Market prediction based on macroeconomic indicators - page 21

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Олег avtomat:

...The SP500's future direction of travel is DOWN.

Temporary, maybe a couple of days or a week at most. The S&P500 has not significantly corrected since 2012. A 10%-20% correction is not a bear market. Even in October 2014 the S&P500 fell worse than it is now and then recovered within 2-3 weeks and kept going up. At a time like this you have to buy. All economic indicators in the US show growth. Inflation is small. Oil is down below $40. Interest rates are zero and there is no sign of an increase in 2015.
 
Vladimir:
Temporarily, maybe another couple of days or a week at most. The S&P500 has not significantly corrected since 2012. A 10%-20% correction is not a bear market. Even in October 2014 the S&P500 fell worse than it is now and then recovered within 2-3 weeks and kept going up. At a time like this you have to buy. All economic indicators in the US show growth. Inflation is small. Oil is down below $40. Rates are zero and no increase is in sight for 2015.
Time will tell... And all of the above (neither collectively nor individually) are not determinants of SP500 growth. And certainly, it does not cancel its current downward reversal - an accomplished fact - no matter how it is called, whether it is a trend or a correction...
 
Incidentally, the picture is similar in other US and European indices.
 
A great opportunity to buy shares in good companies! When the market opened I bought until the prices went up.
 
Vladimir:
A great opportunity to buy shares in good companies! When the market opened I was buying until the prices went up.
))))) uh-huh... So you're only stocking up now???? What about the previous posts - all up, heading for new highs etc?
 
Дмитрий:
))))) uh-huh... So you've only just stocked up now???? What about the previous posts - all up, going to new heights etc?
I don't get it. Buying is good, i.e. I was betting on the market going up. Still expecting new tops by the end of September. I see no contradiction between my actions and words.
 
Vladimir:
I don't get it. Buying is good, i.e. I was betting on a rise in the market. Still expecting new highs by the end of September. I see no contradiction between my actions and my words.
Don't mind me. It's just that there are nasty words like "drawdown", "margin call" etc.
 
Дмитрий:
Never mind that. It's just that there are nasty words like "drawdown", "margin call" etc.

I do not trade on margin. The drawdown, yes, does exist. If the market was moving monotonically in one direction there would be no drawdown. Again, I repeat the objective of my experiment:

  1. The purpose: to invest, not to trade. That is, I invest in a bull market (shares of many companies) and hold there until the bear market (economic recession). The model is used to predict the onset of a bear market in order to avoid losses.
  2. I am interested in quarterly market movements based on macroeconomic indicators. The model predicts the market and economic indicators such as gross product growth 2 quarters ahead. A recession by definition is a decline in gross product growth over two quarters.
  3. My stock portfolio is maintained at a constant size, i.e. I do not let it rise or fall. If any stock increases by 10% or more, the profit is taken off. If a stock falls by 10% or more, I buy it only if I have profit on it. If there is no profit in a stock and it has fallen by >10%, I do nothing. Shares that do not show any growth within 1 year are replaced with other shares.
  4. If the model predicts one quarter of decline in S&P500, I temporarily buy short ETF as insurance. If the model predicts two quarters of gross product decline, the entire portfolio is sold and replaced with short ETFs.
With this strategy, my portfolio, although not growing in size, makes money when the market moves up. It also makes money if the market goes >+/-5% flat (range market).

This morning, for example, he bought many stocks down 10% of their constant size. On Mondays like this, the US market inertia moves down like the Asian markets, but often closes above the open.

 

Here is another version. They were buying the dollar in anticipation of a rate hike, China lowered the yuan, expectations were not met and they started selling the dollar.

Plus, as I said before, demand in China is decreasing, plus the fall of the yuan makes raw materials more expensive for them.

But, there is one catch. Usually the rally in the euro has coincided with the rally in commodity markets, and this is not the case now. Something to think about here....

My guess is that the markets are becoming increasingly uncertain and wandering, looking for an equilibrium point.

 
Vladimir:
With this strategy, my portfolio, although not growing in size, makes money when the market moves up. It also makes money if the market goes into a >+/-5% flat (range market).

This morning, for example, he bought many stocks down 10% of their constant size. On such Mondays the US market inertia moves down like the Asian markets, but often closes above the open.

As far as investments are concerned, I recommend William O'Neill's books on the American market. In my opinion they are worth reading.

Also, every new rally usually involves a different stock, each time it is usually a different industry.

That's one of the most important conditions. So somehow you have to be able to figure out the "leading sector of the economy", on the current bullish trend.

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