Fridays market meltdown and "Word of Advice" from OptionGuru
- Thread starter OptionGuru
- Start date
My blackbox has 1990.5-1998 ES as a swing long signal
1880's would be downside target on failure of 1975
Technical analysis is just another way of reading market sentiment i.e risk off/on. It does not lead the market but it gives you clues on roughly where the market is headed.
If an investor utilizes an empirically derived, systematically based, risk managed process with a diversification over different asset classes, then news driven, geopolitical events won't affect the long term results ( historically). For example, investing in a blend of small cap value and emerging small cap from Nov 1 to Apr 30 and then switching to utilities sector or cash equivalents ( depending on "high risk" signaling and allocation instruction from risk profile variable * ) from May 1 to Oct 31 of each year, forward 5 year total returns periods after 10 major geopolitical events over the last 50 years have produced: > 100% in 7 periods and 50% - 100% in 2 periods with no losing periods.
As only a handful of geopolitical events have led to major market corrections, a more compelling test of an investment process' returns involves a review of 5 year total returns after market peaks and then subsequent market corrections of > 5%. Since 1954, forward 5 year total returns periods for the small cap value / emerging small / utilities / cash process after the "peaks" have produced > 100% in 11 of 24 occurrences, between 50% and 100% 5 year total return periods in 8 out of 24, with no losing periods.
* main quantitative price based variable # 2 here http://tinyurl.com/z9xddr5
Strategy 5 year rolling total returns 1954 - 2015
1958 85.7%
1959 91.4%
1960 53.9%
1961 135.6%
1962 180.2%
1963 172.5%
1964 196.5%
1965 224.7%
1966 118.0%
1967 137.3%
1968 153.1%
1969 94.8%
1970 39.4%
1971 41.1%
1972 95.5%
1973 20.9%
1974 7.0%
1975 126.2%
1976 193.7%
1977 152.1%
1978 270.3%
1979 370.0%
1980 209.9%
1981 125.9%
1982 84.1%
1983 133.2%
1984 163.1%
1985 195.6%
1986 316.6%
1987 392.2%
1988 358.1%
1989 422.7%
1990 350.9%
1991 300.0%
1992 326.9%
1993 285.7%
1994 186.0%
1995 186.4%
1996 141.1%
1997 132.2%
1998 104.5%
1999 157.0%
2000 156.4%
2001 119.4%
2002 137.1%
2003 164.1%
2004 151.1%
2005 168.4%
2006 293.8%
2007 251.1%
2008 145.0%
2009 127.9%
2010 176.0%
2011 106.2%
2012 92.8%
2013 147.9%
2014 125.6%
2015 72.3%
Start of S&P500 corrections > 5% subsequent 5 year total returns
Strategy
03/1956 101%
07/1957 55%
12/1959 58.3%
12/1961 64.7%
04/1965 87.0%
01/1966 88.1%
12/1967 80.9%
11/1968 5.1%
04/1971 64.1%
12/1972 72.1%
12/1976 219.6%
09/1979 117.2%
11/1980 157.0%
11/1983 226.0%
08/1986 167.9%
08/1987 126.1%
12/1989 133.8%
05/1990 331.4%
01/1994 32.9%
07/1997 20.7%
06/1998 37.2%
06/1999 126.5%
08/2000 112.9%
10/2007 12.7%
03/2012 18.80%
- Don't quit your day job
- Don't use leverage
- Open a Roth IRA
- Sometimes money is made by sitting in cash
- Don't be a hostage to the markets
- let the markets, profitability of the U.S. / World economies work for you
As only a handful of geopolitical events have led to major market corrections, a more compelling test of an investment process' returns involves a review of 5 year total returns after market peaks and then subsequent market corrections of > 5%. Since 1954, forward 5 year total returns periods for the small cap value / emerging small / utilities / cash process after the "peaks" have produced > 100% in 11 of 24 occurrences, between 50% and 100% 5 year total return periods in 8 out of 24, with no losing periods.
* main quantitative price based variable # 2 here http://tinyurl.com/z9xddr5
Strategy 5 year rolling total returns 1954 - 2015
1958 85.7%
1959 91.4%
1960 53.9%
1961 135.6%
1962 180.2%
1963 172.5%
1964 196.5%
1965 224.7%
1966 118.0%
1967 137.3%
1968 153.1%
1969 94.8%
1970 39.4%
1971 41.1%
1972 95.5%
1973 20.9%
1974 7.0%
1975 126.2%
1976 193.7%
1977 152.1%
1978 270.3%
1979 370.0%
1980 209.9%
1981 125.9%
1982 84.1%
1983 133.2%
1984 163.1%
1985 195.6%
1986 316.6%
1987 392.2%
1988 358.1%
1989 422.7%
1990 350.9%
1991 300.0%
1992 326.9%
1993 285.7%
1994 186.0%
1995 186.4%
1996 141.1%
1997 132.2%
1998 104.5%
1999 157.0%
2000 156.4%
2001 119.4%
2002 137.1%
2003 164.1%
2004 151.1%
2005 168.4%
2006 293.8%
2007 251.1%
2008 145.0%
2009 127.9%
2010 176.0%
2011 106.2%
2012 92.8%
2013 147.9%
2014 125.6%
2015 72.3%
Start of S&P500 corrections > 5% subsequent 5 year total returns
Strategy
03/1956 101%
07/1957 55%
12/1959 58.3%
12/1961 64.7%
04/1965 87.0%
01/1966 88.1%
12/1967 80.9%
11/1968 5.1%
04/1971 64.1%
12/1972 72.1%
12/1976 219.6%
09/1979 117.2%
11/1980 157.0%
11/1983 226.0%
08/1986 167.9%
08/1987 126.1%
12/1989 133.8%
05/1990 331.4%
01/1994 32.9%
07/1997 20.7%
06/1998 37.2%
06/1999 126.5%
08/2000 112.9%
10/2007 12.7%
03/2012 18.80%
- Don't quit your day job
- Don't use leverage
- Open a Roth IRA
- Sometimes money is made by sitting in cash
- Don't be a hostage to the markets
- let the markets, profitability of the U.S. / World economies work for you
Just buy....everyone thought stocks were cheap at 18000 so they have to be cheaper now that the Dow is close to 17000....just buy now....
Don't wait...market should jump 5% by Friday
it does not lead the market but gives clue where the market is headed? Isn't that both one and the same? You mean it gives some sort of confirmation of price action continuation?