Daily Market Commentary  (and next day's position)

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Comments:  June 30, 2020                   Current position for Wednesday: 

Comments:  June 29, 2020                   Current position for Tuesday 

Comments:  June 26, 2020                   Current position for Monday:  

Comments:  June 25, 2020                   Current position for Friday 

Comments:  June 24, 2020                   Current position for Thursday:  

Comments:  June 23, 2020                   Current position for Wednesday:  

Comments:  June 22, 2020                   Current position for Tuesday:  

Comments:  June 19, 2020                   Current position for Monday:  

Comments:  June 18, 2020                   Current position for Friday 

Comments:  June 17, 2020                   Current position for Thursday 

Comments:  June 16, 2020                   Current position for Wednesday:  

Comments:  June 15, 2020                   Current position for Tuesday:  

Comments:  June 12, 2020                   Current position for Monday:  

Comments:  June 11, 2020                   Current position for Friday:  

Comments:  June 10, 2020                   Current position for Thursday:  

Comments:  June 9, 2020                   Current position for Wednesday:  

Comments:  June 8, 2020                   Current position for Tuesday:  

Comments:  June 5, 2020                   Current position for Monday:  

Comments:  June 4, 2020                   Current position for Friday:  

Comments:  June 3, 2020                   Current position for Thursday:  

Comments:  June 2, 2020                   Current position for Wednesday:  

Comments:  June 1, 2020                   Current position for Tuesday:  

Comments: May 29, 2020

Current position for Monday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 50% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is 100% money market.   SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  After early weakness the markets gained then pushed higher when word came that no major blow was thrown in the China/US confrontation. The NDX did touch higher than a high made on Monday but fell back a bit.  With 1.7% left to go for a new all time closing high it is something that we could see this week.  

Comments: May 28, 2020

Current position for Friday.  All programs 100% money market. Although the probabilities are nearly flat the range in expected amplitudes leans heavily to the down side. Which means that under these conditions in the past, when it went up, it went up a little and when it went down, it went down a lot.  As the NDX closes in on the pre-pandemic high investors are more likely to bail out, especially going into a weekend.  The NDX may not be as overpriced as some people think, considering the tech stocks earnings will not be a badly effected as the rest of the market.

Comments: May 27, 2020

Current position for Thursday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 50% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is 100% money market.   SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  The NDX first plunged 2% this morning after Trump threatened to close social media platforms. Then it recovered, closing with a gain of over a half percent.  Hard to make much of a case for the up-side from this level but markets will tend to over-run in both directions.  And the last three daily changes have been small enough to help keep the markets moving higher another day.

Comments: May 26, 2020

Current position for Wednesday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 50% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is 100% money market.   SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  Split in direction between the strong SPX and the weak NDX by Tuesday's close.  We moved to a partial long position in the NDX.  It will be interesting and informative to watch the Covid infections in two weeks to see if the maskless Memorial day crowds had any effect on new infections. US deaths exceeded 100,000 today.  Momentum may be shifting away from tech and into the broader market the RUT gained 2.77% as the NDX slipped a quarter.  Hertz filed for bankruptcy last week and is selling off inventory which will have an impact on new car sales.  Unemployment varies significantly across the types of employment. As of April, leisure and hospitality 39.3%, other services 23%, professional and business services 9.8%, self employed 9.7%, financial activities 5.4%.

Comments: May 24, 2020

Current position for Tuesday.  All programs 100% money market. Our signal turned a very weak "partial long" facing a long week end. There was more support for the trade near the close so I expect the market to move higher, but at the time of the trade it looked less promising.  I am eager to place a trade but expect to take it from a strong position.  This long memorial weekend we will most likely see our 100,000th US death from the virus.  Lets hope the weekend goes well.

Comments: May 21, 2020

Current position for Friday.  All programs 100% money market. Our signal was neutral as two strong program components gave opposite signals, this was a first for me.  Aside from my program, I would lean to the short side based on fundamentals and the seemingly overvalued index but I would lean to the long sided based on the strong support coming out of the FED which has carried the indices higher over the past two months. Best to stay out another day and get a signal with both components in the same direction.  Investing is always a tug between getting the highest returns with the lowest draw downs.  We make that decision every day.

Comments: May 20, 2020

Current position for Thursday.  All programs 100% money market. Another strong market day and it looks like the NDX will challenge the February highs, but the market may be a bit over extended for Thursday.  With the volatility back to normal the risk should be reduced and our program should be operating normally. 

Comments: May 19, 2020

Current position for Wednesday.  All programs 100% money market. Markets closed lower after a report came out saying mostly what I said yesterday. The data from the trial did not say enough to say whether the the drug can do what it needs to do. What is for sure is yesterdays hype about Moderna made it a 29 billion dollar company that has yet to sell anything. Could be great or it could be another Theranos the blood test company that turned out to be a scam in 2015. Best to let the smoke clear on that one. Our signal was unstable near the close.

Comments: May 18, 2020

Current position for Tuesday.  All programs 100% money market. First it was hydroxuchloroquine, then Gilead and now Moderna, being hyped as the latest cure for Covid 19, sure it was only an 8 person first part trial, but the hype blew up the market. Especially since one of their (Moderna) directors (up until very recently), was appointed as chief scientist by Trump to lead the US effort to find a covid 19 vaccine.  Ironically (regarding Mr Trumps policies), Mr Mohamad Moncef Saloui is a Muslim, Moroccan, African immigrant.  And he is well qualified. The disruption with millions unemployed will not easily be resolved so why is the market, especially the NDX doing as well as it is?  Well the stock market is no longer connected to the broad economy as tightly as it once was. Large corporations, for the most part continue to run very well with most of their staff working from home. And these corporations will come back leaner and be able to run a more cost effective company.  At least that is the thinking  However this is not a local problem it is a world problem and the would economy will be set back and world wide sales will fall resulting in reduced profits for most companies.  Since the top few NDX companies account for such a large part of the NDX index the NDX can continue to go higher. The broad economy will not be as fortunate. Taxes will go up,  Social services will need to do more, but States and the government will have less to go around.  Trumps team needs for the economy to do well and since it can no longer do well, the second best it pointing to the stock indices.  The FED is doing its part and the news media will be pumped with positive market moving stories until the election. Then, regardless of who wins the markets will most likely lose. 

Comments: May 15, 2020

Current position for Monday:    Primary program is Short: 37.5% Rydex Inverse NDX 2x fund.  Hot Money program is Short: 50% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 100% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 50% Rydex Inverse NDX 2X fund.  Conservative program and  Long/Money Market program are 100% Money market.  Retail sales came in lower than expected and Trump has aggravated trade war tensions with China, but by the close on Friday the markets were higher. There are some good things to consider. If a baseball game is canceled all the people who did not go have more money in their pockets than they would have had. If a celebrity concert is canceled even more money remains in the pockets of people who probably should have been spending that money in a less frivolous manner. So it is not all bad. The economy will recover and the stock market will go higher, but most likely from a lower starting point that better reflects where this economy will be when it really turns around. We have taken  a partial short position for Monday.

Comments: May 14, 2020

Current position for Friday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 50% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is 100% money market.   SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  The market recovered and turned positive later in the day after a poor start.  We remain positive but only have a partial signal. As more companies report re-openings,  investors can avoid thinking about  what is looking like a less friendly reality.  The smaller daily changes, though still large by movements of the past few years are calming compared to March and April and positive for the markets. 

Comments: May 13, 2020

Current position for Thursday:    Primary program is Long: 75% Rydex NDX 2x fund.   Long/money market program is  Long: 75% Rydex NDX 2x fund.   Hot Money program is  Long: 100% Rydex NDX 2x fund.   Conservative program is Long: 800% Rydex NDX 1x fund.  SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  Market conditions remain pretty much the same for Thursday, and the probabilities are little changed.  There may be some resistance for traders to get back in after the two day scare, but we follow the signals which are designed to work best over the long term, though we expect short term dings from time to time. This is long term investing, one day at a time.

Comments: May 12, 2020

Current position for Wednesday:    Primary program is Long: 75% Rydex NDX 2x fund.   Long/money market program is  Long: 75% Rydex NDX 2x fund.   Hot Money program is  Long: 100% Rydex NDX 2x fund.   Conservative program is Long: 800% Rydex NDX 1x fund.  SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  The market fell sharply near the close.  Our signal,  however, turned stronger for Wednesday.  Nothing in the news hadn't been said earlier, I expect the markets to recover on Wednesday even though the after market has continued lower. 

Comments: May 11, 2020

Current position for Tuesday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 50% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is 100% money market.   SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  We moved back to a partial long for Tuesday. The NDX has gone up six days in a row but none of those days was exceptionally large. The NDX had a seven day streak in December with somewhat lower daily changes. It would be possible for it to carry a few days more under the right conditions. This country and other countries in the world are starting to open up for business. Some people still don't believe the threat is real.  Russia was late to take precautions and now they have one of the highest current rates of infection. They were fifth yesterday behind the USA, Spain, UK and Italy. Today they are fourth overtaking Italy and tomorrow they should overtake the UK and move into Third. 

Comments: May 8, 2020

Current position for Monday.  All programs 100% money market. We managed to have a good week, even though we were only in the market for one day. This "Bull market" in the NDX could challenge the February highs as it is less than 5.5% away from it, but there are problems. The Baltic Dry Index which measures shipping prices Is back down to about 514.  In mid March when I first commented on it, it was 612 having gone up from earlier in the year. It reflected how China's manufacturing was slowly returning after shutting down for the virus. Now it is reflecting the sluggish return to normal which is not happening.  Google says most workers will continue to work from home at least until September. Google, more than any other company or country, has the data and knows how to analyze it.  Their behavior is telling us something.  Investors should listen. 

Comments: May 7, 2020

Current position for Friday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 50% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is 100% money market.   SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  With the volatility back to a more normal area we are back to 100% exposure.  Our signal is a partial "long" and it is the first signal we have been able to take since last week. Hopefully we will start on an up-step. The markets are cheering the return to normalcy but the best we can hope for now is nearly normal and that might not be so normal. Many companies have done well adjusting to the stay at home measures, Guggenheim Investments seems to have seamlessly shifted their workforce to a home based program.  Many cheers for them personally, as they have done it well.  A portion of our economy is badly damaged and that means a portion of the world's work force will be unemployed and not purchasing from the companies that haven't been immediately scarred. I think the market will need time to see the results of the devastation even if it is running full ahead right now.

Comments: May 6, 2020

Current position for Thursday.  All programs 100% money market. The NDX remains the strongest index and closed the day higher as the S&P fell.  Our signal is reasonably negative for Thursday but I am waiting for a more robust signal for trading under these circumstances.  I did not change our basic programs, I am only making sure that more signal components are aligned during these times of increased volatility. 

Comments: May 5, 2020

Current position for Wednesday.  All programs 100% money market. Sorry for the string of late in the day postings.  I am close to finalizing my program update and once I start it is hard to break away. The NDX pushed up through the 9000 level for a third day in the past five, but closed below it. Probabilities are only slightly positive for Wednesday but the early aftermarket is headed down. We will be back in very soon.

Comments: May 4, 2020

Current position for Tuesday.  All programs 100% money market. The market fell at the opening as word of Warren Buffett's total departure from airline stocks pushed that segment down over -5%.  The overall markets recovered, especially the NDX . Our signal turned to a partial "long" late in the day but we are only taking the strongest signals at this time. It is unfortunate but the tariffs are also impacting the purchase of medical supplies needed for the Covid 19 effort.  

