Seeking Alpha

Greedometer

View as an RSS Feed
Latest  |  Highest rated
  • Welcome To The Top Of The Market, Again [View article]
    Thanks for the comment. I've found that the ratio of shares sold/bought by insiders (over a 3wk and 4wk avg --across all companies on all US exchanges) tends to produce a useful leading indicator of trouble ahead. Combined with other data points, it creates a less-buggy, smoothed-out leading indicator. The proof's in the pudding.
    Mar 2 10:06 AM | Likes Like |Link to Comment
  • Welcome To The Top Of The Market, Again [View article]
    The ratio of shares sold/bought by insiders for a given week (using a 4-wk moving avg, based on data across all US exchanges)
    Mar 2 10:03 AM | Likes Like |Link to Comment
  • Welcome To The Top Of The Market, Again [View article]
    Actually my client letter -the section that clients see- has specific instructions about intended near term buys and sells. For example, last week I indicated I'd sell the SDS (inverse S&P500) position into a small stock market sell-off that would likely show up in the coming weeks. I also indicated when I plan to buy a larger SDS position back again.

    I also recently mentioned -publicly- 1-2 weeks ago -- that it would be a good idea to consider buying some US Tnotes over the course of the next 1-2 months. There you go.

    I grant that is not good for business to have a dire view of the stock market. But I am not compelled to ignore reality -even if that is inconvenient. I am compelled to try to make positive returns no matter what the stock market does.

    It is my intent to post some green numbers while stock markets melt down again -- as opposed to shrugging my shoulders and saying - nobody saw this coming. To be fair, even with the 2 risk gauges I have, it is not at all easy to post green numbers all the time. I've not been able to do it because markets move faster than the 2 gauges I've got. Perhaps at some point I'll have a third gauge that is faster moving still.

    Good luck.
    Feb 27 05:59 PM | Likes Like |Link to Comment
  • Welcome To The Top Of The Market, Again [View article]
    Wow! 70%. That's amazing. I'm not willing to take the sort of risks that could lead to that kind of return over a short period. My hat is off to you. regards
    Feb 27 05:50 PM | 1 Like Like |Link to Comment
  • Welcome To The Top Of The Market, Again [View article]
    Thank you for the calming effect.
    Feb 27 05:48 PM | Likes Like |Link to Comment
  • Welcome To The Top Of The Market, Again [View article]
    No. The Greedometer gauge provided a warning PRIOR to :
    - the 2000-2003 collapse
    - the 2007-2009 collapse
    - the quick 20% collapse in 2010 that had to be stopped with more monetary candy
    - the 19% drop in 2011 that had to be stopped with more candy
    - the quick 10% drop in early 2012 that had to be stopped with more candy from the ECB and Fed
    - the quick drop in late 2012 that had to be stopped with more candy from the ECB and Fed

    ZERO false alarms and ZERO missed calls since the beginning of the data in January 1999. To be complete, the 3 events occurring in 2011 & 2012 were identified with the gauge. The 3 events prior to this were identified with back-testing.

    regards
    Feb 27 07:40 AM | Likes Like |Link to Comment
  • Welcome To The Top Of The Market, Again [View article]
    Thank you. Good luck.
    Feb 27 07:32 AM | Likes Like |Link to Comment
  • Welcome To The Top Of The Market, Again [View article]
    I take your point. The S&P500 only dropped form 1461 (Oct 17) to 1353 ( Nov 15). A 100-point+ drop in the S&P500 in 4 weeks is not a crash. I contend it was the opening salvo of a protracted crash. Since more monetary candy had to be brought to bear to stop it, I'm confident the crash would have kept going and my forecast would have been correct. regards
    Feb 27 07:30 AM | Likes Like |Link to Comment
  • Welcome To The Top Of The Market, Again [View article]
    I hope you found it interesting.
    Feb 27 07:23 AM | Likes Like |Link to Comment
  • Welcome To The Top Of The Market, Again [View article]
    Yes. The topping out process is indeed a process, not an event. The S&P500 saw 1500 in March & September 2000 (6 month spread), and again 6 months (May- Nov) in 2007. It will likely take the same this time. The point of this article is to have people recognize that the current period resembles early 2000 and 2007 and to consider acting accordingly.

