Reaching a critical point in the stock markets
Frankfurt, February 2016
Currently I am in Frankfurt for business. Not my favorite time of the year to be here since I prefer the warmth in Spain or other exotic places but my different business activities lead me to so many different places. What I like about Germany is their outstanding work ethic, direct approach and honesty. This is one of the reasons why this country, despite the social issues, still is the biggest motor of the European economy.
I come here every year during this time because I do own a company that is the exclusive representative for South America of the glass and interior decoration line of the world famous brand Versace. I really like this as having this business gives me a great network in South America. It also gives me a feel of how the economy is going as I get to get the feedback of the worldwide sales and above all the more inside stories of what to expect based on people’s perceptions and opinions. This by itself is priceless information already.
Lately I really have noticed that consumer confidence is lowering amongst buyers and we see the same thing happening in the stock markets. The confidence is gone, the start of 2016 has been extremely bad and as of today the S&P 500 is down more than 10% for the year, oil is down close to 30% of the year and we suddenly have seen a large rise in gold which exceeded its six months’ highs today.
What will happen in the markets?
Prediction is always a tricky thing. It is very hard to predict and in my way of trading I only follow price action. However if you’d ask me, as I mentioned in my last post, if the SPY (ETF of the S&P 500) breaks the huge support level of 180, then we are well on our way to make this a year comparable to 2008.
See here the technical picture:
If the market drops, and stays below these levels of support around 180 – 181 we are on our way to a structural bear market. In 2008 the SPY dropped in total more than 56% and closed the year at -37%. My prediction is that the same is going to happen.
So, when this happens how can you actually profit from it?
I have written about this before. The way I trade is that I do not really care what the markets do, I just react to the price action. I trade both long and short to take advantage of increasing markets and declining markets.
As I mentioned before; the holy grail of trading is: A perfect execution of a suite of non-correlated systems. So, what do you need for that?
- Trade systems that make money in bull markets
- Trade systems that make money in bear markets
- Trade systems that make money in sideways markets
- Trade all these systems simultaneously
- Have a quantified approach to this, so you know what to expect
- Automate the process
- Execute it mistake free
This is what I teach my mentoring clients and all of them that are trading this combined approach are actually up for the year. If we are getting another year like 2008, which is from an economic standpoint of view a disaster of course, but I know I will be very profitable in these markets. Mostly my bull market and sideways market system will be flat (no positions) and my short systems, designed for these kind of messy markets will crush it.
For those who are interested to work with me, you can fill out a questionnaire as well at the link below.
I only work with a couple of very committed people because this takes a considerable time commitment from my side as well to actually teach you one on one. So what we do is, I will review your questionnaire and if I think I can help you and we can be a good fit, we can work together for the next 6 months. This is not for everybody as there is a large financial commitment to it but it will be a LOT more expensive if you do not take action at all.
Click the link below to apply;
I will stay here another 3 days, after that I will be in Hong Kong and promise to send you a new update.