The last time we have seen a movement in our indicators such as the movement in the last three months were the following dates: 1971, 1978, 1986, 1994, and 2006. The only year that a recession did not occur a year or two later was 1994. A recession occurred in the other four periods on average 1 and half years later. We predict a global recession within the next year.
However, our behavioral indicators suggest that before that global recession occurs global markets increase. Therefore we are bullish to an extent over the following year afterwards we are bearish.
The following markets we like:
1. South Africa
2. Turkey
3. US government bonds
4. Gold
5. India
6. Mexico
Our indicators suggest several emerging equity markets will do over the upcoming year. Right not emerging markets have not performed well but we think these markets will do well in the upcoming year.
Sunday, November 13, 2011
Sunday, October 23, 2011
Market Update 10.23.11
The model results suggest no imminent 2008 type global crisis. The short-term measures have come down considerably. The crisis indicators for Europe and specific European countries of Greece, Spain, and Italy are near the crisis threshold but still below. Typically when a crisis is going to hit our indicators pass the threshold months in advance. Since the markets have already been rattled we believe the current measures near crisis threshold are more contemporaneous. When this occurs it typically means the end is near, however, the market is susceptible to another major shock 3-12 months out.
What to invest in today?
The top five markets we like are:
South Africa
Turkey
India
Mexico
Japan
What to invest in today?
The top five markets we like are:
South Africa
Turkey
India
Mexico
Japan
Sunday, October 16, 2011
Market Update 10.16.11
Two weeks ago we posted that the global markets were near a bottom based on our measures. Since then they have rebounded considerably. We are not out of the woods yet though. US Treasuries and Gold are still very much bullish according to the model. Even so, they are losing some bullish strength. Once the model suggest no more bullishness then we are out of the woods for the time being.
However, select equity market are now becoming bullish which is a good sign. Prior to July 31 there were no equity markets that were bullish. Here are the top equity markets:
South Africa
Mexico
India
Japan
China
For those that are risk takers, we view Indonesia and Malaysia are coming back hard. When markets are at the bottom of our list we find they typically come back strong. These markets are at the bottom of our list now.
However, select equity market are now becoming bullish which is a good sign. Prior to July 31 there were no equity markets that were bullish. Here are the top equity markets:
South Africa
Mexico
India
Japan
China
For those that are risk takers, we view Indonesia and Malaysia are coming back hard. When markets are at the bottom of our list we find they typically come back strong. These markets are at the bottom of our list now.
Sunday, October 2, 2011
Market Update 10.02.11
Financial markets have been crazy the past two months. It does not look like it will subside until the European debt crisis and more info about the US economy becomes available.
Either way what does the model say? The model is not predicting another global financial crisis such as in 2008. Ignore the fear that is out there. We find irrational fear is at one of its greatest points in our history since 1970. This means the bottom is close. Also our US measure is close to its financial crisis threshold. When the market moves down 10-20% and then hits the financial crisis threshold it also means the market has bottomed. It is not at the threshold yet but the most we see the market fall is between 5-10%. Not another 2008.
Where do you place your money?
We like select equity markets such as Japan, Mexico, South Africa, Turkey, and India. Treasuries are still bullish.
Either way what does the model say? The model is not predicting another global financial crisis such as in 2008. Ignore the fear that is out there. We find irrational fear is at one of its greatest points in our history since 1970. This means the bottom is close. Also our US measure is close to its financial crisis threshold. When the market moves down 10-20% and then hits the financial crisis threshold it also means the market has bottomed. It is not at the threshold yet but the most we see the market fall is between 5-10%. Not another 2008.
Where do you place your money?
We like select equity markets such as Japan, Mexico, South Africa, Turkey, and India. Treasuries are still bullish.
Sunday, September 11, 2011
9.11.11 Market Update
Based on recent model results we do not see stock markets falling that much further. Looks like the markets will battle back and forth until uncertainty settles. The US and Europe are still well under their financial crisis thresholds. If this was a financial crisis brewing our indicators would have already indicated a financial crisis.
