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We Don't Trust This Market - Part 1



  • Part I: Last Week. Worst week since October 2008!
  • Part II: This Week. A market that can't be trusted!
  • Part III: Game plan. This is no time to be brave!
  • This idea was discussed in more depth with members of my private investing community, Macro Trading Factory. Get started today »

Note: This article was first published to both Macro Trading Factory as well as Wheel of Fortune with regard to the Funds Macro Portfolio ("FMP").

Part I: Last Week

Last week was brutal.

Although the market clawed back much of its intraday losses in the last 15 minutes of trading, during the Friday session, it was the worst week for Wall Street since October 2008.

Only 3% of the S&P 500 constituents closed above their 50-day moving average. That's lower than 99% of historical readings, with data going back to December 2001. The only periods with fewer percentages were July 2002, October/November 2008, and December 2018.

The Dow Jones Industrial Average (DIA) declined 13% over the past six trading days. Going back to its start in 1896, this is the 47th largest six-day decline out of 35,538 data points.

To put that in the right context, during the last 75 years, the only periods with a larger six-day decline in the Dow than the recent one were October 1987 (Crash), September 2001 (9/11), and October 2008 (Financial Crisis).

As a reminder, back in December 2018, the Fed was forecasting a Fed Funds Rate of 3.125% (!!!) by the end of 2020. In December 2019 (only a bit over two months ago!), they had lowered that forecast to 1.625% after cutting rates three times over last year. Right now, the market is pricing in a 0.63% Fed Funds Rate by year-end, implying 3-4 more rate cuts.

High credibility, anyone?

Few samples of the past week (negative) performance of the main indices, as well the leading/most noisy names/assets on Wall Street:

  • Virgin Galactic (SPCE): -27%
  • Tesla (TSLA): -26%
  • Apple (AAPL): -13%
  • Dow Jones (DIA): -12%
  • Oil (USO, OIL): -12%
  • S&P 500 (SPY): -11%
  • Nasdaq (QQQ): -11%
  • Amazon (AMZN): -10%
  • Google (GOOGL

Macro Trading Factory is a new service focusing on macro views, market outlook, and asset-allocation.

We demonstrate portfolio and risk management, in a simple and relaxed manner.

Our model-portfolio is:

  • well-diversified, containing up to 25 leading ETFs and CEFs.
  • managed by a team of professionals, led by TMT.
  • aiming to outperform the SPY on a risk-adjusted basis.
  • allowing you to keep-up with your daily-routine.

MTF is your perfect solution if you're looking for an ongoing, professional, trusted, affordable guidance, especially with little time on their hands.

Macro Trading Factory for An Upward Trajectory!

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This article was written by

The Macro Teller profile picture
Looking to outperform the SPY on a risk-adjusted basis, in a relaxed manner

Welcome to my profile and thanks for stopping by!

First and foremost, let's clarify two important points that you might currently find confusing:

1. "Macro Trading Factory" ("MTF") by "The Macro Teller" ("TMT") is the second service we offer after the "Wheel of FORTUNE" ("WoF") by "The Fortune Teller" ("TFT").

2. TFT and TMT are the same person. It's due to SA policy that we need to open two profiles in order to run two services, but rest assured we don't suffer from schizophrenia (as of yet)...

TMT is an account that represents a business which is mostly focuses on portfolio- and asset- management. The business is run by two principals that (among the two of them) hold BAs in Accounting & Economics, and Computer Sciences, as well as MBAs. One of the two is also a licensed CPA (although many years have gone by since he was practicing), and has/had been a licensed investment adviser in various countries, including the US (Series 7 & 66).

On a combined basis, the two principals lived and worked for at least three years in three other-different countries/continents, holding senior-managerial positions across various industries/activities:

On one hand/principal, IT, R&D, Cloud, AI/ML, Security/Fraud, Scalability, Enterprise Software, Agile Methodologies, and Mobile Applications.

On the other hand/principal, Accounting, Banking, Wealth Management, Portfolio Management and Fund Management.

Currently, they run a business which is mainly focusing on active portfolio/fund/asset management as well as providing consulting/advisory services. The business, co-founded in 2011, is also occasionally getting involved in real estate and early-stage (start-up) investments.

The people who work in and for this business are an integral and essential part of the services that we offer on SA Marketplace platform: Wheel of Fortune, and Market Trading Factory. While TMT (or TFT for that matter) is the single "face" behind these services, it's important for readers/subscribers to know that what they get is not a "one-man-show" rather the end-result of an ongoing, relentless, team effort.

We strongly believe that successful investors must have/perform Discipline, Patience, and Consistency (or "DCP"). We adhere to those rigorously.

The contributor RoseNose is both a contributing and promoting author for Macro Trading Factory. 

On a more personal note...

We're advising and consulting to private individuals, mostly (U)HNWI that we had been serving through many years of working within the private banking, wealth management and asset management arenas. This activity focuses on the long run and it's mostly based on a Buy & Hold strategy.

Risk management is part of our DNA and while we normally take LONG-naked positions, we play defense too, by occasionally hedging our positions, in order to protect the downside.

We cover all asset-classes by mostly focusing on cash cows and high dividend paying "machines" that may generate high (total) returns: Interest-sensitive, income-generating, instruments, e.g. Bonds, REITs, BDCs, Preferred Shares, MLPs, etc. combined with a variety of high-risk, growth and value stocks.

We believe in, and invest for, the long run but we're very minded of the short run too. While it's possible to make a massive-quick "kill", here and there, good things usually come in small packages (and over time); so do returns. Therefore, we (hope but) don't expect our investments to double in value over a short period of time. We do, however, aim at outperforming the S&P 500, on a risk adjusted basis, and to deliver positive returns on an absolute basis, i.e. regardless of markets' returns and directions.

Note: "Aim" doesn't equate guarantee!!! We can't, and never will, promise a positive return!!! Everything that we do is on a "best effort" basis, without any assurance that the actual results would meet our good intentions.

Timing is Everything! While investors can't time the market, we believe that this applies only to the long term. In the short-term (a couple of months) one can and should pick the right moment and the right entry point, based on his subjective-personal preferences, risk aversion and goals. Long-term, strategy/macro, investment decisions can't be timed while short-term, implementation/micro, investment decision, can!

When it comes to investments and trading we believe that the most important virtues are healthy common sense, general wisdom, sufficient research, vast experience, strive for excellence, ongoing willingness to learn, minimum ego, maximum patience, ability to withstand (enormous) pressure/s, strict discipline and a lot of luck!...

Analyst’s Disclosure: I am/we are long AMZN & SHORT AAPL (PAIR TRADE), GLD, IGSB. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

AAPL positioning:https://seekingalpha.com/article/4315894-apple-is-sell-300-pure-and-simple-will-diagonally-after-all TSLA positioning: https://seekingalpha.com/article/4315501-tesla-451-share-post-2019-delivery-numbers-is-soft-sell

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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