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Saturday, January 18, 2014

Top-Less 2013

As John Hussman brilliantly put it (here):
...2013 was a bad risk that happened to work out well, not unlike the gains earned near the end of a Ponzi scheme.
SPX 2013
No, it was not an easy trend to ride. As I noted before, the only way to be long in 2013 was to disregard stop loss (be it a break of previous low, 50 day MA, sentiment, Elliott Wave, internal divergences etc), non withstanding real deteriorating economic conditions (based on my observations), and stupidity and ignorance of our elected leaders and their cronies.

My biggest losses of 2013 came from trying to short the market indexes. So much so, that summer short/hedge wiped out all early-year gains. Back end, and especially October - December period, put me back in black. Important to note that I was shorting the indexes, while being long individual stocks and sectors (via ETF's). I also traded a lot of commodities, both long and short, with mixed results. Grain longs cost me some, softs where about break even, silver short was a big winner early in a year, oil worked very well both ways.

This infatuation with S&P 500 index is rather a drawback to my approach. I continue to come up with different ways to better trade SPX via Systems 10 (discontinued), System 11, and major adjustment to System 1 (too late to implement in this cycle). This research takes a lot of time, detrimental to my P&L, and pulls resources (and gains) from System 9. As I Spring to Action, I will be looking for more balance, will be able to expand Theme Investing - all with goal to reduce dependance on intermediate term forecasting of index trends.

As we enter year 2014 warning signals abound. Here are some
SKEW sell signal
Only 4th time in history of SKEW since 1990, it gives 'Above 140' sell signal.
Previous times:
  • 06/21/1990 - S&L Crisis (Stocks dropped 18% in next 3 months and the US entered recession)
  • 10/16/1998 - Russian Default and LTCM (Stocks soared 22% in the next 3 months and the dot-com bubble was born)
  • 03/16/2006 - Housing Bubble peak (Stock dropped 6% in next 3 months and the 'great recession' started within a year)

II most bullish sentiment on record (since 1990's). Implication being - if everybody bullish, who is left to buy? BTFATH...
This, Sornette log bubble and 1929 analog here:

I take this guy very seriously, as his investment time frame is equal-to-little-longer then mine, and he is usually right on a money. His message - be careful

Various cycle works project turbulence ahead in 2014


Then, there is  John Hampson of  http://solarcycles.net/, who does very detailed analysis of sun/moon cycles and their effect on markets and mass physiology. Although it is still considered unorthodox approach by many, I am all over it. Having observed Sun, geomagnetic activity and Moon phases in real time and their effect on my co-workers, friends and family, and market, I think its safe to extrapolate results onto Northern Hemisphere population as a whole.

I've been watching this unfold for about a year, wrote about high Solar activity here in May 2013.
As for Moon Phases - its no joke:

Specifically, we are going right thru Solar Cycle Maximum, as Sun's poles flipped couple of weeks ago.
The following quote is from here
Historically, solar maxima have correlated with earthquakes and peaks in temperature oscillation. They have also correlated with protest/war/revolution, inflation oscillation peaks and speculative parabolic peaks (often secular bull peaks). With both magnetic poles now having flipped for SC24 maximum...the solar max then gives way to economic recession...
Important to note, that although three prior Solar Cycle peaks where followed by economic recession, they didn't start right away, and where not necessary accompanied by catastrophic bear market everywhere, but correlation is undeniable. Causation? I got your hard data right here, mothafucka:

David Collum - 2013 Year in Review

He comes in at 5min and again at 15min. He said everything I do, or is it the other way around? Also, all this has been wrong for at-least a year, and would not help to make money. Quite the opposite. Still...

Of course, Aden sisters and Louise Yamada are bullish as shit. Have they ever been right about anything? Shills...

One my favorite 'Characters', Marc Faber :
"We are in a gigantic financial asset bubble,"  "everybody's bullish", "...this could burst any day. I think we are very stretched." bitcoin and more. He's been saying all this for a while, it doesn't make him wrong, just early


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