Our model still favors gold and treasuries of course. As far as equity markets our model still likes Asian markets such as the Asian Tigers as well as China and India. Of course we are concerned about what the markets will bring us. However, our models suggest the worst is behind us. Markets are overreacting to a point. At the same time there are no bullish signals for any one particular market other than gold and treasuries which suggests the markets will not increase in the immediate future, but the markets will not fall another 10 or 15% again.
Our model still favors gold and treasuries of course. As far as equity markets our model still likes Asian markets such as the Asian Tigers as well as China and India. Of course we are concerned about what the markets will bring us. However, our models suggest the worst is behind us. Markets are overreacting to a point. At the same time there are no bullish signals for any one particular market other than gold and treasuries which suggests the markets will not increase in the immediate future, but the markets will not fall another 10 or 15% again.
Sunday, September 4, 2011
Blog 9.04.11
The media has been taking about a double dip recession. What do our indicators say? It says there is no US recession. Going back to 1970 our indicators have indicate there was a US recession before every US recession. What does this mean? It means the markets are forecasting a worst case scenario.
Our model suggests to keep a good exposure to gold, however, also to emerging Asian markets such as Indonesia, Thailand, and Malaysia.
Our model suggests to keep a good exposure to gold, however, also to emerging Asian markets such as Indonesia, Thailand, and Malaysia.
Sunday, August 14, 2011
Market Update 8.14.11
Last week we suggested the market would flat to slightly positive based on some of our indicators. A pretty bold move given the great uncertainty. The market was slightly down. We believe the US market is near a bottom and it will recover until the middle of September. By then it will fall late September and early October and increase until the rest of the year. At that point we will have to evaluate. However, the outlook is not great.
Even so our indicators do like the Asian tigers such as Indonesia and Thailand.
The model likes gold as well. However, we sold because of the large run up. We will look to buy later on. In addition, commodity markets are becoming slightly more bullish such as Brazil and South Africa. With the Fed keeping interest rates low this could mean more gains for commodities. We are waiting to receive a confirmation of this trade before acting on it.
Even so our indicators do like the Asian tigers such as Indonesia and Thailand.
The model likes gold as well. However, we sold because of the large run up. We will look to buy later on. In addition, commodity markets are becoming slightly more bullish such as Brazil and South Africa. With the Fed keeping interest rates low this could mean more gains for commodities. We are waiting to receive a confirmation of this trade before acting on it.
Saturday, August 6, 2011
Model Update 8.6.11
Model signals to stay in Asian markets. Confirmation of an Asian tiger trade, indonesia, malaysia, and thailand. Also Japan, India, and China. Gold continues to be bullish.
US is now at the bottom of the list of the rankings. However, the US indicator is still below crisis levels.
Analysis suggests that this next week won't be as bad as last week comparing to other periods. There could be a possible rebound or flat week.
US is now at the bottom of the list of the rankings. However, the US indicator is still below crisis levels.
Analysis suggests that this next week won't be as bad as last week comparing to other periods. There could be a possible rebound or flat week.
Sunday, July 31, 2011
Market Update 7.31.11
We just received confirmation concerning the Asian trade. In the last several weeks we have been bullish on Indonesia, Malaysia etc. Other markets such as China, South Korea, and Thailand were in a grey area between bullish and bearish states. These markets have just transitioned into a bullish state while other markets such as the US and Europe have transitioned to a bearish state. The last of the Asian markets to transition to the bullish state now confirms the Asian trade is on.
What about the US? US government bonds are bullish however, the US equity market is bearish. But not bearish to the point of another financial crisis. The US is still considerably under its crisis threshold. However, investors are fleeing to some safety resulting in a bullishness of US government bonds. These results mean the market is not worried about US default. However, the long-term consequences are bearish for the US market.
What about the US? US government bonds are bullish however, the US equity market is bearish. But not bearish to the point of another financial crisis. The US is still considerably under its crisis threshold. However, investors are fleeing to some safety resulting in a bullishness of US government bonds. These results mean the market is not worried about US default. However, the long-term consequences are bearish for the US market.