Comments: May 3, 2020

Current position for Monday.  All programs 100% money market. At the current rate we should see the total number of Covid 19 deaths in the US reach 100,000 in about three weeks and the 200,000 number is looking more likely by the time this is over. That was the minimum number of deaths Fauci forecast  over a month ago and at that time there were only 2,200 deaths attributed to the virus. The 125,000 cases at that time are now almost 1.2 million.  We have a neutral signal for Monday but our probabilities do look more positive. Going forward I believe that the NDX will have a hard time going very much past where it was at the start of 2020. There was a large "gig economy" mostly off the books and the 30 million listed unemployed workers does not include them, but these people were eating and paying rent before this happened. What we have not seen and what will be coming is an increase in crime although with people home 24-7 this will mostly take its toll through commercial property break-ins.  My work on arriving at the best balance between risk and reward under these new conditions continues. 

Comments: April 30, 2020

Current position for Friday. All programs 100% money market. Apple and Amazon reported earnings after the close and the investing community did not like them, as added expenses are coming due to Vovid 19, sending those stocks lower and with them the NDX, the S&P followed them lower.  This could be the spark that wakes up the market buyers. As Spain, China and Germany rethink their recent relaxing of lockdowns because of a surge in new Covid 19 cases.  Investors must take another look at going for shelter. This virus is not going away that easily. The new USA cases hover around 28,000 to 29,000 and more a day, they are not falling as rapidly as hoped, but at least they are not resurging.   I have been busy tightening up our trading signals for this more dangerous time frame. The tightened criteria will reduce the number of less vetted trades and this should reduce draw-downs as the percentage correct should rise.  It is running very well and should be ready by Monday and hopefully it will seamlessly move between low and high volatility conditions tightening as volatility and uncertainty send shock waves through the markets. The task is to find the best  balance between maximizing gains and minimizing risks, and to adjust that mix as the market goes forward dealing with various changes in the economy, political structure, outside influences and the psychology of our leaders. 

Comments: April 29, 2020

Current position for Thursday. All programs 100% money market. We remain in the money market as finally almost all the pieces of the strange acting market are falling into place. The short version of the narrative is that the FED is, and will continue to, support the market much like 2009 and that there are enough investors that have not seen the danger of Covid 19, they know of no one who perished and with the daily infections falling in the US they expect the world to open for business any day. They like the Gilead promo while denying the negatives. And so they expect that any reoccurrence of Covid 19 in the fall will be squashed by new drugs or won't even happen, it is FOMO. (Fear of missing out).  It is most likely over done as the NDX has turned positive for the year and the uncertainty is still very high, even the VIX is telling us that. But the VIX is falling fast and should be normal in a week or two. The five largest NDX components will most likely be able to continue to do well having the financial backing to overcome this Covid damage. Since they make up about 44% of the NDX index, maybe the market's surge is not that  unreasonable. In the mean time we can limit ourselves to  the most highly probable trades and also limit our exposure. Our programs are all positive ytd and we have many years of excellent results under a wide range of conditions. I do not expect this year to be any different, we have dips during just about every year but have managed to over come every one.  I do not like to fly blind and now feel optimistic that one more seeming odd set of  market behavior is making sense.  

Comments: April 28, 2020

Current position for Wednesday. All programs 100% money market. The NDX is overweighed by a few big names MSFT, AAPL, AMZN, two variations of Alphabet and Facebook round out the list. Over 30% of the NDX price movement is caused by the first three names on my list.  Any movement in those stocks can easily skew the index. Alphabets earnings were released after the bell and that drove the stock higher, the NDX futures gained about 1% while the Dow fell. I prefer to see the different indices move in the same direction as a more unified market is easier to predict, and thankfully they usually do all move together.

Comments: April 27, 2020

Current position for Tuesday:    Primary program is Long: 30% Rydex NDX 2x fund.   Long/money market program is  Long: 40% Rydex NDX 2x fund.   Hot Money program is  Long: 40% Rydex NDX 2x fund.   Conservative program is 100% money market.   SuperAlgo program is Long: 80% Rydex NDX 2X fund. Anticipatory Trend program is Long 48% Rydex NDX 2x fund.  We moved our conservative program into the money market and reduced our exposure on our Primary, Hot Money and Long only programs. The market strength continues as investors continue to buy as the economy slowly starts to mend.

Comments: April 24, 2020

Current position for Monday:    Primary program is Long: 60% Rydex NDX 2x fund.   Long/money market program is  Long: 60% Rydex NDX 2x fund.   Hot Money program is  Long: 80% Rydex NDX 2x fund.   Conservative program is Long: 64% Rydex NDX 1x fund.  SuperAlgo program is Long: 80% Rydex NDX 2X fund. Anticipatory Trend program is Long 48% Rydex NDX 2x fund.  This was a difficult week.  Most of the movement did not make a lot of sense to me and I like to be able to point to stuff that happens and say "that is why it did this or that".  So it is odd to come upon multiple days of perplexing behavior.  It did lead me to do some research into over-bought and over-sold market conditions. So that may be handy down the line.  

Comments: April 23, 2020

Current position for Friday:    Primary program is Short: 60.0% Rydex Inverse NDX 2x fund.  Hot Money program is Short:80% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 80% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 40% Rydex Inverse NDX 2X fund.  Conservative program is Short: 48% Rydex Inverse NDX 1x fund.  And  Long/Money Market program is 100% Money market.  The NDX fell in the afternoon and closed about 1/4% lower after being higher by over 1.5% early in the day.  All our signal's components are looking for a down Friday and the news is helping the down expectations.  Tech sector job postings have dropped considerably and the word is that Gilead's vaccine is not working as well as expected.  The Baltic Dry index which is a measure of shipping cost slipped almost 5% today (I use it as a proxy to watch the level of manufacturing coming out of China) the index is at 694 and like the stock market itself it has recovered significantly from its bottom earlier this year.  

Comments: April 22, 2020

Current position for Thursday:    Primary program is Long: 60% Rydex NDX 2x fund.   Long/money market program is  Long: 60% Rydex NDX 2x fund.   Hot Money program is  Long: 80% Rydex NDX 2x fund.   Conservative program is Long: 64% Rydex NDX 1x fund.  SuperAlgo program is Long: 80% Rydex NDX 2X fund. Anticipatory Trend program is Long 48% Rydex NDX 2x fund.  We continue to hold our long position into Thursday. There was a strong rebound on Wednesday but it fell short of making up Wednesday's fall. Oil seems back to normal with Ice Brent crude over 20 and NYMex WTI over $14.  Volatility, which had slowed down a little, seems to be picking up again with back to back days of the market moving over 3%, but the +/- 10%~12% are probably past us. I should be moving back to full exposure soon. 

Comments: April 21, 2020

Current position for Wednesday:    Primary program is Long: 60% Rydex NDX 2x fund.   Long/money market program is  Long: 60% Rydex NDX 2x fund.   Hot Money program is  Long: 80% Rydex NDX 2x fund.   Conservative program is Long: 64% Rydex NDX 1x fund.  SuperAlgo program is Long: 80% Rydex NDX 2X fund. Anticipatory Trend program is Long 48% Rydex NDX 2x fund.  Oil going negative a day before expiration was not a big problem for the markets on Monday, but Tuesday the June contract fell and other oil contracts that were not "land-locked" fell significant amounts to get the market's attention. By the time the markets closed, the NDX was down over -3.7% and we were on the wrong side of it.  We are holding our position.  Although I believe the NDX is overvalued here I will continue to do what has worked over the longest period of time which is to follow our daily signals.  The economy is in a deflationary mode and prices will continue to go down for awhile. Some parts of the economy are overpriced having undergone years of self created inflation. The housing market for one, educational institutions, for another and drugs/medical for a third. Having those prices fall will be for the overall good of the population.  

Comments: April 20, 2020

Current position for Tuesday:    Primary program is Long: 60% Rydex NDX 2x fund.   Long/money market program is  Long: 60% Rydex NDX 2x fund.   Hot Money program is  Long: 80% Rydex NDX 2x fund.   Conservative program is Long: 64% Rydex NDX 1x fund.  SuperAlgo program is Long: 80% Rydex NDX 2X fund. Anticipatory Trend program is Long 48% Rydex NDX 2x fund.  As I write this West Texas Intermediate oil has fallen to " -$32"/barrel (yes that is a negative number) that happened because the May contract is due on Tuesday and the holders of that contract are trying to sell to avoid having to pick up their oil, as there are no available storage facilities. It was a game of "hot potato" and some traders just got burned. Oil that is available to ships, and June contracts are about $20 per barrel. This below zero dollars Texas crude is many miles from the coast.  I expect some commodity houses will go bankrupt with the defaults.  Other than the ripple effect from defaults, it should not continue to affect the rest of the markets. I have increases our market exposure for Tuesday to 80% of normal up from 60% that we held last week and into today.  On the virus front, in order to see the virus's progress we need to look at the growth of new cases rather than deaths, as deaths come second, and are spread over time from early to late infected cases.  Deaths will continue to climb after the new cases level off.  New daily cases in the US have leveled off in the low 30,000 -34,000 range and  are now closer to 26,000.  Of major concern are places where new cases represent more than 10% of their total as that means they will take longer to reach a peak. Russia is one of those places where 14% of their total cases happened yesterday.  In the USA Iowa had 13% of its total yesterday, Ohio 12% and Nebraska 12%.  The rest were below 10% with NY slipping to 2.5% very good for NY. So the world will reopen soon and nearly-normal may be only a year away.  

Comments: April 17, 2020

Current position for Monday:    Primary program is Long: 45% Rydex NDX 2x fund.   Long/money market program is  Long: 45% Rydex NDX 2x fund.   Hot Money program is  Long: 60% Rydex NDX 2x fund.   Conservative program is Long: 48% Rydex NDX 1x fund.  SuperAlgo program is Long: 60% Rydex NDX 2X fund. Anticipatory Trend program is Long 36% Rydex NDX 2x fund.  We moved to the long side for Monday. The NDX made an attempt to go lower during the day but the other indexes held there ground and the NDX finally moved higher late in the day. We had a good week but well off the spectacular week that we had hoped for. There are some diverging factors to contend with. Yesterday the NDX was much stronger than the S&P and today it was reversed. This type of divergence can have an influence on our signals, making them less reliable. The government guidelines may generate some buying in the markets but will certainly add unwanted pressure on the Governors to open up their states sooner than might be prudent.  I intended to increase our market exposure today but am holding off until next week when all the indices should be better aligned.  Although I continue to believe that the NDX is fundamentally over bought at this level, I also think that there will be more upside in the coming week.

Comments: April 16, 2020

Current position for Friday:    Primary program is Short: 45.0% Rydex Inverse NDX 2x fund.  Hot Money program is Short:60% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 60% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 30% Rydex Inverse NDX 2X fund.  Conservative program is Short: 36% Rydex Inverse NDX 1x fund.  And  Long/Money Market program is 100% Money market.  The NDX had a significant gain in the face of an additional 5.24 million new unemployed with the unemployment rate over 20%, and a portion will not get their jobs back. The US is still recording 30,000 new Covid 19 cases a day and the government spending is surging. Who will we sell our goods to?  Demand is down and will remain down world wide for quite a while. How does that transfer into an NDX that shows a gain for the year. The NDX closed up 0.3% ytd. and the NDX futures are up more than 1% in the aftermarket trading.  Tesla stock is up about 80% this year while car sales for Toyota dropped -35% in March.  The market looks to the future, but usually not this far out, especially without knowing what will happen in the fall. Second wave? Vaccine?  We are holding our short position another day, but not because of the fundamentals. 

