UPDATE: ACTUAL 10YR YIELD AND S&P 500 2Q CHANGE VS. RISK ON - RISK OFF MODELS - 19/01/2016

Jan. 17, 2016 9:09 PM ET6 Comments
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Asset class modeling, Macro analyst, Bonds & Equities, Currencies & Commodities

Contributor Since 2011

Robert P. Balan runs Predictive Analytic Models, #1-rated trading unit at Seeking Alpha. PAM trades Swiss HF funds using Federal Reserve, US Treasury, and term (money) market liquidity data flows as basis for trading decisions. He is domiciled in Zurich, Switzerland.

Robert Balan has 5 decades of experience in the financial markets. Education in Mining Engineering, Computer Science & Engineering, M.S in Quantitative Finance, and training in Economics led to a commodity analysis career during the commodity boom of the early 1970s. Robert made a switch to global macro focus in the early 1980 when the commodity bull market waned, with specialization in foreign exchange. Robert wrote a very high profile daily FX analysis while Geneva-based (Lloyds Bank Int'l) in the mid-1980s (the first FX commentary with a real global readership, "most accessed" in the Reuters and Telerate networks from 1988 to 1994).

He worked for Swiss Bank Corp and Union Bank of Switzerland (precursors of today's new UBS) as head of technical research in various finance centers (London, New York, and subsequently, head of prop trading at SBC in Toronto ) from the late 1980s to mid-1990s. A stint at Bank of America as head of global technical research followed in late 1990s to the early 2000s. 

Robert returned to Switzerland in 2004 as head of technical research and strategy, and FX market analyst for Swiss Life Asset Management in Zurich. Robert wrote FX analysis and capital markets commentary for Saxo Bank (Denmark) in the early 2000s. He joined Diapason Commodities Management (CH) in Lausanne in 2008 as senior market strategist, and subsequently Chief Market Strategist, utilizing fundamental macroeconomic drivers and structural/technical data in modeling asset price and sector movements. 

Robert wrote a book on the Elliott Wave Principle in 1988, which has been hailed by the London Society of Technical Analysts as best ever book written on the subject. Robert is a member of the National Association for Business Economics (NABE), U.S.A. 

Current Status of Models and Assets (19/01/2016), see chart above:

Click on the link to update chart.

product.datastream.com/DSCharting/gatewa...

Models' Forecasts: Long Treasury yields and S&P 500 may be on a brief risk-off mode soon, and could initiate countertrend rallies which may last three weeks. However, the risk-off model may resume thereafter and both 10yr yield and SPY may continue to decline until about March 22 2016.

Investment implications: Risk-off mode continues until perhaps 3rd week of March. After that a sharp recovery for yields and SPY over subsequent weeks, as suggested by the RO-RO models.

The favored technical outlook for SPY:

product.datastream.com/DSCharting/gatewa...

The favored technical outlook for the US 10yr bond yield:

product.datastream.com/DSCharting/gatewa...

Click on the links to update the charts.

NOTE: This blog is merely an OPINION of the author, is NOT an INVESTMENT ADVICE, and does NOT constitute a SOLICITATION for business.

USE THE INFORMATION HEREIN AT YOUR OWN RISK. THE AUTHOR IS NOT RESPONSIBLE FOR ANY LOSSES YOU MAY INCUR AS A RESULT OF INVESTING OR TRADING USING THE INFORMATION FROM THIS BLOG.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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