Saturday, July 23, 2011
Market Update 7.24.11
This week's results are confirming the an Asian trade and Gold and Silver. Continue investing in these markets. What is curious is that the number one ranked investment in our list is US Government Debt. In addition, gold and silver both have came back as good investments. We received the sell signal in April and now a buy signal. Lastly, the US market has a bad short-term measure. However, the long-term measure is in a stable zone.
This could mean some downside potential in the global financial markets. Even so, the Asian market trade of Indonesia, India, Malaysia, and Japan are continuing their trade which will outlast any short-term downside in the global financial markets.
This could mean some downside potential in the global financial markets. Even so, the Asian market trade of Indonesia, India, Malaysia, and Japan are continuing their trade which will outlast any short-term downside in the global financial markets.
Sunday, July 17, 2011
Market Update 7.17.11
Last week we mentioned that the next trade was Asia. This is how our ETFs did last week compared to the US which we mentioned was in bearish territory.
ETF Market Return
EIDO Indonesia 0.55%
EWJ Japan 0.76%
EWM Malaysia -1.17%
INP India -2.48%
IWM US -2.73%
This past week was a confirmation of the Asia trade. We also received a new signal for another trade, precious metals such as Silver and Gold.
We suggest over weighting Asia and also putting some money into precious metals. Since this is a new signal we recommend allocating a small amount for now increasing your allocation as the trade is confirmed.
We are receiving bearish signals for the developed world except for Japan including the US, Canada, Australia, and Europe. At the beginning of the year, these were the countries to invest in and Asia was the region to not invest in. We are now receiving a signal these trades have switched.
ETF Market Return
EIDO Indonesia 0.55%
EWJ Japan 0.76%
EWM Malaysia -1.17%
INP India -2.48%
IWM US -2.73%
This past week was a confirmation of the Asia trade. We also received a new signal for another trade, precious metals such as Silver and Gold.
We suggest over weighting Asia and also putting some money into precious metals. Since this is a new signal we recommend allocating a small amount for now increasing your allocation as the trade is confirmed.
We are receiving bearish signals for the developed world except for Japan including the US, Canada, Australia, and Europe. At the beginning of the year, these were the countries to invest in and Asia was the region to not invest in. We are now receiving a signal these trades have switched.
Sunday, July 10, 2011
Market Update 7.10.11
We are in the midst of the summer. The US market took a hit and then basically came back in a week. In a previous blog we said that a 7% decline from the high will be the bottom of the decline if we are right about 2011 looking like the summer of 2004. This is exactly what happened. Except the market sprung back a lot faster than in 2004.
What does the model say now? The model is not bullish on the US for the short-term. The long-term indicator is in the middle of bearishness and bullishness, but the short-term indicator is bearish. This means it is hard to determine where the US is going. Therefore, we recommend staying away from the US market for now.
The markets the model likes is:
India
Indonesia
Japan
Malaysia
Mexico
Looks like the Asian markets are the next trade. The model is not bullish yet on other Asian markets such as China, Korea, or Singapore. However, if the Asian trade is the next trade then these markets will start to follow suite.
Based on our analysis of previous periods with the same indicator levels, the US market will fall and rise until the end of September. At that point the US market will have a rally to the end of the year.
What does the model say now? The model is not bullish on the US for the short-term. The long-term indicator is in the middle of bearishness and bullishness, but the short-term indicator is bearish. This means it is hard to determine where the US is going. Therefore, we recommend staying away from the US market for now.
The markets the model likes is:
India
Indonesia
Japan
Malaysia
Mexico
Looks like the Asian markets are the next trade. The model is not bullish yet on other Asian markets such as China, Korea, or Singapore. However, if the Asian trade is the next trade then these markets will start to follow suite.
Based on our analysis of previous periods with the same indicator levels, the US market will fall and rise until the end of September. At that point the US market will have a rally to the end of the year.
