Stock Trader s Almanac 2016 Market Update

Transcription

1 Stock Trader s Almanac 2016 Market Update Jeffrey A. Hirsch CEO: Hirsch Holdings Editor-in-Chief: Stock Trader s Almanac Investment Committee Consultant: Probabilities Fund Mgmt. LLC Webcast Wednesday, February 10, pm ET

2 Disclaimer FOR INFORMATION PURPOSES ONLY This presentation has been prepared solely for informational purposes, and is not an offer to buy, nor sell or a solicitation of an offer to buy or sell any security, product, service or investment. The opinions expressed herein do not constitute investment advice and independent advice should be sought where appropriate. All information and opinions expressed herein are current as of publication and are subject to change without notice. Investing involves substantial risk. Neither Mr. Hirsch, nor any of his respective affiliates, employees and/or associates makes any guarantee or other promise as to any results that may be obtained from using this information. The advice and strategies contained herein may not be suitable for every situation. While past performance may be analyzed in this presentation, past performance should not be considered indicative of future performance. No one should make any investment decision based on this information without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing the prospectus and other public filings of the issuer. Neither Mr. Hirsch, nor any of his respective affiliates, employees and/or associates makes any representations or warranties with respect to the accuracy or completeness of the contents of the information herein and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. Neither Mr. Hirsch, nor any of his respective affiliates, employees and/or associates shall be liable for damages arising herefrom. No warranty is or may be construed to be created or extended by informational, sales or promotional materials. 2

3 50 Years of Research 3

4 June 1980 Super Boom T-Shirt 4

5 Wall $treet Week April

6 25 Years on The Street 6

7 Financial Media Contributor 7

8 Almanac Investing Philosophy Those who study market history are bound to profit from it! But Use history as a guide, not gospel. Sam Stovall 8

9 Almanac Research Process 50 Years Analyzing, Researching & Testing Every Stock Market Trend Imaginable Publish Findings On An Annual Basis Update Weekly & Monthly Construct Portfolios 9

10 Almanac Investing Process Cycles, Seasonality & Recurring Patterns Current Trends & Economy Monetary and Government Policy Market Internals & Sentiment Fundamentals & Technical Analysis 10

11 Major Investment Cycles War & Peace and the Markets Secular Bull & Bear Markets Decennial Cycle 5 th Year Best Gains, Year Presidential Election/Stock Market Cycle 2-Term Presidents Different Seasonal Cycles Best Six Months November-April Sectors & Commodities Quarterly, Monthly, Weekly, Daily, Intraday January Indicators 11

12 2015 Forecast Recap Expected usual 50% move from the midterm low to the pre-election year high to be below average in the 20-30% range as Fed rates hikes loom large. Toward the later part of 2015 the economy is prone to slowing as Republicans and Democrats begin the next battle for the White House. Expected a high most likely in the first half of 2015 around Dow 19000, S&P 2250 and NASDAQ 5000, slightly higher or lower than NASDAQ s all-time high. Then a move sideways to slightly higher throughout the last half of 2015 with an ultimate high near yearend Made new highs on all the major averages, clearing 5000 on NASDAQ But DJIA and S&P 500 came up a bit short of our forecast at and 2131 respectively. Dow was up 19% from its 2014 midterm year low to its 2015 high S&P 22%. The economy is arguably slowing and the battle for the White House raging. So all in all, not perfect, but not too shabby. 12

13 st Losing DJIA Pre-Election Year Since

14 If the market does not rally, as it should during bullish seasonal periods, it is a sign that other forces are stronger and that when the seasonal period ends those forces will really have their say. Edson Gould (Stock market analyst, Findings & Forecasts, ) 14

15 Bad Best Six Months Switching NOT Good 15

16 Market Expected The Fed To Cut Back To Zero? 16

17 BETTER WATCH OUT! Santa Claus Should Fail to Call S&P 500 % Change Last 5 Days Of Year + 1st 2 New Year Santa Rally Year % 1.5% Flat % 34.1% % 20.3% % 31.0% % 26.7% % 19.5% % 10.1% Bear % 13.0% % 23.4% % 26.4% % 9.0% % 3.0% Flat % 13.6% % 3.5% % 38.5% Bear % 23.5% % 12.8% % 0.003% % 13.4% % 29.6% % 11.4% % 0.7% Flat 17

18 January Indicator Trifecta 18

19 Presidential Term 8 th Year Why 16 Could Be Lousy 19

20 Dow Theory Sell Signal Transports Not Confirm 20

21 The Pros & Cons of Forecasting Pros Seasonal BSM Holding August Support? Election Year January Has Chance Cons Fed Tightening 1 st Down Pre-Election DJIA Since th Year of Term Descending Flag Busted Tepid Econ Dow Theory Sell Dec Low Violated No Santa NDR Bear China, Oil, Iran, BRICs, etc. 21

22 Current Sector ETFs 22

23 Small CapStock Portfolio 23

24 Mid Caps & Large Caps 24

25 Seasonal Support for a Tradable Crude Oil Bottom 25

26 2016 Outlook & Forecast 26

27 Four Horsemen of the Economy & Housing Dow Jones Industrials Unemployment Rate Inflation Consumer Confidence Existing Home Sales Housing Starts New Home Sales NAHB-HMI 27

