|technical analysis, trading systems, investing, market-timing methods, stock market, money management
Technical Market Indicators
Dow Theory, W.D. Gann, MetaStock, system tester, indicator builder, custom formulas, momentum, overbought, oversold, buy, sell, signals, top, bottom, Bull, Bear, consolidation, sentiment, contrary opinion
October 11, 2021
Preview from my weekly report*
Our asset management clients have made significantly positive relative returns while taking much less risk. We offer complete transparency, anytime access to your funds, and low fees. You keep control over your money. See: ColbyAssetManagement.com
Stock Market Outlook: kicking the can down the road does not solve the problem
The S&P 500 rose 3 of 5 trading days last week following news that U.S. Senate leaders said they reached an agreement to kick the can down the road by temporarily raising the government borrowing limit into early December--although what happens then promises to be interesting.
Meanwhile, the exact same list of worries remains unresolved:
domestic manufacturing sold off to China,
broken supply chains causing shortages,
the impending default of the China Evergrande Group,
diminishing prospects for economic and profit growth going forward,
the prospect of rising tax rates to partly offset multi-trillion dollar deficit spending,
rapidly rising debt levels,
excessive money printing of fiat currency backed by nothing,
rising interest rates,
tapering of the Fed's $120 billion a month bond buying program,
politics, US debt ceiling fight postponed until early December, social justice, inequality, climate change, energy crisis, green new deal, etc.
weak seasonal tendencies, and
sky-high stock valuations.
Technical market indicators have given early warning of a stock price downturn as they diverged bearishly relative to the S&P 500 for many months and, thereby, gave clear signs of diminished price momentum and diminished bullish power for the broader market.
Unprecedented stimulating monetary and fiscal policies globally have been encouraging inflation and speculation more than real economic growth. Consequently, stocks are overpriced, discounting an extremely optimistic future while ignoring the growing list of risks.
"There is nothing wrong with being entirely in cash at the moment. Being in cash during market corrections preserves your capital, but also your psychological capital." -- investors.com 10/2/21
Our full report reviews indicators that we monitor every day and offers clear and unbiased guidance on the following each week:
Global stock markets
The Defensive stock sectors
The Health Care sector
The Cyclical sectors
The Technology sector
The Financials sector
U.S. bonds and notes
Commodities (Oil, Metals, Agriculture)
Objective Quantitative Rankings for hundreds of Exchange Traded Funds
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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.
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See The Colby Global Markets Report (click here).
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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.
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