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September 25, 2016

"Momentum and Volume are lagging."

Preview from my weekly report*

Relieved by the FOMC's apparent inability to reach a consensus, the S&P 500 Index rebounded on Wednesday and Thursday last week. Under the surface, however, RSI Momentum and On Balance Volume remain less than bullish.

Economists suffer from the delusion that they can fine-tune the economy. See our analysis starting on page 55 to see how unsuccessful economists have been at predicting and promoting economic growth over the past year. We have been pointing out that the FOMC says monetary policy changes depend on incoming economic data, but the fact is the actual data simply has not been strong enough to justify raising interest rates. Economists' expectations have been consistently overly optimistic and disappointed for more than a year as economic growth has actually slowed and not accelerated as economists hoped. Until that changes, monetary policy ought to remain highly accommodative.

Our Colby Economic Expectations Index fell to new low. We consistently have maintained that is too soon to be confident of the sustainable economic uptrend that the consensus of economists has been hoping for. The established trend suggests that hope is not a substitute for an objective analysis of actual facts.

The economic data continues to confound economists. Since the peak in our Colby Economic Expectations Index at 90 on 10/23/14, actual data releases have been disappointing relative to overly optimistic predictions by economists. Economic growth has been significantly slower than economists forecasted, and that unexpected sluggishness caused the large decline in our index from 10/23/14 to 9/22/16. Although some of the economic data releases have been beating significantly lowered expectations, that does not imply a strong economy. Rather, economists have been adjusting their expectations downward in light of persistently sluggish trends in the economy, making it much easier for new data releases to be better than the consensus of economists expected. Even so, the actual data disappoints economists' lowered expectations.

Both technical and fundamental data appear mixed and inconclusive at this time. We have been saying that the world remains a risky place, and so we should be prepared for a return of the volatile, high-risk, stock market roller-coaster that has been evident for most of the past year. The stock market is notorious for swinging from one extreme to the opposite extreme. Therefore, there is no change to our recommendation that traders and investors should carefully manage their risk exposure and be prepared for greater volatility ahead. Risk exposures ought to be well controlled.

The full report offers clear and unbiased guidance on the following each week:
Global stock markets
The Defensive stock sectors
The Health Care sector
The Cyclical sectors
The Technology sector
The Financials sector
U.S. bonds and notes
Commodities (Oil, Metals, Agriculture)
Objective Quantitative Rankings for hundreds of Exchange Traded Funds

Click here for my report

Now is the time to take action. Preserve your capital by placing your assets under our careful management--before the next major bear market of -20% to -50% devastates most portfolios.

Make no mistake, the ongoing global economic and financial crisis has not been fixed by any sound or lasting solution. History shows that the authorities will not protect you or give you any advance warning--but we will.

If you agree that making money while staying safe is better than taking big risks in the stock market and exposing your nest egg to potentially ruinous losses, we would be very happy to implement our time-tested strategies for all of your assets. It makes good sense to choose protection--especially at this time when the financial world is stretched out of proportion.

We are always happy to discuss your goals and concerns and answer all your questions.
Call us now for a free consultation.
Please contact
Bill Anderson
by phone: 646-652-6879
or by email: anderson@colbyassetmanagement.com

Robert W. Colby Can Manage Your Account

*For extensive coverage of major global markets with illustrative charts, take a free trial for my weekly report --
click here.


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11-Year Outperformance by the
Top 10 Exchange Traded Funds

Weekly Rankings of Major Trend Relative Strength

My weekly Top 10 ETFs ranked by the Major Trend Relative Strength outperformed the S&P 500 by over an 11-year period of real-time weekly tests. Click here for a graph of simulated performance.

Please note that my ETF rankings are available by subscription--NOW WITH A NO-RISK FREE TRIAL.
See The Colby Global Markets Report (click here).

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My latest book was named one of the top investment books by Stock Trader's Almanac 2005. This book also received an excellent review in the November 2003 issue of Futures.
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My ETF Rankings are not investment advice. Rather, they are an objective ongoing research study.

Analysis of market forces may offer a sense of probabilities. But the many variables that can impact market prices are notoriously difficult to predict. And, market analysis is something less than an exact science. So, sound trading tactics are always recommended. See my
Money Management Rules.