    FYI: I have 2 algorithms. One is slow moving (the Greedometer), and is the focus of this article. The other is faster moving (mini Greedometer) and better able to identify market moves with tighter constraints. The Greedometer has done its job: warned that 2013 looks ideal to initiate a stock market collapse slightly larger than the 2007-2009 collapse. Since that is a known, I have switched my focus to the mini Greedometer to better nail down the top and speed of collapse. That should be fairly tightly constrained by May.
    Feb 27 07:22 AM | 1 Like Like |Link to Comment
  • Welcome To The Top Of The Market, Again [View article]
    Good point, sir. That said, I'm an applied scientist and am prone to model with empirical data. On that basis, my algorithms can only provide a warning that circumstances are likely to warrant a certain response from capital markets (specifically the S&P500). The gauges cannot infer when another central bank intrusion will happen -or if that intrusion will be effective.

    But as long as I'm guessing about Fed moves.... Try this on: How about Dr. Bernanke retires early next year and is replaced with another ultra-dove (Yellen, Dudley). A harsh economy (GDP contraction, virtually no core CPI inflation but 4-5% total CPI courtesy of QE3 & QE4) and useless Congress cause the Fed to begin erasing its balance sheet. A $T/year in QE acquired Fed bonds get lost between the mattress cushions.
    Feb 27 07:12 AM | 1 Like Like |Link to Comment
  • Welcome To The Top Of The Market, Again [View article]
    I can't / won't give specific investment advice publicly. But if one were inclined to short the S&P500 (and comfortable with the perils that entails), you might be on the lookout for signs of extreme froth and it being overbought. Then compare those attributes with what was seen in pre-crash 2007.
    Feb 26 04:58 PM | Likes Like |Link to Comment
  • U.S. Could Enter Recession In May [View article]
    Yup.
    Feb 26 04:53 PM | Likes Like |Link to Comment
  • The Rats Are Jumping Ship: Welcome To The Top Of The Stock Market [View article]
    Hello.

    Thanks for the note. The point of that article was to provide a warning that the Greedometer was displaying a reading consistent with a secular stock market top. Judging by the fact that QE4 had to be added to the policy mix after the Greedometer warning, it is safe to assume the Fed saw concerned about the economy (and apparently stock market) rolling over. That warning was ended by more monetary policy goodies -as the previous 5 were (2000-2003 crash, 2007-2009 crash, 2010 20% drop, 2011 almost 20% drop, early 2012 drop).

    It can be expected that the Fed & ECB will intrude if they feel there's more upside than downside to the action. However, it cannot be known that the Fed and / or ECB will intrude into the economy and that their intrusion will be sufficient to stop a collapse. The best that can be done is to be able to have a credible warning that markets are likely to begin to collapse. I don't try to estimate whether a Fed/ECB intrusion will successfully stop it. Is has now stopped 6 Greedometer warning / sequences. The 7th began 6-7 weeks ago.

    Let's talk about where we are now (late Feb 2013).

    Would you rather:
    A) Heed a warning with a 6 out of 6 track record -- that the US stock market will probably top-out in April then begin to collapse over the roughly 1.5 years that follow -- knowing this collapse could possibly be stopped by yet another Fed-ECB monetary steroid injection? OR
    B) ignore that warning, assume the Fed and ECB will rise to the rescue once more and stop the pending collapse in front of us? If you select this choice, you are basing your investment strategy on hope.
    Feb 23 11:10 AM | Likes Like |Link to Comment
  • Greedometer Newsletter Is Out! [View instapost]
    I don't think the size of the pull-back we see in Feb-March matters much (and I think it will be very small). The topping-out process for risk assets is always very slow, and usually misinterpreted by most. Look at 2007: the S&P500 remained close to 1500 from April through December. And virtually no one was forecasting the train wreck that followed.
    Feb 22 09:23 AM | Likes Like |Link to Comment
COMMENTS STATS
40 Comments
33 Likes