- Rally to mid September then retest lows
- Pre – Holiday light volume trade
The market is following my script (up into mid-September then down into late November). This rally may trade to higher price levels than most expect, so look for at least 1,500 on the cash S&P, 13,700 on the Dow Jones and a double top high of 2060 on the NDX (Nasdaq 100). The hedge funds and large speculators have on a record short position and the rally could really take off if they need to begin covering.
Trading volume on this rally has been light, but that is typical of pre–holiday markets. I expect next week’s volume to pick up on rising prices and then, the following week, experience a reversal and hard and fast move down. A pattern I have observed in the past is for post holiday trading volume to pick up as price moves one direction. This gives everyone confidence in the new direction and then as everyone is feeling confident the market reverses.
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Posted by Michael Chapman at 12:00 PM UTC
- Risk managers will lead next 12 months performance
- Markets have Fed’s attention
- Opportunity at hand
Mahamed El-Enian, lead manager for the 34.9 billion Harvard Endowment fund, succinctly summed up the last 12 months’ returns and where returns will likely come from over the next year. In a statement heard this morning on CNBC he said, “Last years leading returns came from investing in illiquid investments and applying massive amounts of leverage. The next 12 months leading returns will come from those managers good at risk management.”
There has never been a better time to be with a firm, such as ours, whose focus is on risk management. We are constantly measuring the risk reward ratio of our asset allocation and we make adjustments accordingly.
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Posted by Michael Chapman at 12:00 PM UTC
- Stocks indexes oversold
- S&P erases gain for year
- Opportunity at hand
Stock indexes are reaching extreme oversold levels and will likely trade higher from the 12,800 DJI and the 1,400 S&P level.
As of tonight’s close, the S&P index is down for the year. The stock indexes are in a bull market correction and, while I expect a rally into the September 11th through 17th time period, I do not look for a final low until late October or early November.
According to H.S. Dent, www.hsdent.com, the current credit crisis differs from the 1998 experience. In 1998, stocks – based on the fed’s valuation model – were 20% overvalued, whereas today they are 32% undervalued. In 1998 we had a 19% drop in 45 days. It doesn’t seem likely that this correction will be as severe given the current valuation numbers.
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Posted by Michael Chapman at 2:51 PM UTC
As a current member or veteran of the U.S. armed forces, you may be entitled to a number of military benefits. The term benefits, as used here, includes military pay as well as other programs set up to improve the lives of military personnel. Because the scope of military benefits is enormous and ever-changing, this is intended only to be a broad overview of the subject. Service members and veterans seeking more specific information should consult the appropriate government source.
Who is eligible for military benefits?
Active duty service members are eligible to receive many benefits from the military including base pay, special duty pay, allowances for housing costs and food, money for education, medical care, insurance, and a variety of other benefits. Members of the armed forces are eligible to voluntarily separate or retire after serving in the military for a certain number of years. Retirees receive retirement pay and often have access to military facilities and programs, including medical care, insurance benefits, and VA housing loans. Service members who separate from the military may or may not receive separation pay and are eligible for limited, yet valuable benefits.
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Posted by Michael Chapman at 12:00 PM UTC
