The Market Veterans | Signals Matter

The Market Veterans

Experienced traders will immediately recognize the technical and fundamental analysis behind our weekly Market Signals. Our preliminary technical screening includes directional movement, Bollinger and Keltner bands, momentum and moving average analysis, pattern recognition, price divergence and convergence, rate of change, relative strength, sector rotation, support and resistance analysis, trading envelope development, volatility expansion & breakouts, trend analysis and many other indicators melded together
Experienced Trade Signals Matter
which help us weed through over a thousand securities to determine which securities and sectors are poised for outperformance on the long side or tilting toward underperformance for our short book/pics.
Sectors Matter.
At Signals Matter, we premise our approach with the conviction that identifying the rising sectors is more important than just stock picking. In short, sectors matter to us.

Of course, identifying the best sectors is more than just a market view—it’s also a lot of weed work… We combine the foregoing tools along with other proprietary filters and an obvious dab of experience-based discretion to derive our conclusions as to the most opportune sectors for trading.

Those Good ‘Ol Fundamentals Too.

Only after these technical processes are complete, do we turn to asset-specific “stock picking.” That is, having technically identified the highest probabilities for sector success, we then look for the best individual names within those sectors. As you can guess, this is where our fundamental analysis kicks in.
That is, we put sector-specific companies through an additional layer of deep value analysis, scrutinizing their financials for intrinsic and book valuations and then assess earnings and price multiples therefrom. Our fundamental analysis includes, inter alia, a thorough screening of the usual and unusual suspects: asset turnover, current ratios, earnings quality and consistency, gross margins, net income, PE’s, outstanding share count etc.

Once the foregoing screening is complete, we post a weekly list of the securities we recommend, both long and short, along with trailing stop loss recommendations. We’ll also respond to any stock picks you are following with our own analysis.

If you’re an experienced trader with more than a cursory relationship with your Bloomberg terminal, you can appreciate the foregoing process, even if it differs from some of your own strategies or approaches. Traders, after all, love to debate, brag and question other traders.

We’re no different.

But the obvious question for market veterans considering Signals Matter is this: What’s in it for you?

We recognize that experienced traders tend to have (and rightfully trust) their own systems and styles, and we’re not here to undermine what works for you.

Let Us Be Your Virtual Analyst.

Instead, our aim is to act as a compliment to (rather than replacement of) your own trading approach.

Even the most active traders benefit from the carefully derived data points and market signals of other analysts. In many ways, Signals Matter is therefore like having your own private analyst –one who offers ideas yet doesn’t require a fat salary, lunch breaks or an annual bonus…

Our weekly Trend Watch, for example, provides you with a global heat map of the relative strength and weaknesses of global trends in equities, currencies, commodities, and credits. It includes succinct summaries and signals which you can employ to confirm or test your own signals, or perhaps inspire a new direction or idea within your own trading strategy. 

Iceberg Reminder.

Finally, even the most macro-agnostic traders or CTA-minded trend followers need to occasionally step back and consider the macro backdrop in which they are trading. Whether you are a bond cowboy doing cap structure arbitrage or a CTA selling vol with the VIX at basement levels and laughing (at least temporarily) all the way to the bank, it helps to take a peak outside your backwardation and contango charts to see what the macro tea leaves are suggesting.

That’s where our Recession Watch tool might be worth a deeper look.

We recognize that many traders scoff at the macro indicators, which are often years out of touch with the daily trades you are watching. But as many market veterans know, eventually the macros catch up with the micros…

We ourselves love to get deep into the weeds of specific trades and daily option signals regardless of (i.e. “agnostic” to) the big picture of global markets. But we deeply understand the macros, and occasionally must remind ourselves that obsessing over daily arbitrage opportunities or Treasury spreads can eventually feel as silly as obsessing over chicken vs. fish on the Titanic’s dinner menu rather than seeing the icebergs ahead…

Our Recession Watch is basically an objective, data-driven “iceberg watch” and a reminder of just how quickly things can turn from the sublime to the ridiculous. No one, as you know, can perfectly time a market correction, but our Recession Watch is pretty unique, and was built with the same mind-set of Noah and his ark.

That is: When did Noah build his Ark?

Before the rain.

Our Recession Watch has the same intent—to provide even the most experienced traders with a data-driven (rather than just philosophical) signal that conditions might be telling us to focus less on today’s trade and think more about the macro weather heading to a market correction near you. (And it might help with your short book as well…)

As for the meat on the Recession Watch’s bones, we look at a myriad of technical factors to which we do apply subjective weightings to derive net bearish, net bullish and net neutral percentages for each month. The factors we are filtering and weighing include the yield on the 10-Year, a CTA-level analysis of global money flows, changes in sovereign yield curves, geopolitical insights from trading contacts, EM conditions, gold pricing, proprietary credit spread indicators, debt to GDP temperatures etc. 

For each of the foregoing reasons, we hope you give Signals Matter some thought as a potential (and virtual) analyst on your own experienced team—even if it is simply a team of one.

We also invite you (and your experienced perspective) to comment on our public blogs and add your valued insight, criticism or perspective. We love to hear from other market veterans and appreciate your insights.

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We study mountains of complex market data that understandably bores normal folks and which conventional advisors either ignore or don’t grasp. We then distill hundreds of indicators into simple to understand active signals, clearly telling you which securities are safe to buy, sell, and how the overall market is trending.