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August 30, 2015

The U.S. Stock Market: Risk Off

Preview from my weekly report*

Stock price indexes were extremely volatile again last week. Most indexes broke down below their lows of this year on Monday and Tuesday before rebounding on Wednesday and Thursday. Substantial technical damage has been done, and with the global markets unsettled by economic and political uncertainties around the world, extreme volatility may continue for weeks ahead. Traders and investors both may use price rallies to further reduce risk exposure.

Long term, bullish momentum has broken down. The Dow Theory indicates that the main trend is down, and nearly all of the other indicators have confirmed the major bearish trend.

Utilities SPDR, XLU, was the only sector ETF to hold above its 2015 low. Utilities offer less volatility and relative safety compared to most common stocks.

The other Defensive stock sectors have fallen below 2015 lows but still have outperformed Cyclical sectors most of this year, indicating a big move away from risk and toward relative safety. Consumer Discretionary and Health Care briefly broke below 2015 lows last week but rebounded sharply to close higher for the week, thereby showing resilience.

Financials and Consumer Staples both closed below 50- and 200-day SMAs for the second consecutive week--this for the first time in 2015, a sign of developing weakness.

The Cyclical sectors remain bearish and should be sold. Energy, Materials, Industrials, and Technology sectors are systematically bearish: below both 50- and 200-day SMAs, and with the 50-day SMA below the 200-day SMA.

Emerging market stocks and BRICs, commodities, and commodity-related stocks remain vulnerable to further weakness and should continue to be sold or avoided.

U.S. Treasury bond prices suffered sharp price pullbacks last week but may soon rebound if the move away from risk and toward safety continues, as we expect it will.

Click here for my report

Now is the time to take action. Preserve your capital by placing your assets under our careful management--before the next major bear market of -20% to -50% devastates most portfolios.

Make no mistake, the ongoing global economic and financial crisis has not been fixed by any sound or lasting solution. History shows that the authorities will not protect you or give you any advance warning--but we will.

If you agree that making money while staying safe is better than taking big risks in the stock market and exposing your nest egg to potentially ruinous losses, we would be very happy to implement our time-tested strategies for all of your assets. It makes good sense to choose protection--especially at this time when the financial world is stretched out of proportion.

We are always happy to discuss your goals and concerns and answer all your questions.
Call us now for a free consultation.
Please contact
Bill Anderson
by phone: 646-652-6879
or by email: anderson@colbyassetmanagement.com

Robert W. Colby Can Manage Your Account

*For extensive coverage of major global markets with illustrative charts, take a free trial for my weekly report --
click here.


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11-Year Outperformance by the
Top 10 Exchange Traded Funds

Weekly Rankings of Major Trend Relative Strength

My weekly Top 10 ETFs ranked by the Major Trend Relative Strength outperformed the S&P 500 by over an 11-year period of real-time weekly tests. Click here for a graph of simulated performance.

Please note that my ETF rankings are available by subscription--NOW WITH A NO-RISK FREE TRIAL.
See The Colby Global Markets Report (click here).

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My latest book was named one of the top investment books by Stock Trader's Almanac 2005. This book also received an excellent review in the November 2003 issue of Futures.
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My ETF Rankings are not investment advice. Rather, they are an objective ongoing research study.

Analysis of market forces may offer a sense of probabilities. But the many variables that can impact market prices are notoriously difficult to predict. And, market analysis is something less than an exact science. So, sound trading tactics are always recommended. See my
Money Management Rules.

According to CFTC Rule 4.41, hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.

Trading and investing involve risk of significant loss. Your use of this site means that you have read, understood, and accepted my
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, Second Edition, 2003.

Dow Theory Analysis

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Ranking Indicator Performance by the "Profit/Loss Index".

Robert W. Colby, CMT,
is a consultant to institutional and private investors and traders, providing regular analytical reports, custom research services, and trading systems tailored to clients' objectives. Clients include the most successful traders and investors in the world. Robert is the author of The Encyclopedia of Technical Market Indicators, Second Edition, McGraw-Hill, 2003, which has become the standard reference for indicator and trading systems design. Previously, at several large Wall Street firms, Robert worked as a proprietary trader, technical analyst, and fundamental analyst. He also was adjunct professor at New York University and New York Institute of Finance, where he developed new courses on technical analysis and market timing.

Robert W. Colby is a Chartered Market Technician (CMT), an accreditation granted to members by the Market Technicians Association (www.mta.org) after demonstrating professional competence and ethics over a period of many years. Robert has been a member of the MTA since 1980, and he strongly supports the MTA's high standards. He also supports the MTA Educational Foundation (www.mtaef.org), which works to have technical analysis included in the curriculum of major business schools. Please click the following banner for information about the Market Technicians Association. The Market Technicians Association (MTA) is the national organization of investment analysts, stock market analysis professionals, and certified market technicians in the United States.

 
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Ranking ETFs
"Robert Colby has evolved a system that, while hardly foolproof, is pretty clever," wrote Daniel Fisher, "Surfin' ETFs", Forbes, Investment Guide, Special Issue, June 4, 2007.
Please click here to view this article
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INTERVIEW of Robert W. Colby in Technical Analysis of STOCKS & COMMODITIES magazine, December 2006 issue.
Please click here to view this article
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"Gold's next move: History, logic, and intermarket relationships. See if testing gold's relationship to different markets over a 32-year period provides possible trade signals for the yellow metal."
by Robert W. Colby, CMT.
Please click here to view this article
.
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"Which gold indicators are best? Divining gold's next move."
by Robert W. Colby, CMT.
Please click here to view this free article
.
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"Applying the Relative Strength strategy to ETFs."
by Robert W. Colby, CMT.
Please click here to view this free article.
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"PUTTING CANDLES TO THE TEST, How Profitable Are They Really?" by Robert W. Colby, CMT. Published in SFO, STOCKS, FUTURES AND OPTIONS MAGAZINE, Volume 5. No. 8. August 2006, pages 91-94. Please click here to buy this article. (Scroll to bottom of linked page.)
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TradingMarkets.com interviewed
Robert W. Colby, CMT.
View the entire interview online
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Active Trader magazine September 2004 interviewed Robert W. Colby. 4 pages. "Robert W. Colby: Technical collector. A discussion with Robert W. Colby about technical trading and his revised Encyclopedia of Technical Market Indicators, Second Edition. By Active Trader Staff."
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For information about
methods that would have performed substantially better than systematic trend-following in back-testing simulation dating back 32 years, email me by clicking on the following link:
Please click here to contact Colby directly.

Click here for a simulated performance graph of one of my trading systems applied to a stock price index.
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MetaStock® PC Software for Technical Analysis
MetaStock® is a powerful technical analysis software program for your personal computer. It offers more than 200 built-in indicators and line studies to enable you to explore a wide variety of methods. And it empowers you to build, back test, and optimize custom trading systems to suit your own particular requirements.

Click this link to save 7%-9% on MetaStock® software
.
Or, click the banner below for a one-month free trial.

MetaStock Software