Searching for a Market Low

Looking for a bottom in markets is always a blurry view of the present. As posted here in September, markets seemed to headed to a 20% to 25% correction but whatever the ultimate low move, that low occurring in the first quarter of 2016. The sideways to higher move off the lows would then be tested probably in August. A failure of that test would take the market to the unpleasant territory of a chance of producing a 50% correction from the May 2015 highs in the S&P 500. All markets have a 50% correction at some point in their life cycle. All markets.

BaseOp2.com has now moved over to CoverRisk.com. Both links get you there.

Loading Up Up Here

Recent pushes in GOOG and AMZN is clear evidence that loading up certain stocks is a soft spot for managers needing  help to click the buy button. These two stocks in particular, as many before them, have to stretch price to accommodate all comers.   GOOG oddly does not have extreme riskvalue problems but that does not mean it could not have a 150 dollar correction.  CoverRisk data says GOOG is better than AAPL but on a pure dollar down basis GOOG will decline more than AAPL,   it is just that more owners of AAPL will be underwater than GOOG.

IBM has cleared the worst of the riskvalue issues and has the best relative outlook.

GOOG or AAPL

With one week to go, AAPL is a bit lower to unchanged on the year with GOOG up $224 per share or about 42%.  So it would seem GOOG may be more extended but it is still AAPL carrying the over value based on the algorithmic scoring data calculating the QRiskValue from 2008 to present.    

Markets Slide

Markets continue to slide as the retracement of the bull run evolves and the 2008 trading pattern takes hold.  October will be the battle ground to determine if equities accelerate towards a low correction bottom in the first quarter of 2016, or are able to stabilize within the -20% to -25% pull back zone.

Fed Basically Admits It Is Afraid To Stop

Fed action basically admits it is harder to sustain any asset value now and will need negative interest rates to keep the economy afloat. The greatest bubble in modern times may have gotten new life as Yellen cannot stop the life line to equities.  Keeping it all in the air may be difficult as there is little the Fed can do to cure a panic.  

Fed Day

Whether the markets explode higher, crashes lower, or just lays an egg in the next few hours, alternative strategist should have already banked more than enough return this year to easily handle any volatility.   Buy side investment bias is the trading opportunity gift which keeps on giving and is based on bizarre notions of market efficiency and macro trend expertise.  Successful alternative strategies execute a in probability game where positive outcomes are not dependent on a bull market or a Fed which has helped float an industry based on a faulty decision bias.

September Rate Hike and Government Shutdown

September, the month where the Fed raises interest rates and the markets get a government shutdown.
So if neither happen the markets still have to deal with trading and investment fatigue where there is more downside than upside for the first time in six years.  A 14.2% break in the S&P500 since May of this year leaves plenty of room for more down.  A minimum  20% correction is indicated by decision models.

Market Bears Still Have The Edge

Fed should raise rates this week as it will make no difference whatsoever to the world economic order.  Markets do not need anymore protection than they receive everyday from sovereigns and normal central bank interventions.  China is a fraud but what's new.  It is an overplayed card.  Markets could withstand another eight to fifteen percent break just on normal retracement action.  We still have the 2008 downside pattern intact which would lead to a terrible October.  

How Eight Stocks Are Doing YTD

	AAPL	BAC	GOOG	GS	IBM	MSFT	F	PFE
Shares	181	1118	38	103	125	431	1290	642
on20000	-29	-2418	2985	-1000	-2062	-1856	-2284	398	-6266
									-3.92%