Unchain Unchanged

The year has given both bulls and bears reason to hope given the volatile crossing back and forth over this year's unchanged line.  The 10 year at first continued its bull move but now has recovered as rates have risen slightly after two encouraging job reports. 

It is easy to be suspicious of any continued bull trend given the age of the stock rally. Just like all of last year, indicators from CoverRisk.com again show up as the trend, though there have been some sell side indications.

AAPL still remains the most overvalued stock but has consistently remained in the CoverRisk metric of least risk.  Yes, a stock can be over valued and have least risk bias based on day to day metrics.  However, when AAPL finally turns, it will go down and catch its tail, right now a 40% decline.  No stock ever escapes, just a matter of when.  Why won't matter but will probably be inaccurate. 

IBM Reported To Take Drastic Action

Well the stock defenders at IBM hope they have found a better way than stock buy backs to impact their stock; fire 26% of your workforce right now.  The stock has declined to a near fatal level that if continued would have confirmed a major bear downtrend according to CoverRisk.com data.  This action certainly seems a bit spooky and not what the job growth forecasters might have in mind, but we now live in the world of rapid scramble job elimination fostered by the Tech world.  Maybe great for stock prices, but bad if you want to eat.   

ECB Caves In On Stimulus

Takes a promise of one trillion euros from ECB to get SP500 index up and into positive territory for the year. Over valued stocks such as AAPL and critically ill ones such as IBM have struggled this year with share buy backs being their only friend.  Central bank subsidies are now the greatest generator of stock returns as a world wide broken economic systems need constant life support to delay economic downturn.   

IBM Confriming Death Dive For Other Stocks?

IBM again slaughtered.  Share buy backs will reappear to try to stem the over the cliff potential.  The implication for other stocks in the world where game decisions strategies play the most important part in determining stock price value, little to do with fundamentals,  is huge.  APPL, probably the most over valued stock in the world has a Qriskvalue of around 60.  Now players are not easily budged and it is still ranked according to CoverRisk.com on the lower end of risk scale based on current scoring, but that can change in one day. 

Stocks Down On Zero As A Future

Selling is appearing on a regular basis as oil prices and other suspects play on world deflationary fears.  Central Bank's support of asset prices are now battling bearish trading scenarios where the results of prolonged periods of zero rates may have only produced a pump and dump end game as the Fed's zero may come to mean the return target of many assets.   In a job eliminating Amazonian world dominating not only shop keepers but large traditional high paying trickle downers, the dark clouds of low growth are forming.  This is not just about oil it is about how economic interventions did so much for so few and has left it out of the pockets of almost everyone else. 

IBM Meltdown

IBM, despite massive stock buy backs by the company, continues to trend down trading below the CoverRisk price trend established in 2007 and 2008.  Moves lower from here would be a contagion to all stocks.

Wealth Management of Manglement

One of the most bearish charts out there is an advertizement from Personal Capital showing they now manage over one billion dollars in client funds.  An almost exponential leap in participation has them all giddy but the story is really about the set up that has been taking place for all those willing to manage their own wealth with ETF products.  Scary down may emerge despite the Fed and Treasury arsenal and then all will be exposed to the ugly side of personal wealth management. 

CoverRisk.com: The Passive Risk Boat Is Loaded

An article by MarketWatch, Vanguard sets record funds inflow,  shows the lazy habits of investors when it comes to choosing how to handle risk.  Traditional mutual funds such a Vanguard and the growing number of ETF wealth management sites have enlisted public participation into the vast ocean of passive waters.  Channeling these products while denouncing the active managers, the risk world has been made simple.    However, active managers are like lawyers, everyone hates them until you need one.   Once that sinking feeling hits the passive community and benchmarks plunge the race will be into the lifeboats and out of the water. 


  

2014 Ending So Are Trends

CoverRisk.com will start recalibrating trend data as this trading year comes to an end.  That goes for the risk rankings as well for AAPL, BAC, GOOG, GS, IBM, MSFT, F, PFE.  Trends have obviously been strong for the indexes as CoverRisk established long positions in February well under 2013 closing levels.

Valuations by various measures seem stretched and any selling that offsets closing year end marking could indicate January pressure.  The Fed will finally begin to raise rates in 2015 but at what pace is not known.  HFT operations will lean on downside volatility with potentially little resistance other than waning stock buy back programs.

Record S&P500 Close

S&P500 record close today.  Beating the indexes is especially hard the last couple of years and John Bogle followers believe they are proving that passive index investing cannot be beat.  But the truth be told, many of us design models which consistently beat passive indexes, including this year, even when considering the equities have been so heavily subsidized by the Fed and Treasury for at least the last 5 years.

IBM got a large dose of stock buy back today as it continues to teeter near critical price areas.  It remains number #1 in the risk ranking out of the Q8.