Michael A. Gayed's  Instablog

“Take calculated risks. That is quite different from being rash.” - George S. Patton Jr.

The market wants to believe.

While this past week was quite volatile, equities pretty much ended flat to slightly up (depending on which index you look at) despite continued concerns over a European debt solution.  Monday was a hard down day which frightened many into thinking the advance was done, and then lo and behold markets recovered subsequently.  Every big down day seems to be followed by quick recovery.  The stock market now reminds me of Rocky who once said "I ain't goin' down no more Mick."

The market action remains consistent with the Fall Melt-Up scenario I first laid out on September 29th before this move happened, and our ATAC quantitative models positioned us full risk-on to take advantage of the move.  I do not believe we are done for a second.  I hear too many people thinking they should short the advance because every other prior one ended.  The difference this time around is that the bond market is confirming that the conditions have changed as yields rise.  And yes - markets love rising interest rates, not falling ones.  After all, a rising interest rate means there is demand for money pushing the cost of that money up - a bullish thing for the economy.  In addition, the strength in the Financials sector is very positive for further gains ahead.

How one plays the potential for further gains in the Fall Melt-Up scenario depends on the individual.  I am well aware that there are active traders and investors tracking my writings who think they can do it themselves and don't want to reach out to us regarding our investment management services because they can just read my analysis.  First, allow me to say that this is not a motivating factor for me.  I write and analyze markets for Pension Partners to get attention and so that we can ultimately grow our firm.  Otherwise, I am not going to put this effort out there for nothing in return.  Second, our ATAC quant models are far more powerful than I am at investing.  I encourage every single one of you to visit our website and look at the ATAC model backtested results which in the worst decade since the Depression far exceeded performance wise a buy and hold strategy of the market.

So reach out to us - we can provide a true uncorrelated and alternative investment approach, and you can have access to me if interested in more direct conversations regarding market movement.

Sincerely,
Michael A. Gayed, CFA
Chief Investment Strategist
Pension Partners, LLC

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.