ausnahmsweise gibt es auf NLT heute einen Englischen Beitrag:
I want to start by summing up the character the market has been in and how I think traders should adopt to the current environment:
- a lot of markets are choppy, their moves come pre or post market and this is a reason why continous focus on markets with futurestrading ist neccessary to outperform in mid or short term trading as well as trading different markets is important to diversify risks and catch important moves in the market.
- equity markets tend to make many gaps and fade directions, which makes it hard for buy and hold investors
- Europe is still in major problems and driving the markets more than ever. US markets used to lead the market, however since the Greek storm started markets are driven by European news headlines.
- With less trading opportunities patience is key. Investors have to cut down on trades and only execute when they really see a good opportunity. Buying dips instead of buying breakout moves has been favourable.
Short term traders do not compare themselves to benchmarks as such because short-term traders are all about consistency and finding markets where the can exploit inefficiencies. There are always ways to make money in markets through spreads, arbitrage, momentum, scalping, investing, trendfollowing ect. The stronger the trends are , the easier to make money. What matters is volatility.
The market has come up strongly since the 2008 and we are seing a significant volume divergence now, which leads to lots of choppiness for short term traders. The volume is drying up and a few emerging markets like India are moving sideways for months.
Secular bear market:
The current market entered a long term secular bear market in 2000. As history shows us, this is likely to last at least ten to fifteen years. As demonstrated above, during secular bear markets, the market trades in vicious cyclical bull and bear markets. Therefore, the strategy to use instead of buy and hold is to sell assets more quickly should the market turn against you. Pull backs or cyclical bear markets will present opportunities to take new positions once they have run their course. We have seen this quite often in the last 3 years and strong oversold indicators like a MC Cellan can do wonders for market timing signals. It is also important to find value situations and play the hot sectors. During secular bear markets you need to be defensive in any positions. Trading and investing is much easier in secular bull markets, and much more difficult during secular bear markets.
If you look at this chart you see that we are getting close to an historical extreme: After the strong move to the upside profit taking would be likely in the next 1 year. Overbought indicators on the monthly chart also give very strong overbought readings.
The S&P 500 in the macro range, testing ist 2007 highs with a volume divergence and likely to stay in the secular bear market cycle it has been in since 2000. Should the market break above the range and hold till autum 2013 there will more strategic buying opportunities so investors do not miss marco moves.
The next chart shows the average % move for stock market rallies in the last 100 year and where we are trading currently:
Except for the secular bull market of 1921 – 1929, secular market cycles last on average 16 to 20 years:
- Secular Bull Market, 1982 – 2000, (18 years)
- Secular Bear Market, 1966 – 1982, (16 years)
- Secular Bull Market, 1949 – 1966, (17 years)
- Secular Bear Market, 1929 – 1949, (20 years)
- Secular Bull Market, 1921 – 1929, (8 years)
- Secular Bear Market, 1905 – 1921, (16 years)
-Secular Bull Market, 1982 – 2000 (18 years)
The data suggests that a correction or consolidation within the next 12 months is very likely. Now the question is when will that happen?
I have three theories to use for the timing oft a markettop or consolidation that I think will provide good timing for this year:
- Looking at a change of trend in the market breath statistics of US equities. Currently the breath shows a mid term sell signal, not yet a confirmed long term sell signal.
- We have a reversal pattern on the S&P500 on the daily chart, like a head and shoulders pattern.
- Sell in may and go away effect: It is scientifically proven that selling markets in May and buying them in Oktober outperforms the benchmark indices in over 37 countries worldwide. Selling into those months will likely make sense this year combined with the two other indicators.