Here’s a post from ZeroHedge where “Variant Perception” says a crash is coming between now and the beginning of Q4 2013. Q4 begins 1 October 2013.
CRASH COMING (Zero Hedge)
“Via a mathematical framework, that has been empirically
shown to accurately model bubbles, and give a prediction for when they will
ultimately come to an end, Variant Perception (VP) investigates the
S&P 500 today. The framework suggests a window of time within which the
S&P will experience a 'regime change', which may involve a steep price
drawdown. Using this framework, VP predicts this regime change will occur any time between now
and the beginning of Q413.” Story at Zero Hedge at…http://www.zerohedge.com/news/2013-09-07/ugly-wager-or-when-will-us-equitymarket-bubble-pop
Variant Perception may be found at…
http://www.variantperception.com/
MARKET REPORT
Monday, the S&P finished up 1% to 1672 (rounded) at the close.
VIX was down 1.4% to 15.63.Monday, the S&P finished up 1% to 1672 (rounded) at the close.
Today was a statistically significant day as measured by price and volume
so a down day is suggested for tomorrow, likely followed by further down days
in the short-term.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks
advancing on the NYSE was up slightly to 52% at the close Monday. (A number above 50% for the 10-day average is
generally good news for the market.)
New-highs outpaced new-lows today leaving
the spread at +123 (it was +67 Friday), with the 10-day moving average of
change in spread positive and trending up.
The Internals are positive on the market
BACKTESTING MARKET INTERNALS – OK, BUT NOT
FOR TRADING
I report internals, because I think they
give clues about future market direction, especially when there is divergence. However,
I decided to do a back-test of the market internals to see if they are truly
predictive of market action in the short term on a daily basis. Looking at charts vs. the S&P 500, the
internals I report do SEEM to be
accurately suggesting future market movement, but patterns can be deceiving. My back-test consisted of 3-market-internal, indicators
that needed to agree with each other for a buy or sell signal. I found they slightly underperformed the
S&P 500 over the last 2-years by about 3% each year. Since they
underperformed, there is no point in back-testing 10-years (nor going into
detail about the indicators). The fact
that they underperformed by a fairly small number shows there is some
correlation and one could conclude that the internals (the way I am using them)
are an OK trend following indicator,
but not great. I’ll need to do more work
to see it the internals can be tweaked to find a better predictive indicator.
NTSM
Monday, the overall long-term NTSM analysis remains
HOLD at the close.
MY INVESTED POSITION
I remain about 20% invested in stocks as of 5 March (S&P 500
-1540). The NTSM system sold at
1575 on 16 April. (This is just another
reminder that I should follow the NTSM analysis and not act emotionally – I am
under-performing my own system by about 2%!)
I have no problems leaving 20% or 30% invested. If the market is cut in half (worst case) I’d
only lose 10%-15% of my investments. It
also hedges the bet if I am wrong since I will have some invested if the market
goes up. No system is perfect.
