Weekly Economic Update 12-30-2016

For Clients: Two Big Updates!

  1. We are finally approved to use stop loss limit orders. As some of you know this was a big reason we moved to TD Ameritrade, but I was immediately shut down when I tried to use them as I sounded every alarm at the trading desk (seriously). Many months later we have a solution that both sides are happy with and going forward new trades will have stop loss limit orders placed on them.
  2. I have been working on a momentum strategy, based on a successful strategy managed by a large investment bank. The strategy starts with 50 equity ETFs (including long, short, commodity and currency ETFs) and 10 bond ETFs and ranks them by 1 month performance. It takes the top 10 equity ETFs and the top 5 bond ETFs and weights each position based on its 30-day volatility. The algorithm creates a recommended stop loss limit order and alert level based on the past 6-month trading range for each position. The rankings are run and portfolios adjusted monthly. In next year’s update, we’ll start tracking this strategy to see how well it works to determine if it’s something worth implementing.

The markets have been largely quiet as the big money managers have been off for the holidays. The start of 2017 may see another attempt at Dow 20k, and while the economic news hasn’t been supportive of another attempt, optimism remains high. High debt levels will be a focus in 2017 as the global economy attempts to find a way to move forward to justify a very inflated stock market. For this and other economic news, along with my thoughts on interest rates dropping and when I think we will move into Gold, be sure to tune into this week’s update.

Bonus Section: An analysis of 10-year Treasury yields, a look at price levels on Gold and Gold Miners, macroeconomic indicators, percentage of stocks trading above their moving averages, total put/call ratio and charts from the recent Commitments of Traders report.

Weekly Update (12 min):

  • Treasury Yields
  • Gold
  • Debt is Enemy of Growth
  • Auto Loans are Upside Down
  • Home Flippers are Back
  • Trade Deficit Rises

Bonus (8 min):

  • S&P 500 vs M1 Money Stock
  • iShares 20+ Year Treasury Bonds (TLT) vs M2 Money Stock
  • Ten Year Treasury Yield Support Levels
  • Gold (GLD) Support Levels
  • Gold Miners (GDX) Support Levels
  • S&P 500 vs % of S&P 500 Stocks Above 50-day MA
  • S&P 500 vs % of S&P 500 Stocks Above 200-day MA
  • S&P 500 vs Total Put/Call Ratio Relative to its 20-day MA
  • Commitments of Traders – S&P 500
  • Commitments of Traders – 10 Year Treasury Yield
  • Commitments of Traders – US Dollar