Comments: April 15, 2020

Current position for Thursday:    Primary program is Short: 45.0% Rydex Inverse NDX 2x fund.  Hot Money program is Short:60% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 60% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 30% Rydex Inverse NDX 2X fund.  Conservative program is Short: 36% Rydex Inverse NDX 1x fund.  And  Long/Money Market program is 100% Money market.  We added to our gains Wednesday as the market fell.  We are holding our short position for Thursday as probabilities continue to look good for more down-side.  One thing the pandemic is teaching us is to look more broadly at risk.  Being diversified in the traditional way is not enough.  Investors with large diverse holdings in real estate could be in very big trouble if the tenants can't pay the rent. It does not matter if it is housing or commercial. The same for stocks. So far the normally riskier NDX is much safer than the S&P500.  Our programs are shining, but what if the stock markets had to close for a month?  Then we too would not be able to generate returns.  Even holding the traditional blue chip stock, say GE could cost you 90% of your equity and much more if you add inflation.  I personally try to make as much money as possible with the lowest amount of "controllable" risk.   Perhaps you should consider putting a portion of your funds with us. 

Comments: April 14, 2020

Current position for Wednesday:    Primary program is Short: 45.0% Rydex Inverse NDX 2x fund.  Hot Money program is Short:60% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 60% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 30% Rydex Inverse NDX 2X fund.  Conservative program is Short: 36% Rydex Inverse NDX 1x fund.  And  Long/Money Market program is 100% Money market.  Another strong day for the markets on Tuesday.  We reversed our position fully knowing that there could be more up-side follow-through.  And our Market Structure Level remains positive and has strengthened. The NDX 100 index closed only -.5% from where it started 2020, so there could be an effort to push the index positive for the year. All that being said our signal is negative. The world has changed enough that the NDX 100 index should reflect something as most of those companies will not be able to support the same level of earnings in 2020 as they did in 2019 and there is a whole lot of unknowns swirling around which in itself should call for caution. Also, after more than a 4% gain in a day and with no other considerations, the next day is more often than not to be a down day.  Although the recovery may take longer than expected if it comes with more demand than can be met, we may find ourselves in an inflationary spiral, with certain jobs costs escalating and some items in short supply, pushing up prices while some areas like commercial real estate will struggle and states and cities will have to raise taxes. Call that disaster #2.  

Comments: April 13, 2020

Current position for Tuesday:    Primary program is Long: 45% Rydex NDX 2x fund.   Long/money market program is  Long: 45% Rydex NDX 2x fund.   Hot Money program is  Long: 60% Rydex NDX 2x fund.   Conservative program is Long: 48% Rydex NDX 1x fund.  SuperAlgo program is Long: 50% Rydex NDX 2X fund. Anticipatory Trend program is Long 36% Rydex NDX 2x fund.  The NDX climbed on Monday making up overnight losses and closing up over 1% even as the DOW and S&P showed losses.  We reversed our position and slowly increased our exposure to 60% up from 50%. Volatility is falling off.  The turn around today is probably due to the strong leadership shown by the northeastern block of states to coordinate the reopening of businesses through a pairing of a business and medical advisory staff making the error of bad timing less likely, this is being done in the wake of a lack of federal guidance.  A comment for the downside....  WHO is investigating patients that had seemed to be re-infected with Covid 19 after recovery.  If re-infection is likely then creating a vaccine may be more difficult. There is no cure for the common cold.  

Comments: April 9, 2020

Current position for Monday:    Primary program is Short: 37.0% Rydex Inverse NDX 2x fund.  Hot Money program is Short:50% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 50% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 25% Rydex Inverse NDX 2X fund.  Conservative program is Short: 30% Rydex Inverse NDX 1x fund.  And  Long/Money Market program is 100% Money market.  The S&P index had a good gain but the NDX was barely positive on Thursday. The NDX may  have rebounded too much from it lows.  We now have over 17 million people unemployed, tripling the unemployment rate from February to 10.5%.  Looking at the 1918 stock market prices we have to consider that the market had already fallen by -35% during the year prior to the virus hitting, so comparisons are difficult as this time we started at all time highs.  Making an economic model will be very difficult since there are too many unknowns. Will the virus return in the fall. Will there be treatments available. Will the $ cost to the governments cause an increase in taxes to an extent that slows growth and recovery.  How many of the unemployed will never be rehired due to cost cutting, restructuring and business closures. This makes buying or selling stock for the long term a coin flip.  Short term makes good sense.

Comments: April 8, 2020

Current position for Thursday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 37.5% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is Long: 40% Rydex NDX 1x fund.  SuperAlgo program is Long: 50% Rydex NDX 2X fund. Anticipatory Trend program is Long 30% Rydex NDX 2x fund.  Wednesday's rally was was partly due to Bernie Sanders leaving the race but more so to talk of reopening the economy.  My gut says the market should not be going higher but we have a "long" signal for Thursday and we have taken our long positions in alignment with the probabilities.  The volatility remains elevated and interest rates remain low.  Stimulus checks will be coming but I expect that even when the economy opens the population will be waiting to see if there is a  "second coming" of Covid 19,and wait to fully engage until the fall, so the recovery will be slow. 

Comments: April 7, 2020

Current position for Wednesday:    Primary program is Short: 37.5% Rydex Inverse NDX 2x fund.  Hot Money program is Short:50% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 50% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 25% Rydex Inverse NDX 2X fund.  Conservative program is Short: 30% Rydex Inverse NDX 1x fund.  And  Long/Money Market program is 100% Money market.  It took all day for the market to turn lower. We are holding our short position another day in expectation of a more significant down day.  When markets go lower the volatility generally increases that is usually good news for us as increased volatility makes the markets easier to read resulting in more reliable trades and more trades as well as larger size daily moves. The three together make for increased returns as can be seen as recently as 2018 when the S&P lost 6.4% and our SuperAlgo program more than doubled.  Going back to 2008 when our only program was our Primary program that program returned +76.9%, so if all goes well we have some good things to look forward to.  If you are thinking about having your money managed give me a call or send me an Email as this is a good time to get started. 

Comments: April 6, 2020

Current position for Tuesday:    Primary program is Short: 37.5% Rydex Inverse NDX 2x fund.  Hot Money program is Short:50% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 50% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 25% Rydex Inverse NDX 2X fund.  Conservative program is Short: 30% Rydex Inverse NDX 1x fund.  And  Long/Money Market program is 100% Money market.  Strong up day in celebration of what looked like a slowing of the infection rate. Supporting the move from our viewpoint was our long position and the Market Structure level going positive that I mentioned on Friday.  The Market Structure level continued to climb today but our signal turned short. And it is a strong short. The probabilities are indicating a much smaller market move for Tuesday perhaps giving up a bit of the over enthusiasm we saw today. There are some fundamental factors that need to be taken into account. The NDX is now only -7.5% below the start of the year. The drop in GDP should easily account for that, and just because we see a leveling off of new infections does not mean people are about to get on a plane or take a cruise next week or next month. This will hang over us for a while. Trump may say all clear but that can't make people go back to normalcy.  Businesses will suffer and so will the market.  I don't think this small market dip takes care of the whole problem.  Perhaps the S&P is a better reflection of difficulties that we face.   

Comments: April 3, 2020

Current position for Monday:    Primary program is Long: 17.5% Rydex NDX 2x fund.   Long/money market program is  Long: 25% Rydex NDX 2x fund.   Hot Money program is  Long: 23.3% Rydex NDX 2x fund.   Conservative program is 100% Money market.   SuperAlgo program is Long: 50% Rydex NDX 2X fund. Anticipatory Trend program is Long 25% Rydex NDX 2x fund.  Our signal switched to a partial long for Monday. For the most part our programs were up for the week. Our "Market Structure Level" turned from negative to flat entering the transition zone to a more positive overall market.  The level had turned negative on March 4th and the NDX fell over 15% since then.  I should be able to tell better this coming week if the level continues higher. If the level does move positive it may only be temporary and we will have to watch it more closely to see if it stays positive, should have a very good idea by the week following Easter.  The volatility seems to be slowing down some, so we will be gradually increasing our exposure levels. 

Comments: April 2, 2020

Current position for Friday:    Primary program is Short: 17.2% Rydex Inverse NDX 2x fund.  Hot Money program is Short: 22.9% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 36.5% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 19.5% Rydex Inverse NDX 2X fund.  Conservative program and  Long/Money Market program are 100% Money market.  We have a reduced exposure short for Friday.  I have been very busy with the program and so far very pleased with the progress. It appears that the next week or so will be lower, but the daily trades are much more reliable.

Comments: April 1, 2020

Current position for Thursday:    Primary program is Long: 33.75% Rydex NDX 2x fund.   Long/money market program is  Long: 33.75% Rydex NDX 2x fund.   Hot Money program is  Long: 45% Rydex NDX 2x fund.   Conservative program is Long: 36% Rydex NDX 1x fund.  SuperAlgo program is Long: 45% Rydex NDX 2X fund. Anticipatory Trend program is Long 27% Rydex NDX 2x fund.  Our programs are now running at 45% of our normal exposure.  Market volatility remains very high but off the peak levels.  I have mentioned many reasons for this market to go lower and today I will give you a few positives.  In the US, although the number of new cases is growing each day, the rate of growth appears to be slowing.  South Korea seems to have it well under control and Italy who got it very bad is now past the peak.  The stock market always responds in advance to positive events and we can be pretty certain that this virus will pass and we will be better prepared for the next one. 

Comments: March  31, 2020 

Current position for Wednesday: All programs are 100% money market.  China has extended college entrance exams by a month from June 7th to July 7th. with China's virus curve about 6 weeks ahead of the US we may be looking at August for transition back to normal, a five month shut down would do a lot of damage. Mixed signal for today. We will wait for a stronger one.  Our programs' first quarter returns and not bad, but they are much better than the first quarter of 2019.

Comments: March 30, 2020

Current position for Tuesday:    Primary program is Long: 26% Rydex NDX 2x fund.   Long/money market program is  Long: 26% Rydex NDX 2x fund.   Hot Money program is  Long: 33% Rydex NDX 2x fund.   Conservative program is Long: 26.4% Rydex NDX 1x fund.  SuperAlgo program is Long: 33% Rydex NDX 2X fund. Anticipatory Trend program is Long 21% Rydex NDX 2x fund.  Strong up move caught us on the wrong side for a second day in a row.  We are now long but the strong close has me concerned that there may not be any follow through.   It was good to see that more governors are issuing stay-at-home orders and more sheriffs are going after the "above the law" violators.  Virginia's recent order runs through June 12th.  This is what we need to keep the markets moving higher as there is plenty to support the other argument.

