Market Trends Matter at Signals Matter

Market Trends Matter at Signals Matter

Business, Technology, Internet and network concept. Young businessman shows the word: trends
How To Avoid the Falling Knife

Below we offer an example of how to avoid risk by constantly surveiling markets for changes in market trend.

True or False? “The Trend is Your Friend.”

True. Very true. Extremely true … until it isn’t.

Trends are important. You’ve probably heard investment managers, brokers and especially traders use such expressions as “the trend is your friend,” “don’t fight the trend,” and “don’t catch a falling knife.”

Here at Signals Matter, market trend watching is less about trend following and more about avoiding that falling knife. Market trends change. Stocks go up; stocks go down. Bonds go up; bonds go down. Currencies go up; currencies go down. Commodities go up; commodities go down.

If you are long these things and they go down, you may want out. You get the picture.

Market Trend Watch at Signals Matter

Here at Signals Matter, we are obsessed with market trends, especially trends that fail. We created Trend Watch at Signals Matter to provide our Subscribers with a daily look at changing market trends in the absolute and relative valuation of stocks, bonds, currencies and commodities … and even track trends in market volatility, credit spreads and general market conditions.

The idea is to give Signals Matter Subscribers an almost real-time “head’s up” on what it is happening every day. Trend Watch provides Subscribers with actionable data. Subscribers get to see the world turn ahead of most investors, so they can do something about it, rather than read of its consequences after the fact…

Here’s How We Watch Market Trends

Here at Signals Matter we are transparent when it comes to describing our methodologies. Our Market School, podcasts, video updates and blogs like this one, combine to inform, educate and equip our Subscribers with tools that can make a difference when it comes to investing and containing risk.

Each and every day, we scour the U.S., European, Asian and Emerging Markets for changes in trend, defining whether the markets are trending, de-trending or outright failing.

The word “markets” is a broad term here and extends far beyond equity markets. Each day, we track changes in volatility, changes in financial conditions, changes in global equity indexes, changes in global interest rates and bonds, changes in global currencies and changes in global commodities, ranging from agriculture to energy to industrial and precious metals, for our Subscribers.

Radar Charts

The backbone of Trend Watch is an internally derived and proprietary “radar chart” which defines at a single, color-coded glance all of these market trends–how extreme they are, how lagging they are, how they are moving relative to one another, and how fast they are rising or falling.

For those of you that would like to do this on your own, we need to get a little technical, so bear with us for another two paragraphs. For those less technical, there is relief just ahead.

A radar chart is a chart or plot that consists of a sequence of angular spokes, called radii, where each spoke represents a series of chosen variables. The length of a spoke (on a range from 1 to 10, with “10” being extremely overbought, and “1” being extremely over-sold) is proportional to its underlying valuation, and spokes are connected with one another, rendering a plot in a star-like appearance that can be used, in our instance, to track which markets are outliers, which markets are correlated or divergent and whether (from a 30,000-foot view) the global investment economy is gaining steam, treading water or simply falling apart.

An Example

Here’s an example of an internal, Signals Matter Radar Chart that scans some 50 market indexes each day to determine what is trending and what is not across all markets.

market trends

So, what’s going on here?

This daily radar chart, which summarizes trends across some 50 underlying market variables, shows that global equities (in the “9” extreme) are on a tear (overbought), relative to global bonds (which, in the “5” midway range, are beginning to retreat) and to global currencies (which, in the “2 range” are being hammered by a rising U.S. dollar). Over-all Market Conditions (in the “7 range”) and Global Commodities (in the “6 range”) appear to be semi-stable for now, and not as farfetched as the “9 range” outlier of equities.

Why are Global Bonds retreating?

Global bonds are retreating because the FED and central banks around the globe are collectively posturing for a simultaneous reduction in stimulus measures, i.e. a QT policy replacing a QE policy that has been in place far too long.  Bond risk is a big concern and it is no coincidence that currency valuations are favoring the U.S. dollar.

Leave the Trend Watching to Us?

For those of you that would NOT like to do this on your own, leave the trend watching to us. Each day, we will be posting for Subscribers indicators and commentary that describes where the market trends are strong, where they are weakening and where they are flat our spiraling down.

Here’s the best part. Subscriber’s will be able to check back daily to see what’s changed, to see if that canary in the coal mine is gasping for air or flying like a dervish, and if a correction in portfolio allocation is signaled.

Trend Watch Takes the Uncertainty Out of Investing

Smart investing is about living, not trading; about knowledge, not fear. That’s why we do the heavy lifting here at Signals Matter, why we signal trades, describe trends and even the probability of an outright recession in our Iceberg Watch tool.  We manage the risk. All you do is pull the trigger, if you or your advisor are so inclined.

Who is Signals Matter?

We built Signals Matter because we know that almost no one outside of a professional investment platform has the time, interest or resources to select, combine and derive sophisticated trade Signals and market knowledge as we do from our wide, essential spectrum of technical and fundamental filters.

Simply Condensed

Yet we know as well that anyone, including you, can deploy these tools if properly and simply condensed to an unpretentious and user-friendly dashboard of Signals.

Join Us

To subscribe to Trend Watch (or to our Signals Watch and Recession Watch deliverables which keep an eye out for macro icebergs and opportunities ahead), visit our public Website which will go live in mid-November.

Thereafter, you can join our private community of investors eager to let their profits run, cut their losses short and generally navigate the choppy waters that lay ahead.

In the Meantime

Be sure to visit our interim Blog site at www.SignalsMatter.com for candid talk about where we are, how we got here, where we are likely going … and why.

SIGNALS MATTER, LLC IS NOT A PROFESSIONAL OR LISCENSED FINANCIAL OR TRADING ADVISOR. NO INFORMATION OR OPINION HEREIN CONSTITUTES A SOLICITATION OF THE PURCHASE OR SALE OF ANY SECURITY. AS ALWAYS, PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

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