keep preaching something about gold that is NOT going to arrive as they expect.

 

Members Trade Signals

Please login to review the extended detailed members version of this blog post which includes the most recent Daily and Weekly Trade Signals.

Coronavirus, How it Kills & Statistics

Coronavirus, How it Kills & Statistics

How it Kills & The Statistics

This virus can affect the markets whether it becomes a global epidemic or it is simply psychological.  In either case, keeping up with it could be healthy physically and financially. 

If interested, you can subscribe to their channels and they can keep you posted regarding this epidemic.

Or you can go here.

GAPS:  The 99 Year Old – 91% Winning Trading Strategy

GAPS: The 99 Year Old – 91% Winning Trading Strategy

Do you want a 91% Winning Trading Strategy

If you could win 91% of your bets in Baseball, Basketball, Football, Poker, or the Horses, would you consider placing a bet or two?

Or, would you prefer to just blindly buy a virtually 99.999999% guaranteed losing lottery ticket?

Now, let me add to the reality.  What I am talking about is not gambling. It’s a simple to learn and easy to execute trading system that uses the Wealth Maximizer Pro trade signals built on pre-screened and optimized investments. A system with up to 99 years of history.

It is 100% real, honest, and can be a proven winning trade machine for you.

You can download and read the free PDF below right now.

GAPS:  The 99 Year Old - 91% Winning Trading Strategy

Dogs Of The Dow Trading System & Strategy

Dogs Of The Dow Trading System & Strategy

The Dogs Of The Dow Trading System & Strategy has been around since at least the early 90s and exists in a couple of different forms. The strategy involves tracking the 30 stocks in the DJIA and each year selecting the 10 stocks with the highest dividend yield. Each year the portfolio is rebalanced so that you always hold the 10 stocks with the highest yield.

Since dividend yield often moves inversely to price, this is essentially a contrarian strategy where you are selecting some of the weakest performers from the index.

According to this analysis from Steve Auger, the Dogs of the Dow strategy has been an effective one, outpacing the Dow index by a decent margin since 1999:

Dogs Of The Dow Trading Strategy

Dogs Of The Dow Trading Alternative Trading Strategy

Another variation of this strategy is to go long stocks that have been removed from market indexes.

For example, when the S&P 500 announces constituent changes, go long the stocks that have been removed.

These ‘dogs’ often see compulsory selling by fund managers who track the market indexes and this heavy selling leaves them technically oversold and potentially undervalued.

This anomaly has been documented in the UK market with success. Research from Jay Dahya in 2006 found that “deletions to the index are associated with a negative price response, which is fully reversed over a 120-day period after news of the removal from the index.”

Dogs Of The Dow Trading System & Strategy:

Go long the 10 highest dividend yield stocks in the DJIA and rebalance each year.

Alternatively, track stocks that have been removed from major indices like the S&P 500 or FTSE 100 and go long after heavy selling pressure around the announcement. Hold for up to four months to capture the full reversal.

Dogs Of The Dow Trading System & Strategy

Quadruple Witching Effect Trading System & Strategy

Quadruple Witching Effect Trading System & Strategy is the peculiar name given to the third Friday of every March, June, September and December, where index futures, index options, stock options and stock futures all expire.

The expiration of these contracts forces many investors to roll their positions which essentially means they sell their positions in the current contract and buy it back in the next.

This creates movement and volatility and can be a particularly interesting day for day traders.

Since quadruple witching leads to selling in the current contract it would make some sense for this to be a negative day for markets and analysis does back this up.

Research shows that shorting SPY, the S&P 500 ETF, on quadruple witching day has been a net profitable strategy with a win rate of 70% and an average profit per trade of 0.28% over the last 69 trades.

Although this is a small sample size there is some evidence of a profitable edge as illustrated in this equity curve:

Quadruple Witching Effect Trading System & Strategy

Equity curve for the Quadruple Witching Effect Trading System & Strategy.

Quadruple Witching Effect Trading System & Strategy:

Short SPY on the open of quadruple witching day and exit on the same day close.

Dogs Of The Dow Trading System & Strategy

FOMC Drift Trading System & Strategy

FOMC Drift Trading System & Strategy completed a 2011 study commissioned by the Federal Reserve Bank of New York found that large excess returns could be found trading US equities in the run up to scheduled FOMC monetary policy meetings. This effect was shown to go back to 1980 and has increased over time.

The paper, which won first place in the 2015 Amundi Pioneer Prize, shows how US stock indices generally drift higher in anticipation of FOMC meetings.

Since 1994, the S&P 500 index has gained an average of 49 basis points in the 24 hours before scheduled FOMC meetings with a high statistical significance and high Sharpe ratio.

The FOMC drift effect is shown to be robust across other international indices but no effect was found in Treasuries.

The authors also found that the drift is stronger when the slope of the yield curve is low and the VIX is higher indicating higher equity market volatility.

The following graphic is taken from the paper and shows clearly how stock returns have gravitated upwards on FOMC days as compared to non-FOMC days. The grey ‘clouds’ in the diagram represent confidence bands:

FOMC Drift Trading Strategy

The S&P 500 was shown to drift upwards in the run up to FOMC meetings. Src: Fed Bank of New York

FOMC Drift Trading System & Strategy Explanation

The FOMC drift seems to contradict the efficient market hypothesis but it is easy to form a rational explanation for this anomaly.

Since a primary goal of the Federal Reserve is to maintain market stability, FOMC policy announcements often act to suppress market volatility or give assurance to market participants. In recent years there has also been a trend of lower interest rates and accommodative monetary policy.

It’s possible, therefore, that traders and investors anticipate this soothing presence from the Federal Reserve particularly during volatile periods.

Short sellers may also refrain from entering short positions in the run up to FOMC announcements knowing that an accommodative decision may be coming up.

A possible criticism of this anomaly is that it shows strongest performance between 1980 – 2011, roughly the same amount of time that interest rates have been declining in the US.

It will be interesting to see how this pattern holds as interest rates rise.

FOMC Drift Trading System & Strategy:

An easy way to implement this strategy is to go long index futures in the 24 hours before FOMC meetings and exit trades just before the meeting gets underway.

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