28 Unemployment 28

29 Inflation 29

30 Consumer Confidence 30

31 Existing Home Sales 31

32 Housing Starts 32

33 New Home Sales 33

34 NAHB-Housing Market Index 34

35 Pulse of the Market 35

36 Down January Down February Copyright by Jeffrey A. Hirsch and Hirsch Holdings Inc. 36

37 February Outlook Weak Link in Best Six Months Up Little Better Than 50/50 Marginal Gains Large Caps Small Caps Better R2K 1.3% But No Jan Effect This Year Down January = Down February Except Last 3 Expiration Week Spotty Long-term Record, Week After Has A Clear Negative Bias Losses Past 26 Years Presidents Day Lone Holiday Weak Day Before And After Friday Before Exceptionally Treacherous Declines Persist 3 Trading Days After Since 1980 Copyright by Jeffrey A. Hirsch and Hirsch Holdings Inc. 37

38 2016 Forecast Less Than Sanguine 2016 STA June 2, 2015, Page 6 Outlook Election years average DJIA 4.8%, 8th years, average -13.9%, down 5 of the last 6. So we see two scenarios for 2016: If Fed is right and energy and commodities decline transitory & prices stabilize, expect average election year gains in mid-single digits. If Fed is wrong and oil and commodities suffer further &junk bond scenario unravels we may begin a mild bear market. Reassess end January Next bear market may begin in 2016 or already be underway and could take the market 20-30% lower into in the last cyclical, garden-variety bear market that finally puts an end to this secular bear that began in early We do not expect much upside over the next few years in the market. After next bear market our Super Boom forecast kicks in. Raised the floor on our initial forecast, but the 500+% move to Dow by 2025 is still on target. 38

39 Secular Markets & 500% Gains 39

40 Next Super Boom Year Projection Dow Jones Industrials Copyright Jeffrey A. Hirsch & StockTradersAlmanac.com. All Rights Reserved DJIA Up 500% US Withdraws from Afghanistan Inflation Levels Off Actual DJIA /31/2015 April 2011 Forecast Jan 2014 Updated Forecast Jul 2014 Updated Forecast Mar 2015 Updated Forecast Sideways Market Launching Pad While Inflation Rises Super Boom Begins

41 Leveraging the Probabilities DIY Stock Trader s Almanac StockTradersAlmanac.com Bi-weekly Research, Analysis, Signals & Alerts Stocks & ETFs: Includes Annual Stock Trader s Almanac 20% OFF 1-Year PROMO CODE: MTA16 Probabilities Fund Management Investment Committee Member Uses My Research Implementing Strategies Probabilities Fund Long/Short Equity Fund (PROTX) 2015: Tactical Long/Short US Equity & Sector Rotation New Probabilities Almanac Trader Stock Fund 41

42 ProbabilitiesFundManagement.com 42

43 Upcoming Events February 16 Dallas Association for Technical Analysis (AfTA) February NYC Traders Expo February 25 Boston AAII Special Interest Group March 3-5 World MoneyShow Disney March 8 Palm Beach Traders March 9 Southeast FLA IBD Meetup Available For: Conference Keynotes Trading Workshops Investment Club Meetings Client Events 43

44 Thank You! Jeffrey A. Hirsch is CEO of Hirsch Holdings, Editor-in-Chief of the Stock Trader s Almanac & Almanac Investor enewsletter, and an Investment Committee Member at Probabilities Fund Management, LLC. He is the author of Super Boom: Why the Dow Will Hit 38,820 and How You Can Profit From It and The Little Book of Stock Market Cycles. The Data-Rich & Data-Driven 50-Year Market Cycle Analysis of Stock Trader's Almanac is the only investment tool of its kind that helps traders and investors forecast market trends with accuracy and confidence. Please visit DISCLAIMER: FOR INFORMATION PURPOSES ONLY This presentation has been prepared solely for informational purposes, and is not an offer to buy, nor sell or a solicitation of an offer to buy or sell any security, product, service or investment. The opinions expressed herein do not constitute investment advice and independent advice should be sought where appropriate. All information and opinions expressed herein are current as of publication and are subject to change without notice. Investing involves substantial risk. Neither Mr. Hirsch, nor any of his respective affiliates, employees and/or associates makes any guarantee or other promise as to any results that may be obtained from using this information. The advice and strategies contained herein may not be suitable for every situation. While past performance may be analyzed in this presentation, past performance should not be considered indicative of future performance. No one should make any investment decision based on this information without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing the prospectus and other public filings of the issuer. Neither Mr. Hirsch, nor any of his respective affiliates, employees and/or associates makes any representations or warranties with respect to the accuracy or completeness of the contents of the information herein and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. Neither Mr. Hirsch, nor any of his respective affiliates, employees and/or associates shall be liable for damages arising herefrom. No warranty is or may be construed to be created or extended by informational, sales or promotional materials. 44