Comments: March 29, 2020

Current position for Monday:    Primary program is Short: 13% Rydex Inverse NDX 2x fund.  Hot Money program is Short: 16.5% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 33% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 16.5% Rydex Inverse NDX 2X fund.  Conservative program and  Long/Money Market program are 100% Money market.  I have just about finished updating our programs to better balance the extremes that we saw in 2008 and 2020 with the more normal conditions of the in-between years. We have taken a partial short position for Monday.  The volatility remains very high but is off its peak.  Last week the markets had a strong bounce, even in the light of worsening Covid 19 news.  Since there have been a number of months, and many countries worth of Covid 19 data, we can see that the patterns are similar only compressed or extended based on how well they have managed their response to the virus.  NYC is a special case with a high density population and its dependency on public transportation that includes the subway system which is both a blessing when running smoothly and a curse during a pandemic.  In the US we shall see eruptions of virus for a number of months as the more capable governors and mayors pick up the slack of the administration and move forward to suppress the pandemic, while the less capable continue to allow for masses of people to congregate.  Many religious leaders are especially at fault in this regard even as sports and entertainment have shut down.  For the investing public a good deal of the markets direction will depend on how much they trust what their leaders are saying . When our president says he has ordered General Motors to build ventilators some investors will believe him and some will not. Some will value his judgment and management skill in dealing with this emergency and some will not.  The virus on the other hand will only respond to the level of enforced containment.  The population will somehow have to pay for the trillions of dollars that will be spent on containment and recovery, unemployment will remain elevated, taxes will go higher and business sales will drop. I do not believe that the market has put in its bottom for 2020. 

Comments: March 26, 2020

Current position for Friday:    Primary program is Long: 26.3% Rydex NDX 2x fund.   Long/money market program is  Long: 26.3% Rydex NDX 2x fund.   Hot Money program is  Long: 35% Rydex NDX 2x fund.   Conservative program is Long: 28% Rydex NDX 1x fund.  SuperAlgo program is Long: 35% Rydex NDX 2X fund. Anticipatory Trend program is Long 21% Rydex NDX 2x fund.  I never like following a strong up-day with a "long", but the signal looks good for a continuation in the NDX.  I don't  expect the rally to continue for very many days as the news isn't the best. The US is now number one for the most new cases today, twice what any other country added, but some of that number is due to the testing kits that are starting to be used.  We have now surpassed Italy in total cases and second only to China but by Friday or the weekend we will be number one in that count also. Nothing to cheer about. Our daily percentage increase in new cases is now about three times that of Italy. Our unemployed jumped by a factor of 12x from last week. Many of these people will not be going back to work when the work shutdown is lifted because companies now have an easy way to cull the herd and the economy will not "snap", back continued fear will keep people at home for a while past the lifting of restrictions.  I expect to see the number of job cuts at about 5% to10% of the layoffs and maybe if this stays bad into the summer, up to 15%. That would more than double the 282 thousand unemployed of last week.  Even the Baltic Dry Index which had bounced off its low and flattened is starting to slip lower.  Our market exposure is now 35% and will will continue to adjust it to compensate for the volatility. Our system is designed to to flatten our risk curve to avoid risk "spikes".

Comments: March  25, 2020 

Current position for Thursday: All programs are 100% money market.  We remain in the money market as we have a mixed signal with possible large price movements in either direction.  Wednesday was a good example with good size swings and a split in direction between the S&P and NDX.  Virus test kits are still backlogged, as are masks. The number of new infections per day do not seem to be growing in Italy though the daily number is still high. We need to see that number decline as we are a few weeks behind Italy.  

Comments: March  24, 2020

Current position for Wednesday: All programs are 100% money market.  We moved into the money market after the strong gain on Tuesday,  The probabilities flattened for Wednesday removing our edge.  On one side Mr. Trump wants to re-open business in a couple of weeks which could either save the economy or exacerbate the pandemic which if carried to an extreme would eliminate the economy.  Very risky in my view.  With test kits finally filtering into use in the USA it is difficult to make any sense of the active case numbers. Best path would be to follow China's lead, they are lifting restrictions two months after imposing them. The US has not fully imposed restriction nation wide, and the restrictions that were imposed by a few states were just imposed this past week so late May ,if all goes well, would make sense. But we will see what the stock market thinks on Wednesday. 

Comments: March 23, 2020

Current position for Tuesday:    Primary program is Long: 25% Rydex NDX 2x fund.   Long/money market program is  Long: 25% Rydex NDX 2x fund.   Hot Money program is  Long: 33.3% Rydex NDX 2x fund.   Conservative program is Long: 27% Rydex NDX 1x fund.  SuperAlgo program is Long: 33.3% Rydex NDX 2X fund. Anticipatory Trend program is Long 20% Rydex NDX 2x fund.  We were in the money market on Monday as the markets had another large loss for the S&P along with a small gain for the NDX.  We moved back long for Tuesday at 33.3% of our normal fully long position.  The Senate and House stimulus bills will be worked into a reasonable bill and that should hold the markets up for a short time. (I corrected some of last weeks dates from my posts today). I have gone through some of the key elements in our active program from 2008 and am working to evaluate those influences in today's markets in light of the twelve years that have past since then.....almost done. 

Comments: March  20, 2020

Current position for Monday: All programs are 100% money market.  This past week was one of the market's worse ever with the S&P losing 15%.  Even our programs slipped some, coming off all-time-highs, with our most aggressive program, SuperAlgo, losing 3.6%.but remaining +8.9% ytd.  With medical personnel starting to get Covid 19 test kits in the US  the number of active cases in the US more than doubled from last Friday to this Friday. We will have to wait for more kits to arrive to determine how many cases we really have.  The Baltic Dry Index continues to climb indicating that China is slowly expanding its shipping.  In the words of Bob Dylan, "The times they are a-changin." 

Comments: March 19, 2020

Current position for Friday:    Primary program is Long: 18.5% Rydex NDX 2x fund.   Long/money market program is  Long: 18.55% Rydex NDX 2x fund.   Hot Money program is  Long: 25% Rydex NDX 2x fund.   Conservative program is Long: 20% Rydex NDX 1x fund.  SuperAlgo program is Long: 25% Rydex NDX 2X fund. Anticipatory Trend program is Long 15% Rydex NDX 2x fund.  Starting with the good news both the price of oil and the Baltic Dry Index (mentioned yesterday) went higher a positive sign for the eventual economic recovery.  So far the markets are behaving as I mentioned last Friday, "Expect a shaky start to the week, some recovery and stabilizing, then in a week or few, another leg down unless some good news comes on containment." .  I still expect to get another leg down soon, and hopefully not this Friday.  The volatility is exceptionally high and once again I cut back on our exposure level across all programs.  It is now at 25% of normal.Our returns to date on our programs are all positive and within the normal range for the first quarter and the biggest risk for us is being overexposed to the markets.  Purely from an economic point of view.  This is a market of extremes where a well-run response to the virus, like we saw in China and South Korea, would lead to a reasonable fast recovery with overall only moderate damage to the economy and would bring in capital sending the markets higher; while the continued bungling response will lead to a disaster with market values going down a great deal further, with many bankruptcies and potentially even causing the US to slip from its long-held top position as the economic leader of the world. With such extremes of potential outcomes the market remains dangerous and volatility is expected to remain elevated.  There is a lot at risk but it isn't really that hard. (1). quarantine, (2) exhaustive testing, (3) targeted economic aid.  Many excellent stimulus ideas are available but the administration's $$ for everyone is not one of them. And it looks too much like $$ for votes.  Corporations need to also be responsible for their part. Perhaps the corporations that recently bought back their own stock to boost their stock price and bonuses, could start selling those shares to free up working capital even if it means lower stock prices. Hard measures in hard times before bailouts.  

Comments: March 18, 2020

Current position for Thursday:    Primary program is Long: 25% Rydex NDX 2x fund.   Long/money market program is  Long: 25% Rydex NDX 2x fund.   Hot Money program is  Long: 33.3% Rydex NDX 2x fund.   Conservative program is Long: 27% Rydex NDX 1x fund.  SuperAlgo program is Long: 33.3% Rydex NDX 2X fund. Anticipatory Trend program is Long 20% Rydex NDX 2x fund.  Our signal was unstable near the close.  Normally when we can, we would move to the money market, but the change came too late...  The proposed stimulus bill would give everyone some money. This is better than the payroll tax plan but still not very good. There are very many people who, even though we like money, do not need to spend it. The money should be sent to  those that lost their jobs or have a very low stream of income. They will spend it, they need it and if they do not get it many will become homeless. On another front we see that  the Baltic Dry Index is at $612 this index represents the cost to ship dry goods and has fallen sharply since September when it was over $2,000, but has gone up since February while the price of oil has gone down since February when it was over $50 to a price of $22 today. The BDI encompasses both the demand for shipping and the cost of shipping and the price of oil is part of the transportation cost. This means to me that China has picked up its shipments. In or out or both. They said that they had resumed some manufacturing and now, judging by the price of the BDI, that appears to be correct and is good news for us if we can quickly get out from under this virus. 

Comments: March 17, 2020

Current position for Wednesday:    Primary program is Long: 25% Rydex NDX 2x fund.   Long/money market program is  Long: 25% Rydex NDX 2x fund.   Hot Money program is  Long: 33.3% Rydex NDX 2x fund.   Conservative program is Long: 27% Rydex NDX 1x fund.  SuperAlgo program is Long: 33.3% Rydex NDX 2X fund. Anticipatory Trend program is Long 20% Rydex NDX 2x fund.  Good gains in the market as the White House divulged plans for extraordinary stimulus, even in the face of falling oil prices.  We have moved "long" at 33% of our normal exposure level for the signal. The federal government is still way behind the States in handling this crisis and unless the stimulus is well thought out it will misspend the funds and will run out when they are really needed. If a store is closed it is closed. If there is nowhere to go, no one needs a new car. It is better to insure that the health facilities are funded and people are fed, period.   The government must lead the lockdown.  If the lockdown holds and stops the virus, business will come back in the fall. If the lockdown fails, businesses will still be locked down through winter and many will not come back. Welcome to the depression.  The market seems to be behaving well for the current level of risk. 

Comments: March  16, 2020

Current position for Tuesday: All programs are 100% money market.  Going back over 27 years Monday produced the largest percentage drop in both the S&P and NDX.  This started by the FED cutting rates again and sending a panic alarm and was brought home by some (in fact smart moves) local and state governments closing bars and restaurants. This hit home, business will be hurt by more than a fall in profits. They will have losses and many will be forced to close for good. China has their problem under control with a mostly flat-lined rate of new infections, the US and the rest of the world has a rising rate. Optimistically things will get better in three months if all states move in unison to isolate the infected, but realistically there will be groups that will resist enforcing the isolation, or resist being isolated and those that are "too important" to play by the rules so expect losses in both the second and third quarter. The real estate indices are plunging the URE Pro Shares ultra real estate EFT fell over 33% today and is off almost 60% from its high. The HGX  housing index fell about 17.5% today and is off about 40% from its high. And housing prices have not yet fallen.  Apple stock fell almost 13% today and that stock has lost 50% or more of its value on about 5 occasions since it went public. If it were to drop 50% this time it would still have another -35% to go from here. And if the NDX would fall almost as much, say another -28% it would be just about where the NDX was on inauguration day, January 20th 1917 at 5063 it closed today at 7020.  But that is just talk. Our accounts avoided today's drop since we were in the money market.  Normally we would expect a sharp jump after a strong Monday fall, especially since our bottom indicator was triggered again,  but we stayed in the money market as there were other considerations that came in play. We have too few of these giant move days to reliably define the next days move statistically but I expect it to have a smaller range and be the start of some short term sense of stabilizing prior to another drop, maybe later this month or early April. We are ready to trade again,  just waiting for a reliable place to get in, in either direction.  

