A Wild(er) Ride: Part Deux

Last week we identified a few of the reasons that we believe volatility was rising and we did our best to prepare you for a continuing “wild ride”. We witnessed all the things we wrote about to accelerate this past week and the ride from two weeks ago looked mild to this past week. Considering the new stimulus package finally got passed, fasten your seatbelts!

Did the buyers believe we had reached a point of good value or was it a dead cat bounce (a big up day after an oversold correction)? Only time will tell, but at Market Gauge, we stick to our very tight discipline and risk-averse investment process. We now sit mostly in cash across the board on our investment strategies although a few (IWM and Complete ETF) are invested in the remaining pockets of strength.

I remember when I was young having the experience on a roller coaster and how intense that first downhill felt. It seemed to never end, even though it was a mere second while my stomach felt like it was in my head. I took a deep breath when we hit bottom and started to accelerate on the next uphill which was conveniently placed to slow the descent, create the opposite effect to dropping and made the ride even more thrilling.

I remember then when that first gyration was over and it was time to enjoy the rest of the ride, I thought the remainder would not be as dramatic as that first hill down. To my amazement, we started going up a big hill slowly only to experience yet another drop down, which is the unique design of most coasters; they get you in complacency mode and drop you again.

My experience with the stock market is not very much different. It is why in our development we did so much work on momentum (TSI), moving averages (Triple Play/Relative Performance) and other technical indicators that “broadcast” what the underlying pinning’s of the market look like (Real Motion/Momentum).

Then we put these and other invaluable indicators into a platform called Big View that encapsulates all of the variables one needs to review in order to see why we are positioned the way we are and understand the Global Macro picture  This is the uniqueness of the Market Gauge platform and we continue to work hard to look at any new data or iteration of existing inputs that could contribute, in some small way, for Market Gauge to help you make better decisions that will enhance performance with less risk and a more effortless and enjoyable investment experience.

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