According to CFTC Rule 4.41, hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.

Trading and investing involve risk of significant loss. Your use of this site means that you have read, understood, and accepted my
Disclaimer.            
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Preview Colby's Latest Book:

The Encyclopedia of Technical Market Indicators
, Second Edition, 2003.

Dow Theory Analysis

Gann Angles Analysis

Update on EMA Crossover Signals

Money Management Rules

How To Become A Top Trader.

Ranking Indicator Performance to Maximize Profit by using
"Annual Relative Advantage".


Ranking Indicator Performance by the "Profit/Loss Index".

Robert W. Colby, CMT,
is a consultant to institutional and private investors and traders, providing regular analytical reports, custom research services, and trading systems tailored to clients' objectives. Clients include the most successful traders and investors in the world. Robert is the author of The Encyclopedia of Technical Market Indicators, Second Edition, McGraw-Hill, 2003, which has become the standard reference for indicator and trading systems design. Previously, at several large Wall Street firms, Robert worked as a proprietary trader, technical analyst, and fundamental analyst. He also was adjunct professor at New York University and New York Institute of Finance, where he developed new courses on technical analysis and market timing.

Robert W. Colby is a Chartered Market Technician (CMT), an accreditation granted to members by the Market Technicians Association (www.mta.org) after demonstrating professional competence and ethics over a period of many years. Robert has been a member of the MTA since 1980, and he strongly supports the MTA's high standards. He also supports the MTA Educational Foundation (www.mtaef.org), which works to have technical analysis included in the curriculum of major business schools. Please click the following banner for information about the Market Technicians Association. The Market Technicians Association (MTA) is the national organization of investment analysts, stock market analysis professionals, and certified market technicians in the United States.

 
"Robert W. Colby is America's foremost authority on testing market indicators."
--Bill Meridian, top-ranked investment analyst and international fund manager, www.billmeridian.com

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Ranking ETFs
"Robert Colby has evolved a system that, while hardly foolproof, is pretty clever," wrote Daniel Fisher, "Surfin' ETFs", Forbes, Investment Guide, Special Issue, June 4, 2007.
Please click here to view this article
.
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INTERVIEW of Robert W. Colby in Technical Analysis of STOCKS & COMMODITIES magazine, December 2006 issue.
Please click here to view this article
.
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"Gold's next move: History, logic, and intermarket relationships. See if testing gold's relationship to different markets over a 32-year period provides possible trade signals for the yellow metal."
by Robert W. Colby, CMT.
Please click here to view this article
.
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"Which gold indicators are best? Divining gold's next move."
by Robert W. Colby, CMT.
Please click here to view this free article
.
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"Applying the Relative Strength strategy to ETFs."
by Robert W. Colby, CMT.
Please click here to view this free article.
.
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"PUTTING CANDLES TO THE TEST, How Profitable Are They Really?" by Robert W. Colby, CMT. Published in SFO, STOCKS, FUTURES AND OPTIONS MAGAZINE, Volume 5. No. 8. August 2006, pages 91-94. Please click here to buy this article. (Scroll to bottom of linked page.)
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TradingMarkets.com interviewed
Robert W. Colby, CMT.
View the entire interview online
.
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Active Trader magazine September 2004 interviewed Robert W. Colby. 4 pages. "Robert W. Colby: Technical collector. A discussion with Robert W. Colby about technical trading and his revised Encyclopedia of Technical Market Indicators, Second Edition. By Active Trader Staff."
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For information about
methods that would have performed substantially better than systematic trend-following in back-testing simulation dating back 32 years, email me by clicking on the following link:
Please click here to contact Colby directly.

Click here for a simulated performance graph of one of my trading systems applied to a stock price index.
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MetaStock® PC Software for Technical Analysis
MetaStock® is a powerful technical analysis software program for your personal computer. It offers more than 200 built-in indicators and line studies to enable you to explore a wide variety of methods. And it empowers you to build, back test, and optimize custom trading systems to suit your own particular requirements.

Click this link to save 7%-9% on MetaStock® software
.
Or, click the banner below for a one-month free trial.

MetaStock Software