Sunday, July 3, 2011
Market Update 7.03.11
There appears to be a changing of the guard now. The developed markets are out, energy is out, natural resources are out. The new trades appearing are India, Indonesia, Japan, Malaysia, and Mexico.
Base on the US indicators I believe there will be a sell of in the US after the 4th of July and then that will be the time to add to the above markets.
It is too early to indicate what will be the new trade for the rest of the year. It appear to be Asian markets which have not performed well this year. We need several weeks to confirm this trade.
Base on the US indicators I believe there will be a sell of in the US after the 4th of July and then that will be the time to add to the above markets.
It is too early to indicate what will be the new trade for the rest of the year. It appear to be Asian markets which have not performed well this year. We need several weeks to confirm this trade.
Sunday, June 26, 2011
market update 6.26.11
The model is still signaling that there are no trades at the moment. That means the market will probably trade sideways until a trade appears. If you followed our advice you would be sitting with cash at the moment. The question is when to use that cash.
Once a trade appears we will write about where to put that money.
Also, take with precaution. Our model suggests that 2011 will be similar to 2004. In 2004 the S/P 500 market fell over 7%. At that point it was a low and the market traded sideways from August to the end of October. If 2011 is going to remain like 2004, the S/P 500 has bottomed. However, the market will then trade sideways until the end of September. If one wants to it may be prudent to use some of that cash little by little. If the market falls more buy more. We are not predicting any hard fall from here on. Any fall in the US market will still be in the 1200 range.
However, the most important signal is where to put the money based on the model results. There is no trade of yet.
Once a trade appears we will write about where to put that money.
Also, take with precaution. Our model suggests that 2011 will be similar to 2004. In 2004 the S/P 500 market fell over 7%. At that point it was a low and the market traded sideways from August to the end of October. If 2011 is going to remain like 2004, the S/P 500 has bottomed. However, the market will then trade sideways until the end of September. If one wants to it may be prudent to use some of that cash little by little. If the market falls more buy more. We are not predicting any hard fall from here on. Any fall in the US market will still be in the 1200 range.
However, the most important signal is where to put the money based on the model results. There is no trade of yet.
Saturday, June 11, 2011
Market Update 6.11.11
The model results this week suggest there are currently no trades right now. This is not a good sign. The next trade will probably reveal itself in the next month or two.
We suggest to remain in cash until that trade appears.
We suggest to remain in cash until that trade appears.
Monday, May 30, 2011
Market Update 05.30.11
The model is suggesting that there is no trade at that moment. The model results still suggest high yield investments such as high yield corporate bonds and REITs, however, there is no clear trade at the moment such as emerging markets, developed markets, gold, or energy.
We received a sell signal last month regarding energy and other commodities as that turned out to be correct. However, our long measures are still bullish on energy and energy-related markets. It could still be a long-term play.
Markets that still look good are Indonesia, India, and the UK.
However, when there is no real trade the model is suggesting it usually means the market will stay flat or head down. We suggest holding a decent amount of cash at the moment.
We received a sell signal last month regarding energy and other commodities as that turned out to be correct. However, our long measures are still bullish on energy and energy-related markets. It could still be a long-term play.
Markets that still look good are Indonesia, India, and the UK.
However, when there is no real trade the model is suggesting it usually means the market will stay flat or head down. We suggest holding a decent amount of cash at the moment.
Sunday, May 22, 2011
Market Update 5.21.11
Model results suggest there are not many market plays out there at this time, which is a sign the market does not look great.
The model likes the developed markets of the UK, Europe, and US. However, the US short indicator is moving up signaling to reduce allocation there.
The model likes certain emerging markets such as Indonesia, India, and Thailand. Chile and China are on the radar.
High yield investments.
If we continue on the 2004 path the US market will see some slight upside going into June and then a down July. This is why we are holding a good deal of cash waiting for August.
However, even though July will be down we do not forecast a lot of volatility. No flash crash, no major market correction, no Fed surprises. The best play is to best against volatility.
