Emerging Market Cyclicality

Markets move in cycles.  Emerging Markets are not only cyclical but also extremely volatile.  Peak-to-trough swings of more than 30% are common. Cycles don’t repeat themselves, but they do rhyme. As commodity prices were collapsing in 2015-2016, Emerging Markets bottomed in February 2016.  Pundits hysterically predicted that it would take a decade for extraction basedContinue reading “Emerging Market Cyclicality”

Volatility is back: watch the averages & RELAX

The Trade War saga continues.  Markets are turbulent this week as China reneges on previous negotiation terms and Trump fires off feisty tweets How to handle the volatility? Watch the moving averages. a.  S&P500 is about 1.5% away from breaking its 50 day moving average (dma). The fair value level is around its 100 orContinue reading “Volatility is back: watch the averages & RELAX”

Pruned Paired Trades

Today I made significant changes to 20% of the model portfolio.  Paired trades (winners & losers) were sold in an effort to mitigate further risk and harvest some long term capital gains. The liquidation was spurred by this week’s unexpected resignation of Intel’s CEO and also the revelation that Starbucks’ sales are decelerating in China.Continue reading “Pruned Paired Trades”