Non-Farm Payroll (NFP) Model Forecast – November 2015

Posted on December 3, 2015 by

This article presents the Trader Edge aggregate neural network model forecast for the November 2015 non-farm payroll data, which is scheduled to be released tomorrow morning at 8:30 AM EST. Continue reading →

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11-30-2015 AAR Strategy Update Posted

Posted on November 30, 2015 by

The November 30, 2015 AAR Strategy update is now available on the AAR Subscribers page.  If you are not currently a subscriber and would like to learn more about the strategy, there is a detailed description on the AAR Strategy page.

The AAR strategy is a conservative, long-only, asset allocation strategy that rotates monthly among five large asset classes: large-cap U.S. stocks, developed country stocks in Europe and Asia, emerging market stocks, U.S. Treasury Notes, and commodities. The strategy was inspired by the Ivy League portfolio and uses trend and technical filters to reduce downside risk.

If none of the five candidates pass their respective trade filters, the AAR strategy remains in cash for the month.   Stop-loss orders are used on every trade to control losses and to facilitate position sizing and risk management.

Brian Johnson

Copyright 2015 - Trading Insights, LLC - All Rights Reserved.

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Posted in Asset Allocation Rotational (AAR) Strategy, Market Timing, Relative Strength, Risk Management, Strategy Development, Technical Analysis | Tagged , , , , , , | Leave a comment

US Manufacturing Data at Recession Levels

Posted on November 18, 2015 by

I read an interesting article by Jill Mislinski on AdvisorPerspectives.com. The article was titled "Empire State Manufacturing Declined for Fourth Consecutive Month." The takeaway from the article is that US Manufacturing is slowing at a rate not seen since the last two recessions: 2001 and 2008. Continue reading →

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Posted in Economic Indicators, Fundamental Analysis, Market Commentary, Market Timing, Risk Management | Tagged , , , , , | 1 Comment

Recession Model Forecast: 11-01-2015

Posted on November 18, 2015 by

The following article updates the diffusion index, recession slack index, aggregate recession model, and aggregate peak-trough model through October 2015. In January 2015, I created a new explanatory variable for a market-based indicator; I added two new explanatory variables in April and June 2015, and one more in September 2015. After adding a number of new economic and market-based variables recently with very strong explanatory power, I decided to cull three of the original independent variables with the weakest historical performance and most questionable cause and effect recessionary influence. The resulting 19-variable model has a very diverse set of explanatory variables and is very robust.

Each of the explanatory variables has predictive power individually; when combined together, the group of indicators is able to identify early recession warnings from a wide range of diverse market-based, fundamental, technical, and economic sources. After the latest additions and deletions, the total number of explanatory recession model variables is now 19. The current and historical data in this report reflect the current model configuration with all 19 variables. Continue reading →

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Posted in Economic Indicators, Fundamental Analysis, Market Commentary, Market Timing, Recession Forecasting Model, Risk Management | Tagged , , , , , , , , | Leave a comment

More Warnings Signs in China

Posted on November 9, 2015 by

The manipulated equity markets in China have rebounded (which is what happens when you restrict selling), but the problems continue. China's exports and imports have been declining for months, which is further evidence of recession and directly contradicts the "official" GDP fantasy reports of 6.9% annual growth. Continue reading →

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Non-Farm Payroll (NFP) Model Forecast – October 2015

Posted on November 5, 2015 by

This article presents the Trader Edge aggregate neural network model forecast for the October 2015 non-farm payroll data, which is scheduled to be released tomorrow morning at 8:30 AM EST. Continue reading →

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Posted in Economic Indicators, Market Commentary, Market Timing, NFP Forecasting Model, Risk Management | Tagged , , , , , , | Leave a comment

Earnings and Revenues Decline While Prices Rise

Posted on November 1, 2015 by

I have written a number of recent articles about the troubling state of the equity markets. There have been many causes for concern: technical, fundamental, valuation, divergences, and global risks, among others. All of these are important, but none are more important than earnings and revenue growth, the prerequisites for sustainable bull markets.

It has been a while since I have written about earnings and revenue growth and the recent trends in both are extremely troubling. FactSet is one of the leading providers of data and analytics and is arguably the best source for information and analysis of equity earnings and revenue trends. FactSet publishes a weekly Earnings Insight report, which is the source for all of the charts and data for this article. Continue reading →

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Posted in Earnings, Fundamental Analysis, Market Commentary, Market Timing, Risk Management | Tagged , , , , | Leave a comment

Extreme Divergence: Negative Equity Returns Ahead

Posted on November 1, 2015 by

Many traders use technical and/or fundamental data, but few traders have discovered the unique benefits of using sentiment data in their investment process. Sentiment data attempts to quantify the emotional mood of investors and traders and can be used as a very effective contra-indicator. When traders are unusually complacent and overly bullish, markets tend to pull back. Conversely, when traders panic and emotions are running high, this often indicates a potential bottom and an attractive buying opportunity. The following article presents a unique and troubling sentiment warning signal from a recent proprietary research report from SentimenTrader. Continue reading →

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Posted in Market Commentary, Market Sentiment, Market Timing, Risk Management | Tagged , , , , , , | 2 Comments