Thursday, April 18, 2019

#S&P500 Review $SPX $SPY

SP 500 Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Subscriber Comments

Alignment of the primary or monthly trend is the foundation of double and triple alignment. Double and triple alignment is the upside or downside alignment of price and volume (price and force). Is alignment better than buy-and-hold? Yes, buy a long shot. Buy and hold has produced 8% annualized return since 1950. There's been 24 and 17 bullish and bearish alignments since 1950. They've average 24 and 9 months, producing an average and max return of 28% and 30% and 29% and 46% percent for upside and downside, respectively. Average drawdowns or losses for these 24 and 17 alignments have been -1% and -2%. Bottom line, alignment produces far better returns than buy-and-hold and allows investors earning risk free cash returns during consolidation. Sitting on the sidelines earning cash returns adds to investors total return. Yes, cash paid interest until just recently when ZIRP (Zero or less interest rate policy) became the official central banker policy to fix everything. Only the fools believe it works.

S&P 500 Alignment
Alignment of US stocks since 1950

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