Comments: March  13, 2020

Current position for Monday: All programs are 100% money market.  Our programs  just closed out our best week ever and all accounts closed at all time highs. (even while being out of the market for the first three days this week.)  The markets  however, did not fare well closing lower for the week. The NDX's negative 9.3%  on Thursday followed by a positive 10.1% jump on Friday resembles the price movement in early 2001 where the NDX fell 9.1% on January1st and gained 18.8% on January 2nd. That did not end well as the market went on to lose almost 55% of its value in the following 9 months. (and even more after that). 

From here the economics gets tough if the virus stays through the summer.  Oil prices jumped on Friday and an effort will be made to prevent  them from falling much further to at least give the appearance that there is no economic collapse. Companies that are over extended on debt will falter unless they can get extensions on their already shaky loans.  Even with the ultra low mortgage rates and a spectacular market index jump on Friday both LEN and TOL housing stocks closed lower, as a poor economic outlook will sink the current robust housing market. The "active" Covid 19 cases have jumped again. The federal Government is starting to take this seriously which is good (but late to the disaster).  Expect a shaky start to the week, some recovery and stabilizing, then in a week or few, another leg down unless some good news comes on containment.  

Comments: March 12, 2020

Current position for Friday:    Primary program is Long: 30% Rydex NDX 2x fund.   Long/money market program is  Long: 30% Rydex NDX 2x fund.   Hot Money program is  Long: 40% Rydex NDX 2x fund.   Conservative program is Long: 32% Rydex NDX 1x fund.  SuperAlgo program is Long: 40% Rydex NDX 2X fund. Anticipatory Trend program is Long 24% Rydex NDX 2x fund.  The S&P500 logged its  largest drop in 27 years on Thursday and is down over 23% from the start of the year, and there is probably more to come over the following months.  The stock market's problem'\s started many months earlier with the tariffs. Steel and Aluminum tariffs were announced two years ago and since then Alcoa Aluminum has dropped from 60 to 7.5.  Ford has gone from 13 to 5.35 and US Steel from 47 to 5.07. It also affected our farmers with CAT going from 170 to 92.25. Certainly the virus is now crushing many other industries and the virus has not even started to do major damage in terms of deaths, and if properly handled it might never reach that point. The virus is causing many to be out of work, and as some companies will not be able to hold on, so when there is a recovery there will be other jobs lost.  As for the recent market movements I am expecting a bounce tomorrow. Of course going into the weekend people get fearful of bad news, but in my opinion we already had more than enough of that and the markets have fully reacted to it for the time being, and should start a leveling off. The VIX and our other measures of volatility have reached excessive levels.  I expect that there is more market down side to come over the following months. We have taken a "long" position for Friday at an exposure level of 40% of our normal commitment. We are keeping our exposure low to counter the raised volatility. There is always a risk of loss whenever you are in the market, so that risk must be managed (The aftermarket is down about 2.5% as of this writing.).  The last large market drop ran from August of 2018 to the end of December 2018 and although the drop was comparable is size, the speed of the current drop has sent the volatility to levels roughly twice what we saw in 2018 and more on a par with what we encountered in 2008.  I will enter the probability levels next week if I find that the reliability has returned. The active cases of Covid 19 continue to grow but the rolling 3 day change has decreased today after a sharp jump yesterday. After I get more data we will use a five day rolling average. The death rate unfortunately continues to tick higher.

Comments: March 11, 2020

Current position for Thursday:    Primary program is Short: 22.5% Rydex Inverse NDX 2x fund.  Hot Money program is Short: 30% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 30% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 18% Rydex Inverse NDX 2X fund.  Conservative program is Short: 18% Rydex Inverse NDX 1x fund.  Long/Money Market program is 100% Money market.  Wednesday's drop fell enough intraday to trigger our bottom signal, this is the second time this week. When it hit on Monday Tuesday had a large bounce. This time I believe it will not hold as many of my other components are severely negative. We continue to take care and have reduced our overall exposure level to 30%. The economic effects of the virus continue to spread with school closures and the cancellation of sports events. Oil prices which recovered some yesterday fell again today.  Our tracking of active Covid 19 cases shows a jump by over 4,000 today up from a 2500 change yesterday and 1500 earlier in the week. The  death rate has also crept up slowly in each of the past four days. From 3.36% to 3.67%. As more test kits become available this number will drop, and active cases will rise, as more infected will be counted, however both numbers could easily be misinterpreted.  If you are young and not worried, you might look into cheap air fares as prices have come down by about half in the past few weeks, however we are in a pandemic which means that the virus can not be contained.  Only China seems to have its problem under control through a rapid response and quarantine, the rest of the world has not responded quickly and so the term pandemic is accurate. 

Comments: March  10, 2020

Current position for Wednesday: All programs are 100% money market.  Tuesday markets had strong gains but seem to be giving back a big chunk of it in the aftermarket. Some of the gain could be attributed to a potential cut in payroll taxes.  But the market had reached an oversold condition when it triggered our bottom indicator on Monday.  Active Covid 19 cases jumped by 2500 since yesterday, well past the 1500/day rate of the past few days.  I was glad to see Tuesday's bounce since it came at a proper time, still the level of volatility is being compromised by the fear of what else is coming.  It is more than likely we will not be able to avoid a recession. Our market structure level turned negative five days ago and our interest rate level has moved into a deflationary mode, so the recession indicators are strong. 

Comments: March  9, 2020

Current position for Tuesday: All programs are 100% money market.  Monday's drop was exceptional, there were only three larger drops in the S&P during the past 27 years. This plunge was mostly due to the drop in oil prices which exceeded 25% over the weekend.  Although China has one of the worlds largest crude oil reserves  it imports most of the oil that it uses, and when manufacturing was severely curtailed do to Covid 19 its purchases fell (along with similar drops outside of China) causing the price of oil to weaken. The S&P is now down -15% year to date and has given up all the gains it made since February of 2019. Normal markets will have major declines, but this is not a normal market as it has many unknowns. We have a money market signal for Tuesday but  In normal times we would expect a sharp bounce in the markets for Tuesday as our bottom signal was triggered. Tuesday  may still go higher, and I would be glad to see it, but the market is currently too dangerous for me to step into at this time,  although we may be just few days away from returning to normality.   We can make very good returns under normal conditions so we can wait a few days for a better risk reward ratio. Gasoline prices should come down by the end of this week. 

I started tracking active cases of Covid 19 and they are growing at the rate of 1500 per day.  Hope to see them fall soon.   

Comments: March  6, 2020

Current position for Monday: All programs are 100% money market.  Under these critical conditions I am looking at our signals with a much more intense scrutiny where "good" is not "good enough".  I had been looking for a reliable site to track "active" cases of Covid 19. I think that tracking "active" cases is the best tool for the regular person to follow to determine whether the virus is weakening or strengthening.  Thanks to a client in Washington State I now have a way to do it and will pass along information as it develops.  The markets are now moving because there are many unknowns. Normally the data tells us that the economy will move a little this way or that and the market movement reflects that assumption.  Now we have larger swings where things can change rapidly and the economic consequences can move in a wide range. These conditions require more caution.  

Comments: March  5, 2020

Current position for Friday: All programs are 100% money market.  Our signal became unstable near the close and we went into the money market. With our exposure cut by 50% and the 33.3% of the time we spent in the money market over the past three weeks our overall market exposure is low. This is appropriate considering that this has become a news driven market. Our program does not "do" news. Rather, it rides the waves set up internal to the market by the markets response to the news. As the volatility increases the waves get bigger and easier to read, we get more tradable signals and benefit from the combination of greater reliability of signals, additional  signals and larger daily changes.  We normally get about half the "news" driven signals correct and most of the wave driven signals. So far we have not had the increase in trading days because the daily swings in data have caused our signals to fluctuate near the close.  We have also run counter to a number of "big news" days slowing our progress. This week we made only  two trades and the result was a small overall gain.  Having traded these programs for over fourteen years I am confident that we will see the normal patterns re-emerge very soon.  Still it has only been a small number of days since the market disruption. Test kits are still not readily available in the US and so more "news related" swings will effect the market as newly tested people found positive will add to the sick totals.   

Comments: March 4, 2020

Current position for Thursday:    Primary program is Long: 18.75% Rydex NDX 2x fund.   Long/money market program is  Long: 25% Rydex NDX 2x fund.   Hot Money program is  Long: 25% Rydex NDX 2x fund.   Conservative program is 100% money market.  SuperAlgo program is Long: 50% Rydex NDX 2X fund. Anticipatory Trend program is Long 30% Rydex NDX 2x fund.  Big rebound started last night as the polls closed and Biden started to win states. It moved even higher on Wednesday as news came in that congress agreed on a multi billion dollar package to battle Covid 19.  Interesting to note that when people can get treated for the virus for free that is a form of socialized medicine.  Which most would agree, at lease in this case, is for the greater good of the population.  Our signal is a partial "long", and we remain at a reduced 50% level due to the volatility and level of uncertainty.  The market continued to run higher after we placed our trade and the market probably does not have much upside left. Our Market Structure turned negative today and if it stays that way over the next few days we most likely will see another hard market down turn early next week. As nothing has happened to end the virus problem.  

Comments: March  3, 2020

Current position for Wednesday: All programs are 100% money market.  The NDX fell over -3% after the FED cut interest rates by 1/2%. The government's wrongful relying on a rate cut to stem a possible pandemic did not instill confidence.  Bringing forth a strong plan to counter the epidemic would be more likely to halt the market retreat.  The 1918 flue pandemic came in three waves, one in the spring, one in the fall and another in the following spring. The second wave was the killer. Unless there is an actual plan in place where investors can expect to see an economic turn around in a few months the stock market out flow will continue.  Our government has always "appointed" the heads of important agencies, Democrat or Republican, the method of appointing rather than finding the best  person for the job from work experience is a disservice to our nation.  The agencies usually muddle by on the backs of long time employees but at critical times it falls apart. We saw it in FEMA in past years with disaster relief, and we are watching it again.  Investors will look past the end of the expected economic decline and start  buying,  but they will need a reason to believe.....  Tuesday's intra-day market swings did not provide us with a reliable signal,  so we are waiting for a more reliable signal to get back in.

Comments: March  2, 2020

Current position for Tuesday: All programs are 100% money market.  Markets continued to bounced off an oversold position that occurred on Friday. The NDX moved over 8.5% from Friday's low to Monday's high. This oversized up-move may provide traders a good place to sell more shares.  We had a reduced "long" position but our job isn't to get the maximum return regardless of market conditions, it is to get the maximum returns while reducing overall risk. Which we have done over many years. This  means reducing exposure or moving into the money market under less reliable conditions. Still we had a good return for the day in most of our programs.  If this was a jump on expectations that there will be some government stimulus to solve the current Covid 19 induced economic problem then  it is misplaced.  Stimulus will not put people in airplanes and cruise ships. It will not bring customers to failing businesses. That will need to wait for the end of the virus scare.  However since the markets do anticipate rather than react to expected events we could expect the markets to look past the reduced earnings that will come over the next two quarters. But today's jump is probably too soon. 