The model likes the developed markets of the UK, Europe, and US. However, the US short indicator is moving up signaling to reduce allocation there.
The model likes certain emerging markets such as Indonesia, India, and Thailand. Chile and China are on the radar.
High yield investments.
If we continue on the 2004 path the US market will see some slight upside going into June and then a down July. This is why we are holding a good deal of cash waiting for August.
However, even though July will be down we do not forecast a lot of volatility. No flash crash, no major market correction, no Fed surprises. The best play is to best against volatility.
Monday, May 16, 2011
Market Update 5.15.11
Last week mentioned the US stock market would be flat or down. The US stock market was slightly down. Based on the dynamics we see in the market and in our model we see a very tame US market until July. The US market might go slightly down then slightly up.
Currently the model likes select emerging markets such as Indonesia, Poland, India, and Thailand. It may take a several months for these market to see decent returns. But the early signal for these markets has come.
The model also likes high yield corporate still, REITs, and emerging market debt.
We are currently short energy producing markets for now.
Currently the model likes select emerging markets such as Indonesia, Poland, India, and Thailand. It may take a several months for these market to see decent returns. But the early signal for these markets has come.
The model also likes high yield corporate still, REITs, and emerging market debt.
We are currently short energy producing markets for now.
Sunday, May 8, 2011
Market Update 5.08.11
In our lat blog we suggested the following:
"Last week we suggested the past week would be a down week for the US market. Monday was down 1% but the market rebounded later on in the week. So far we have noticed a that 2011 is similar to 2004. If this similarity is to continue than the next 3-4 weeks will be down weeks.
The model is also signaling to shift out of commodity such as energy and precious metals and go back into select emerging markets such as India, Turkey, Thailand, and Indonesia."
Since that post energy and commodities have down considerably, with some ETFs going down almost 20%. In addition, the US market went up that following week but decreased this past week. Based on our analysis the US market will decline this week or next before rebounding.
The US market has made a sizable shift in our measures and we have sold out of the US market. We have sold out of energy and commodities and have shorted energy related markets such as Russia and Canada.
We continue to like US high yield corporate, emerging market debt, and REITs in addition to select emerging markets such as Poland, Indonesia, Brazil, and Turkey.
The model is now signaling to get back into China and Taiwan. However, we are waiting a week or two since the model is signaling a weak market to continue than a large rebound which will then lead to a down market for June and July.
"Last week we suggested the past week would be a down week for the US market. Monday was down 1% but the market rebounded later on in the week. So far we have noticed a that 2011 is similar to 2004. If this similarity is to continue than the next 3-4 weeks will be down weeks.
The model is also signaling to shift out of commodity such as energy and precious metals and go back into select emerging markets such as India, Turkey, Thailand, and Indonesia."
Since that post energy and commodities have down considerably, with some ETFs going down almost 20%. In addition, the US market went up that following week but decreased this past week. Based on our analysis the US market will decline this week or next before rebounding.
The US market has made a sizable shift in our measures and we have sold out of the US market. We have sold out of energy and commodities and have shorted energy related markets such as Russia and Canada.
We continue to like US high yield corporate, emerging market debt, and REITs in addition to select emerging markets such as Poland, Indonesia, Brazil, and Turkey.
The model is now signaling to get back into China and Taiwan. However, we are waiting a week or two since the model is signaling a weak market to continue than a large rebound which will then lead to a down market for June and July.
Saturday, April 23, 2011
Market Update 4.23.11
Last week we suggested the past week would be a down week for the US market. Monday was down 1% but the market rebounded later on in the week. So far we have noticed a that 2011 is similar to 2004. If this similarity is to continue than the next 3-4 weeks will be down weeks.
The model is also signaling to shift out of commodity such as energy and precious metals and go back into select emerging markets such as India, Turkey, Thailand, and Indonesia.
The model is also signaling to shift out of commodity such as energy and precious metals and go back into select emerging markets such as India, Turkey, Thailand, and Indonesia.
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