Tag Archives: market lab report

Market Lab Report – Premarket Pulse 9/2/15

Major averages got slammed on higher, above average volume yesterday with the Dow down nearly 500 points and major averages in general down around 3%. As we have said, expect elevated levels of volatility. The volatility model went to a sell signal shortly after the open on August 31. Thus when volatility instruments were up sharply yesterday such as VIXY +14.2% and TVIX +31.19%, there is nothing wrong with taking some profits. For now, the model remains on a sell signal, but this can change on a dime. Also, as we have said, be sure you understand the inherent risks in whichever volatility instrument(s) you trade. This will then allow you to intelligently position size, place sell stops if you feel the need, and possibly pyramid if such actions do not exceed your risk tolerance levels. Futures are up just over 1% at the time of this writing as markets attempt to bounce after yesterday’s thrashing. That said, concerns about the slowdown in China are ever-present, though one analyst wrote “The saving grace could be the two-day Chinese holiday that begins on Thursday, which in theory should provide a moment of respite for volatility-weary investors.” On the other hand, investors may want to exit positions ahead of the long weekend due to lingering uncertainties in the global economy, and such actions may push markets lower.

Market Lab Report – Premarket Pulse 9/1/15

Major averages fell on mixed volume with the S&P 500 falling less due to the jump in energy stocks. Light sweet crude oil was up over 15% in yesterday’s trade. Much of Mondayâs gains came after reports that OPEC may consider cutting output to boost oil prices, and on signs of a decline in US oil production. Futures are currently down more than 2% at the time of this writing as China’s official manufacturing purchasing managersâ index fell to a three-year low, further fueling fears of an economic slowdown in China.

Market Lab Report – Premarket Pulse 8/31/15

Major averages finished roughly flat to slightly up on Friday on lower volume. Expect elevated levels of volatility to continue for the time being as such levels are typical following a short, sharp correction. Most formerly leading/leading stocks have done little more than rally back up into the “underbellies” of their chart patterns, with many names pushing right into potential overhead resistance. Whether they are able to move higher over time remains to be seen, but for now the odds favor at least some sort of retest of last week’s lows. Core inflation fell in July giving the Federal Reserve another reason to delay hiking rates when they meet in September. The Fed was leaning toward a rate hike in September until China’s currency devaluation according to Federal Reserve Vice Chairman Stanley Fischer. Fischer was upbeat about the economy and said he was confident that inflation would return to 2% in the medium term. As we wrote to our members on 8/27/15: Some analysts including Ray Dalio who is the CEO of Bridgewater think that the Fed is lining up for another round of QE, or QE4. With global central banks in full throttle money printing mode, and with the global economy nearing recession, central banks have less and less room to manipulate markets higher, thus should the Fed eventually paint itself into a corner, a loss of confidence in the Fed could spark a far more serious correction down the road. But making predictions of if and when such a crash would occur is futile. As always, with all the market crash talk that has been asked of us these days, we examine markets in real-time, day to day, so that gives us enough to know what to do on the long and/or short side. Keep in mind that no one has ever demonstrated with any consistent reliability the ability to predict the timing or depth of market crashes. The future doesnt exist. At www.virtueofselfishinvesting.com, all we need to know is the now.