The Financial Times had an excellent interview with microbiologist Peter Piot who helped discover Ebola and led the fight against HIV aids.  In his view since we have no vaccine we must rely on containment.  The Covid 19 death rate is much less than Sars but it is much more contagious.  The virus could be over in a few months if properly contained.  

Comments: February 28, 2020

Current position for Monday:    Primary program is Long: 18.5% Rydex NDX 2x fund.   Long/money market program is  Long: 18.5% Rydex NDX 2x fund.   Hot Money program is  Long: 25% Rydex NDX 2x fund.   Conservative program is 100% money market.  SuperAlgo program is Long: 50% Rydex NDX 2X fund. Anticipatory Trend program is Long 30% Rydex NDX 2x fund.  The market recovered all of its -3.5% early morning drop and closed up. That may or may not be good news since it did it within two minutes of closing and too late to make a trade adjustment from the partial long position it held for most of the day. So we remain partially long. The after-market is up strong, but I expect to see more swings on Monday that fall below today's close. It should not take too much to trigger another bottom indicator, but I don't get the sense that the -13% drop in the NDX off its high is really the end of the down turn.  Sudden market drops are not always expected and they are actually anomalies when you compare them to the number of more normal market situations. When they happen we work to reduce our exposure to the markets until the markets become more normal and when markets are more normal we utilize increased exposure. It works very well when both are considered. 

Comments: February 27, 2020

Current position for Friday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 37.5% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is Long: 40% Rydex NDX 1x fund.  SuperAlgo program is Long: 50% Rydex NDX 2X fund. Anticipatory Trend program is Long 30% Rydex NDX 2x fund.  Thursday had the worst drop in the NDX index since 2011.  The S&P is now down -7.8% ytd and the NDX is down -3.4% ytd.  We cut our "conservative" program's position to 40% exposure and held the rest at 50% of their normal exposures.  It is strange to see that China's Shanghai Index has gained steadily since its initial drop in early February and it has very low volatiliy.  Thursday's fall triggered our bottom indicator which often leads to a turn around the next day or the next few days. It looks like we are very close to the first level of support or maybe an actual short term bottom.  This market drop was very swift and compressed coming immediately off of an all time high and starting under low volatility conditions. Unlike 2008 the economics remain positive, with the ten year note interest rate at an all time lows. This should encourage home buying, which is always a boost to the economy.  

Comments: February 26, 2020

Current position for Thursday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 37.5% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is Long: 50% Rydex NDX 1x fund.  SuperAlgo program is Long: 50% Rydex NDX 2X fund. Anticipatory Trend program is Long 30% Rydex NDX 2x fund.  We held our reduced long position into Thursday.  If the Covid 19 problem lasts much longer both the mainstream democrats and Donald Trump will have an unstopable problem. The Trump administration  cut the budget of the Center for Disease Control in 2019 by 4.5% and their proposed budget would cut it another 10.3% from 2019. (www.CDC.gov) At the same time the Stock Market is getting hit by ramifications from the virus. The focus is shifting from "how well my 401k is doing" to "what will my health plan cover". When you consider that Universal health care is a large part of Bernie Sanders mantra you see the point. And although Mr Sanders' policies should  benefit the overall population they most likely will not be good for the markets which will reinforce the focus on health coverage over the markets. 

 We have another "long" signal for Thursday but there remains a strong chance that the drop is not over and a new short term lower low for February will occur (which is why I have not increased our exposure at this time).  Were that to happen the markets would become over extended on the down side and provide a better base to launch a rally.  Mr Trump will address the Covid 19 issues today at  6PM eastern time.  And that could provide some market support for Thursday.  

Comments: February 25, 2020

Current position for Wednesday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 37.5% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is Long: 50% Rydex NDX 1x fund.  SuperAlgo program is Long: 50% Rydex NDX 2X fund. Anticipatory Trend program is Long 30% Rydex NDX 2x fund.  We waited out the past two days and stayed in the money market.  The S&P has fallen 7.6% over the past four days and the NDX lost 9.1%.  Our signal is fully long and I believe that their has been enough of a drop to begin moving back into our program.  We are starting by only utilizing 50% of our normal position. There is a very good chance that the Covid 19 disruptions will hit the US either directly though restrictions on travel or through disruptions in goods and services.  The economic impact will be felt through decreases in sales in many sectors  and with some already weak companies going under. 

Comments: February 24, 2020

Current position for Tuesday: All programs are 100% money market.  We remain in the money market for Tuesday. Generally the market makes a sharp rebound after a sharp drop on Mondays, and even though the after market is significantly higher this evening there could be more selling even on Tuesday. The Covid 19 virus is causing an overall adjustment in the value of the market since it is too high relative to risk and part of the adjustment is due to  the reality that corporate profits have been hurt and are causing additional secondary profit drops along the chain.  Italy was in the news. It wasn't the amount of infections or deaths but that businesses will be hurt with closures and reduced patronage as towns get locked down. I do not expect a wide scale pandemic, but I do expect to see more problems to arise in many areas and a broad impact on profits across all areas. It may not be very bad but markets fear the uncertainty. On February 3rd the Shanghai index dropped nearly 9%, since then it has recovered about two thirds of the loss. This indicates to me that China may already be on the mend. However, they did act decisively building a number of 1000 bed hospitals within days. And made a great effort to stop the spread.  How well will other countries handle the same situation if and when it arises? And if they don't or can't, where will it lead? So I don't expect a fast and complete market recovery in the US. I am waiting for this shock to filter through our program so that we will be back in sync and regain our normal trading edge. 

Comments: February 23, 2020

Current position for Monday: All programs are 100% money market.  This was only our program's second down week this year but the market behavior seems strange. Although we remain overall up for the year to date and up for the last three weeks something is amiss and I believe it to be a disruption of the normal market currents due to the random news events regarding the Covid19 virus. Our signal under normal conditions would be long for Monday but I believe it is best to further evaluate the overall market influences.  The first rule of making money is to make sure we do not lose money and we won't trade just to trade.  There are other factors, such as the democratic primary where Mr Sanders big win in Nevada (getting more votes than the next three contenders), could give some traders the chills. But that type of input is not as dangerous to us as the random scares of the Covid. 

Comments: February 20, 2020

Current position for Friday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 50% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is 100% Rydex Money Market.  SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  The NDX dropped below -2% in the early part of the day and recovered a little more than half by the close. The reason could have been any one of the reasons I gave yesterday with a little help from a  poor performance by Bloomberg in the Democratic debate while Donald Trump did not make any friends among independents with his heavy handed meddling in the Department of Justice affairs. Hello Bernie. The progressives did better than the rest of the pack and that's not what the market wants to hear. The 10 year note yield fell through the 90 day Tbill yield and although it has done this many times over the past eleven months it tells us that a recession could be in the wings. We stayed long but reduced our overall market exposure.

Comments: February 19, 2020

Current position for Thursday:    Primary program is Long: 75% Rydex NDX 2x fund.   Long/money market program is  Long: 75% Rydex NDX 2x fund.   Hot Money program is  Long: 100% Rydex NDX 2x fund.   Conservative program is Long: 100% Rydex SPX 1x fund.  SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  The market jumped higher and gained throughout most of the day, a rather strong showing considering that the underpinnings are somewhat shaky with politics, corona virus, slowing consumer spending and extended tech sector. But maybe investors are looking beyond, expecting Trump or Bloomberg to win the election later this year in what would seem to be a win-win situation for short term gains in the market.  I spent the day working to strengthen our program against gray-area signals as it is better to spend time out of the market when the signal strength is only mildly positive. Long signal looks good for Thursday and the NDX should hit the 10,000 mark over the next few weeks. 

Comments: February 18, 2020

Current position for Wednesday:    Primary program is Short: 37.5% Rydex Inverse NDX 2x fund.  Hot Money program is Short: 50% Rydex Inverse NDX 2x fund.   SuperAlgo program is Short: 100% Rydex Inverse NDX 2x fund.  Anticipatory Trend program is short 50% Rydex Inverse NDX 2X fund.  All other programs are 100% Money market.  Tuesday  closed with a small gain in the NDX. The early part of the day was down with news of Japan's likely slide into a recession and Apple's not meeting estimates due to the coronavirus. Volatility seems to be slipping, but only a little.  Our signal is split with probabilities and amplitudes leaning  slightly lower overall.  Repercussions from the virus continue to filter through the economic framework of the world.  Weaker demand for oil coming out of China has sent oil prices dropping by 10% in the past month and sending rates for the oil carrying super tankers down by 75% as they compete for the lower demand. The negative economic effect of the virus has accelerated in some areas as the impact moves from one industry to another.  The indices have ignored these problems as the  NDX continues to make new daily highs  and a look at the Shanghai index shows a recovery of more than half of its drop in January. These are positive signs but in the case of the NDX the rally from the start of the year may be overextended as shares of the New York Stock exchange index are up only  0.9% year to date, and shares on the NDX are up 10.3%.  

Comments: February 14, 2020

Current position for Tuesday:    Primary program is Long: 75% Rydex NDX 2x fund.   Long/money market program is  Long: 75% Rydex NDX 2x fund.   Hot Money program is  Long: 100% Rydex NDX 2x fund.   Conservative program is Long: 100% Rydex SPX 1x fund.  SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  The market held up quite well going into the long weekend and my expectations are for a good up-day on Tuesday. Berkshire Hathaway finally cut their stake in Wells Fargo. Wells has had many reoccurring public problems for many years and the stock has been stagnant to lower over the past five years.  Why did it take so long for Berkshire to trim?  If the best of the seasoned and connected stock pickers can get into that kind of mess how can regular players hope to make good choices on individual stocks? 

Comments: February 13, 2020

Current position for Friday: All programs are 100% money market.  Markets backed off a little on Thursday. Our signal is leaning long based on probabilities, but a closer look shows that there is potential of a larger drop as the average amount on down days well exceeded the average amount on up days.  We stayed in the money market.  interesting news regarding malls which have been adversely affected by on-line purchases.  Forever 21 was rescued by its mall creditors.  Mall owners, Simon Property group and Brookfield properties stepped in to get Forever 21 out of bankruptcy.  Mall owners do not normally take equity positions in their retail stores. For the most part rents remain too high for the level of business that is left after the damage from on-line shopping. Landlords don't want to willingly reduce rents until it is too late.  Property values will fall unless new uses can be found for those properties. More changes are coming.

Comments: February 12, 2020

Current position for Thursday: All programs are 100% money market.  It was a strong market day with the NDX closing up 1%.  It looks like investors are believing what China is saying about the virus as new cases outside of the Hubei containment area have fallen for eight days. We missed the up-tick as our programs were in the money market. Internals for Thursday are a bit weaker and our signal remains flat.  The market does not seem to be concerned that Bernie Sanders is now the front runner in the democratic party.  But maybe investors realize that  democratic socialism does not mean the end of capitalism.  It is merely an extension of the social systems that we already have in place.  For example we have a fire department, police department and department of motor vehicles, departments for streets and highways. We have public schools and we have the armed services. All of these are socialist by necessity, they are necessary for the overall public well-being.  If a country goes beyond having a normal size army and raises its budget to form a very large standing army that is more fascist and is no longer socialist in nature.  When capitalism is left to monitor itself it sometimes leads to bad players where, for example, pharmaceutical prices for drugs necessary to extend life are raised to the highest level possible. In most cases there is good and bad in every system of government. What is important is that a longer term point of view is recognized for both survival and the greater good.  You don't save money long term by closing your public schools or charging a toll on every street.  Vote wisely.

