2 replies to this topic

[Douglas]

The best the risk window early this week could do was stall the climb in stock prices.  That was really surprising given the tight cluster of eight risk cycle turns in this risk window.  That makes two duds in a row, and it look like it's not going to get any better.  Over the next two weeks there is a risk cycle turn every single day with no distinct clustering which could be used to identify a risk window.  The best guess for risk windows in one these big fuzzy clouds is usually the beginning, middle and end of the cloud which points roughly to Monday and Tuesday of this coming week, Monday and Tuesday of the following week and the end of the following week (July 25-26, August 1-2 and August 5).  

 

The only excuse I can come up with for the recent poor performance of the risk windows is the incredible central bank risk crushing pumping associated with the BREXIT vote. When all else fails and in the absence of mirrors, I blame the FED.  So easy!

 

The trading system gave a sell signal this past Thursday, so it is in cash. 

 

Regards,

Douglas

[dasein]

do you have a cyclical input for your risk windows - could it be that the cycle has changed?

[Douglas]

Several of the risk cycle turns are cyclical.  Sometime this year I will do a re-evaluation of all of the risk cycle turns to determine if they still appear to be efficacious.  I am constantly on the search for new ones which I add as they are discovered.  Unfortunately it is a fairly subjective, crystal ball sort of exercise, but over time it has made some noteworthy calls.  I don't use the risk windows identified from clusters of risk cycle turns per se to trade except as a sort of stop for or enabler of a trade determined by the trading system.

 

As I note in my post, I really feel the massive intervention by the central banks is distorting risk in all sorts of ways.  Bulls now fearlessly buy all dips since they know these CB's worldwide have their backs.  Bear markets have been banned by the CB's in the name of trickle down from top end wealth creation.  At some point the high end bubbles being created will reach some limit of physics, politics or common sense, but until then it appears that not fighting the central banks will be lavishly rewarded.  Also until then it will probably continue to be very good to own stores of wealth, but being poor or middle class paid in increasingly worthless paper not so much.

 

Regards,

Douglas