Friday, July 9, 2021

#USStocks Review

US Stocks Review

Those that view the message of the market on a 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.

The global economy and stocks began behaving strangely in late summer of 2019. Repo rates spiked unexpectedly. Few acknowledged it. Anyone looking for a return to "normal" market by fundamentals will likely be disappointed in the coming years.

Stocks crashed in early 2020. Relative performance within the stock market suggests a reallocation of resources away from old to new economic plays. The old norm of "Made in USA" is not coming back. Manufacturing, design, and information collection will be borderless. Citizens will struggle to maintain their liberties and rights without oversight and intervention under this economic backdrop.

Rising stocks as the global and certain market groups decline is a real possibility that has been discussed for years. The stock market's distortion of reality is being attributed to the Federal Reserve. The Fed, contrary to popular opinion, is not that powerful. It cannot control the world's capital flows. The invisible hand, the true driver of market and trends, is redefining the world as the core economy passes from North American to Asia.

Subscriber Comments

If you're a stock trader, one of the best timing tools in the Matrix is the VIX model (Line 58 of the Trends Tab of the Matrix). The table below records buy-and-hold performances from 2009 and 2018 against bullish and bearish impulses of the VIX model.  It usually beats buy-and-hold by a few points (alpha) without many trades.



The strategy is simple. Buy bull phases (green boxes), and sell when it disappears (unshaded regions). Aggressive traders can short the bear phases. Investors can sit in cash rather than short.

VIX Model


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Market-driven money flow, trend, and intermarket analysis is provided by an Access Key.