Comments: February 11, 2020

Current position for Wednesday: All programs are 100% money market.  We got the pause that I mentioned yesterday in a rather strange way with the NDX gaining about 0.9% before reversing, going negative and then finally closing up 0.01%.  Wednesday is a toss up for us so we moved into the money market. If we do not have a clear indication of the next day's price movement we stay out.  There are mixed messages on the coronavirus word from China is that things are improving while the US media is fraught with concern. We are watching the market's reaction, and with the market closing at new highs the level of fear seems very low.

Comments: February 10, 2020

Current position for Tuesday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 50% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is 100% Rydex Money Market.  SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  A good market day with the NDX gaining over 1% and pushing our SuperAlgo program to new all time highs and a ytd gain of over 9%.  We reduced our exposure in most programs as the probabilities, though still positive, have slipped. The market has moved through an expected top area and now could be expected to pause as some of its internal driving power that it had on Monday is diminished. Volatility is at a good median level. From our T-index I can see that interest rates are telling me we have moved into an inflationary zone where from a historic point of view we should expect to see interest rates fall. (Please note: We corrected our comments for Feb 6 and Feb 7 to reflect our positions as being in the NDX and not the S&P. This was a cut and paste posting error. We had moved back into trading the NDX in 2020 starting with our correct February 3rd comments. I apologize for any confusion.)

Comments: February 7, 2020

Current position for Friday:    Primary program is Long: 75% Rydex NDX 2x fund.   Long/money market program is  Long: 75% Rydex NDX 2x fund.   Hot Money program is  Long: 100% Rydex NDX 2x fund.   Conservative program is Long: 100% Rydex SPX 1x fund.  SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  Job numbers were very good this morning but the markets did not bite and instead the market had a small pull back going into the weekend.  We remain fully long as our signal components moved to a somewhat stronger position.  Volatility remains in the long-term normal area.  The still dangerous coronavirus lurks in the background.  

Comments: February 6, 2020

Current position for Friday:    Primary program is Long: 75% Rydex NDX 2x fund.   Long/money market program is  Long: 75% Rydex NDX 2x fund.   Hot Money program is  Long: 100% Rydex NDX 2x fund.   Conservative program is Long: 100% Rydex SPX 1x fund.  SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  We moved back to fully long. I would be very surprised, if Friday's market had very much left for the upside.  I would also be pleased since we have a fully long position.  The NDX was up four days in a row and some of our components show mixed influences.  This is a Trump rally that has run through its previous high but shows good probabilities for going higher on Friday. 

Comments: February 5, 2020

Current position for Thursday: All programs are 100% money market.  The NDX climbed +1.16% before falling back and ending with a much smaller +0.36% gain. Our signal is mixed and leaving us the Money market as the best choice.  TSLA fell more than -17% after a number of weeks of a spectacular rise and adding to today's pressure on the NDX.  The large deficits continue to fuel the economy for now and probably through the election. 

Comments: February 4, 2020

Current position for Wednesday:    Primary program is Long: 75% Rydex NDX 2x fund.   Long/money market program is  Long: 75% Rydex NDX 2x fund.   Hot Money program is  Long: 100% Rydex NDX 2x fund.   Conservative program is Long: 100% Rydex NDX 1x fund.  SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  The NDX had its first >2% move since August.  Iowa's Democratic caucus delays could have helped, along with anticipation of some great Trump State of the Union set for this evening.  Our signal has moved fully long and we took the appropriate positions.  If investors are impressed the market could surge another 1.5 % before taking a break.  Volatility has moved back to long term normal levels. 

Comments: February 3, 2020

Current position for Tuesday:    Primary program is Long: 37.5% Rydex NDX 2x fund.   Long/money market program is  Long: 50% Rydex NDX 2x fund.   Hot Money program is  Long: 50% Rydex NDX 2x fund.   Conservative program is 100% Rydex Money Market.  SuperAlgo program is Long: 100% Rydex NDX 2X fund. Anticipatory Trend program is Long 60% Rydex NDX 2x fund.  The NDX gained back 95% of Friday's drop while the S&P 500 could only muster 40% of its Friday drop. Tuesday's concerns center on Iowa with an eye on the virus in China.  Amazingly China was able to construct a 1,000 bed hospital for the Coronavirus victims in just 10 days. Volatility has grown to a more reasonable number. 

Comments: January 31, 2020

Current position for Monday: All programs are 100% money market.  Sizeable drop in the markets on Friday.  We have indicators for both a strong down Monday and a strong up Monday.  I expect that it will go higher, but we took the safe way out as detailed probability measurements did not reach the levels of reliability I like to see, especially as this market remains affected by the evolving influence of the coronavirus.  The good news is that the volatility is growing and that makes the market easier to read increasing both the reliability and returns. 

Comments: January 30, 2020

Current position for Friday: All programs are 100% money market.  Today the markets started off badly but ended higher. Our signal for Friday  was "long" until about half hour prior to the close then went back to "money market" which is where we remained. For some reason the NDX futures had a big jump higher after the close, primarily on AMZN's big 10% jump on an earnings beat.  This is earnings season and between that and the coronavirus we are for the most part just holding on to small gains.  Our SuperAlgo returns under similar one month January time periods was +16% in 2018, -10% in 2019, and this year it is in the middle at +2.4%.  We will be back to trading the NDX going forward.  Volatility remains low.  

Comments: January 29, 2020

Current position for Thursday: All programs are 100% money market.  The small early market gains got wiped near the close. After the close TSLA jumped about 11.5% on great earnings crushing the short positions. Our signal is flat for Thursday and it looks like the market could be vulnerable to more selling.  Volatility remains low but not low enough to prevent a market slide. 

Comments: January 28, 2020

Current position for Wednesday:    Primary program is Long: 75% Rydex SPX 2x fund.   Long/money market program is  Long: 75% Rydex SPX 2x fund.   Hot Money program is  Long: 100% Rydex SPX 2x fund.   Conservative program is Long: 100% Rydex SPX 1x fund.  SuperAlgo program is Long: 100% Rydex SPX 2X fund. Anticipatory Trend program is Long 60% Rydex SPX 2x fund.  The market recovered about two thirds of its Monday drop and pushed the coronavirus concerns to the back closet...for now.  What I expect is a number of companies reporting earnings to have poor guidance expectations if they have products that are made in China.  Aside from that, the focus seems back to normal but it will take some more time to be sure. Volatility remains low and I don't see any major drop without an increase in volatility. 

Comments: January 27, 2020

Current position for Tuesday: All programs are 100% money market.  With thousands of hours going in to designing my programs I try very hard not to override them. However there are some gray areas due to outside forces (news) that can put a shock into the markets and take a few days to work its way through the investment psyche. Some of this is taken care of through our reduction in exposure during high volatility times. However, at the present time volatility remains low which in itself is helpful when things go wrong. China's correct but extreme reaction to the coronavirus had a greater effect on investors than I was able to read on Friday. The deaths listed by China do not include deaths due to other problems like pneumonia that are caused by the flu which will greatly increase the numbers presented. When flu deaths are reported in the US the other related deaths are included. Annual deaths due to flu in the US over the last ten years ran from 12,000 to 61,000.  US hospitalizations ran 140,000 to 810,000.  For the near term this flu will impact the markets.  For Tuesday we have an interesting condition. Generally hard down Mondays are followed by up Tuesdays and in low volatility markets, like we currently have, the normal market trend is up anyway.  Still the unknown implications of the virus on a market that may be a bit over stretched to begin with, can lead to more selling.  I chose to step out of the way for a day to let the impact step though and allow the markets to adjust to the new conditions.  We always want to avoid unnecessary risks. 

Comments: January 24, 2020

Current position for Monday:    Primary program is Long: 75% Rydex SPX 2x fund.   Long/money market program is  Long: 75% Rydex SPX 2x fund.   Hot Money program is  Long: 100% Rydex SPX 2x fund.   Conservative program is Long: 100% Rydex SPX 1x fund.  SuperAlgo program is Long: 100% Rydex SPX 2X fund. Anticipatory Trend program is Long 60% Rydex SPX 2x fund.  We did good on our "short" call for Friday as continued coronavirus fears pushed the market lower going into the weekend. Hopefully we will again do well on our reverse call for an up-market on Monday. I do not think that there will be actual good news coming out on the virus over the weekend, but word from China is that relatively younger people are recovering and that about half of the deaths were in people over 80. China is working very hard to contain this problem and was very fast to act.  ..........Last weekend I visited the Westfield Century City mall in Los Angeles. This property of the Australian Westfield corporation was renovated in 2017. I had not been there since then and wanted to see if it was able to survive in this post Amazon economy.  It took me 20 minutes to park due to the number of cars looking for the few open spaces that were left. The mall had many people and all the stores looked up-scale. There were many store names I had never heard of. The up-scale economy is booming, and Westfield really knows how to run a mall.......Often we read that Netflix is in trouble and won't be able to handle the competition. The reality is that it is not a zero sum game. People can afford subscribe to a number of  streaming services and Netflix will be able to raise prices for many years.  Netflix cost for a month is about the same as the price of one movie ticket. .....Also happy to say our SuperAlgo program continues its winning ways and is up 6.0% ytd. 

Comments: January 23, 2020

Current position for Friday:    Primary program is Short: 37.5% Rydex Inverse SPX 2x fund.  Hot Money program is Short: 50% Rydex Inverse SPX 2x fund.   SuperAlgo program is Short: 100% Rydex Inverse SPX 2x fund.  Anticipatory Trend program is short 50% Rydex Inverse SPX 2X fund.  All other programs are 100% Money market.  The market recovered from an early drop that started overnight. The early down side was mostly related to the coronavirus.  If we are correct we should get help later in the day from fear that there might be more negative virus news over the weekend causing investors to lighten holdings near the close.  I expect more cases to be reported outside China since it takes a few weeks after exposure to become deadly.  At this point deaths have mostly been confined to the elderly and those people with already compromised health conditions.  Economically the most obvious impact was the price of oil which fell as travel was curtailed.  

Comments: January 22, 2020

Current position for Thursday:    Primary program is Long: 75% Rydex SPX 2x fund.   Long/money market program is  Long: 75% Rydex SPX 2x fund.   Hot Money program is  Long: 100% Rydex SPX 2x fund.   Conservative program is Long: 100% Rydex SPX 1x fund.  SuperAlgo program is Long: 100% Rydex SPX 2X fund. Anticipatory Trend program is Long 60% Rydex SPX 2x fund.  The market remained compressed with concerns about the China virus and impeachment trial. China reacted swiftly to its coronavirus health problem and quickly suspended all public transportation in the city of Wuhan, where the virus started.  It is a very intelligent longer term view of the problem welcomed by the rest of the world. I hope the USA, now recently constricted with efforts to reduce oversight on environment issues, could and would still be able to do the same.  The stock market did gain and held positive all day on Wednesday showing a positive sentiment. and our signal is strong with probabilities strong for the market to go higher on Thursday.  

Comments: January 21, 2020

Current position for Wednesday:    Primary program is Short: 37.5% Rydex Inverse SPX 2x fund.  Hot Money program is Short: 50% Rydex Inverse SPX 2x fund.   SuperAlgo program is Short: 100% Rydex Inverse SPX 2x fund.  Anticipatory Trend program is short 50% Rydex Inverse SPX 2X fund.  All other programs are 100% Money market.  There was a small drop in the markets on Tuesday which some pundits related to the China virus and others to the Hong Kong credit down grade. I believe it might just be investors taking some recent profits off the table as the impeachment gets underway even as very few expect anything but a stone wall in the Senate.  I don't expect the pull back to last very long.

Comments: January 17, 2020

Current position for Tuesday:    Primary program is Long: 75% Rydex SPX 2x fund.   Long/money market program is  Long: 75% Rydex SPX 2x fund.   Hot Money program is  Long: 100% Rydex SPX 2x fund.   Conservative program is Long: 100% Rydex SPX 1x fund.  SuperAlgo program is Long: 100% Rydex SPX 2X fund. Anticipatory Trend program is Long 60% Rydex SPX 2x fund.  Good week for us especially considering we were cautiously only in the market for two days. The strength of our signal improved for Tuesday, and the market, in the absence of negative news, should continue higher.  We are fully long.  Volatility remains on the low side and the last time the S&P saw a greater than one percent move (in either direction) was in October.  Impeachment should take up most of the news cycle and that should not cause any great concern for the markets. 

Comments: January 16, 2020

Current position for Friday:    Primary program is Long: 37.5% Rydex SPX 2x fund.   Long/money market program is  Long: 50% Rydex SPX 2x fund.   Hot Money program is  Long: 50% Rydex SPX 2x fund.   Conservative program is 100% Rydex Money Market.  SuperAlgo program is Long: 100% Rydex SPX 2X fund. Anticipatory Trend program is Long 60% Rydex SPX 2x fund.  More positive news today, Trump signed the Canada/Mexico trade deal and retail sales in December did well. Hopefully the good news will carry over another day as we moved back into the market  with a partial long position.  Our signal is, however, not particularly strong and Thursday's move could have taken most of the upside energy out of this rather slow moving market. 

Comments: January 15, 2020

Current position for Thursday: All programs are 100% money market.  Trump signed phase one of the trade agreement with China. The markets did not react except that the yields on both 90 day t-bills and 10 year government bonds fell. Our indicators are mixed and neutral while we remain in the money market as the market goes flat. 

Comments: January 14, 2020

Current position for Wednesday: All programs are 100% money market.  Sentiment is now flat.  We remain in the money market as volatility slowly builds. Looking at expected amplitudes we see that the size of an average down move for Wednesday is expected to be about twice an average up move although the chance of going one way or another is roughly the same. Best to stay out until we have a more one-sided signal. 

Comments: January 13, 2020

Current position for Tuesday: All programs are 100% money market.  Monday was a good market day, but sentiment leans to the down side for Tuesday.  We moved to the money market  rather than the short side, as volatility is low and not enough indicators are supportive of the down move.  PE ratios for the NDX and S&P are at very high levels but current low interest rates should be able to support these multiples.  

Comments: January 10, 2020

Current position for Monday:    Primary program is Long: 75% Rydex SPX 2x fund.   Long/money market program is  Long: 75% Rydex SPX 2x fund.   Hot Money program is  Long: 100% Rydex SPX 2x fund.   Conservative program is Long: 100% Rydex SPX 1x fund.  SuperAlgo program is Long: 100% Rydex SPX 2X fund. Anticipatory Trend program is Long 60% Rydex SPX 2x fund.  Good week, small pull back on Friday going into the weekend with Iran still a worry.  We are holding our long position. Volatility remains low and we do not see any obvious problems.  Jobs numbers did not scare and were in line with expectations.  Market is expected to continue its slow climb.  On a side note since we avoid individual stocks, TD Ameritrade (AMTD) has shown strong earnings which more than doubled over the last two years, but there is something wrong.  I had two reports of hour long waits on the phone for customer service. There is recent insider selling over the past month, and the stock remains down about 20% from a high 18 months ago. AMTD closed at 50 on Friday. 

Comments: January 9, 2020

Current position for Friday:    Primary program is Long: 75% Rydex SPX 2x fund.   Long/money market program is  Long: 75% Rydex SPX 2x fund.   Hot Money program is  Long: 100% Rydex SPX 2x fund.   Conservative program is Long: 100% Rydex SPX 1x fund.  SuperAlgo program is Long: 100% Rydex SPX 2X fund. Anticipatory Trend program is Long 60% Rydex SPX 2x fund.  We are holding our leveraged "long" position into Friday. These small daily changes are helping the market to continue higher without inducing too much worry.  Where "too much" would be the level at which investors start to cash out. Iran seems to be off the table for now, so we should be able to make it all the way to the end of the week on the plus side. 

Comments: January 8, 2020

Current position for Thursday:    Primary program is Long: 75% Rydex SPX 2x fund.   Long/money market program is  Long: 75% Rydex SPX 2x fund.   Hot Money program is  Long: 100% Rydex SPX 2x fund.   Conservative program is Long: 100% Rydex SPX 1x fund.  SuperAlgo program is Long: 100% Rydex SPX 2X fund. Anticipatory Trend program is Long 60% Rydex SPX 2x fund.  Every conclusion is attached to a probability so I could always be wrong, but bear with me, you will have to follow me closely on this one with a very open mind.  Consider these items. (1) Whenever we work on a problem whether the problem involves other people or just ourselves we bring all of our past education, conditioning and past methods into it. What techniques have worked in the past? What are we most comfortable with?  Nothing is really solved outside ourselves.  (2)  On larger problems there is rarely a single goal involved, and almost always different consequences to our actions. So we are working in a gray area. With the markets we have probabilities. Do this and there is an expected chance of A and B. Do something else and we may get B and C. (3) When looking at something that has happened we must first ask. Did that make sense and how does it make sense.  (4.) In the current times and in general "trade", rather than "war", is considered to be the better way to interact with other countries. Business makes countries more prosperous and that allows for more taxes. Therefore countries act tough as a show for their own population and to remain in power, but quietly "negotiate with the enemy" and act to prevent a war that could hurt trade or cause great damage. Sometimes there are lesser rogue players that can cause damage by either not  understanding how things are done or through there own quest for personal power. 

Taking 1,2,3 and 4 together lets look at what happened recently regarding the Middle East, when it happened and why did it happen. Taking what we know and what we suspect. 

Former national security advisor John Bolton, considered a hawk, was removed from his position. 

Prior to market opening on December 31, US embassy in Iraq is attacked. 

Iranian general Soleimani is assassinated. (Announced soon after the stock market closed for the day on Thursday January 2)

Monday January 6th, Report of US troups leaving Iraq sent market higher (later retracted by administration)

Tuesday (after the market closed) Iran sent 15 missiles to bomb the US airbase in Iraq. Later reported no casualties and Trump indicated that it was all over. 

........................................................................................................................................

What we have is a carefully orchestrated reality show. The US trouble maker (JB) is removed opening up an easier way to negotiate foreign affairs for Trump. Most likely the US, Iran and Russia decided that Soleimani was getting too powerful and agreed to the kill. Iran's 15  missile, nobody gets hurt retaliation, was bravado for local consumption. Trump gets a kill for his loyal followers and sends up smoke to cover the impeachment hearing at the same time. It avoids all impact during stock market hours so that there is no build up of worry, allowing the market to go higher. This was skillfully done. Donald used his full set of tools he learned over the years and put it together very well. 

From here it looks like the stock market is back to its normal behavior, fear never took hold, and although I do not expect to see much in the way of strong earnings there seems to be a plan in place for the market to climb slowly upward.  For the first time in about a month we moved our accounts to a fully long position. 

Comments: January 7, 2020

Current position for Wednesday: All programs are 100% money market.  Yesterday's report of a troop pullout from Iraq that pushed the markets higher near the close was said to have been an error. This sent the markets a little lower on Tuesday.  For the second time our signal was unsteady near the close making our probabilities less reliable, but this time we had moved into the money market.  Unless there is more negative news I expect to see a neutral to higher market on Wednesday. Volatility remains low but can easily jump on any sign of terrorism.  Perhaps this is the proverbial "calm before the storm".

Comments: January 6, 2020

Current position for Tuesday:    Primary program is Short: 37.5% Rydex Inverse SPX 2x fund.  Hot Money program is Short: 50% Rydex Inverse SPX 2x fund.   SuperAlgo program is Short: 100% Rydex Inverse SPX 2x fund.  Anticipatory Trend program is short 50% Rydex Inverse SPX 2X fund.  All other programs are 100% Money market.  Our signal was short all day until the news reported that the military was pulling out of Iraq. This was a de-escalation of the Iran confrontation and it sent the markets higher near the close changing our signal from "short" to "long", but arriving too late to change our position. Probabilities are now favoring some more upside but late changes are less reliable than more stable positions and our forecast is neutral.

Comments: January 3, 2020

Current position for Monday:    Primary program is Long: 37.5% Rydex SPX 2x fund.   Long/money market program is  Long: 50% Rydex SPX 2x fund.   Hot Money program is  Long: 50% Rydex SPX 2x fund.   Conservative program is 100% Rydex Money Market.  SuperAlgo program is Long: 100% Rydex SPX 2X fund. Anticipatory Trend program is Long 60% Rydex SPX 2x fund.  Whether you consider it a smart move or dumb move Donald Trump's effective assassination of Iranian General Soleimani has taken the focus off the impeachment proceedings.  The effect on the markets will most likely be to increase volatility.  The effect on the economy will be negative, more  people will avoid public places like restaurants and arenas, thereby reducing consumption, and the increased costs for security, (like after 911) must be considered a tax on the economy.  More people will die.  Barriers and fences do not have the same economic return as roads and bridges. The immediate effect on the markets was minimal on Friday, especially considering that the ISM manufacturing index was also reported this morning and reached its lowest point since 2009 as the tariffs continue to damage the economy.  I do not anticipate any major change in market behavior for the short term and we are holding our position going into Monday. 

Comments: January 2, 2020

Current position for Friday:    Primary program is Long: 37.5% Rydex SPX 2x fund.   Long/money market program is  Long: 50% Rydex SPX 2x fund.   Hot Money program is  Long: 50% Rydex SPX 2x fund.   Conservative program is 100% Rydex Money Market.  SuperAlgo program is Long: 100% Rydex SPX 2X fund. Anticipatory Trend program is Long 60% Rydex SPX 2x fund.  We saw an improvement in volatility on Thursday, the first trading day of 2020.  It is nice to start the year off with a gain but we see some mixed money flow next week and that could mean a pause or pull back. Our programs will be updated by Monday to reflect some improvements, especially with regards to our more conservative programs who have not been taking full advantage of some relatively low risk conditions that we uncovered while eliminating some higher risk transactions. With that in mind we expect to have another very good year in 2020, although we never know what new risks we might encounter. The stock market itself should also do well, at least early on, as this administration appears to know how to keep the market positive and will do everything they can to support it during the election year. 

For earlier comments made in 2019

For earlier comments made in 2 nd half of 2018

For earlier comments made in 1 st half of 2018

For earlier comments made in 2017    

For earlier comments made in 2016 

For earlier comments made in 2015 

For earlier comments made in 2014 

For earlier comments made in 2013