I write my observations of trends and market conditions every day, though I only share some of them on ASYMMETRY® Observations. The advantage of writing observations as we see them is we can go back and read what we observed in real time.
The best “year in review” is to reread these observations in the order they were written to see how global directional trends and volatility expansions and contractions unfolded in real time. Reviewing our actual observations removes the hindsight bias we have today, looking back with perfect hindsight of what happened only after the fact.
It’s one thing to think back and write about what you observed over the past year, it’s another to revisit what you observed as you saw it. It’s even another to review what you actually did in response to what you observed.
Mark Twain’s mother once said:
“I only wish Mark had spent more time making money rather than just writing about it.”
I don’t take the time to share every observation I have because I am no Mark Twain. I am fully committed to doing it, not just writing about it. Writing about observations of directional trends and volatility is secondary to making tactical trading decisions and active risk management for me. I see no use in observing markets and writing about it if I do nothing about it.
The first observation I shared this year was on January 18th. The topic may sound familiar today. From there, I observed conditions to suggested we could have been seeing the final stages of a bull market, a trend change to a non-trending indecisive period, and a volatility expansion. If you want to understand what in the world is going on, I encourage you to read these observations and think about how it all played out over the year.
All Eyes are Now on the Potential Government Shutdown
In remembrance of euphoria: Whatever happened to Stuart and Mr. P?
In the final stages of a bull market
Asset Class Returns are Driven by Sector Exposure
Stock Market Analysis of the S&P 500
Stock market indexes lost some buying enthusiasm for the day
The most important rule of trading is to play great defense, not great offense.
Selling pressure overcomes buying demand for the second day in U.S. stock market
February Global Market Trends
Selling pressure overwhelms buying demand for stocks for the third day in a row
Buying demand dominated selling pressure in the stock market
Stock pickers market? Sector rotation with stocks for asymmetric reward to risk
Investment management can take many years of cycles and regimes to understand an edge.
Asymmetric force direction and size determines trend
Asymmetric force was with the buyers
My Introduction to Trend Following
When I apply different trend systems to ETFs
The enthusiasm to sell overwhelmed the desire to buy March 19, 2018
Apparently there was more enthusiasm to sell
What’s going to happen next?
What’s going to happen next? continued
Is this correction and volatility normal?
Global Market Trends
Is the economy, stupid?
Growth Stocks have Stronger Momentum than Value in 2018
Sector Trends are Driving Equity Returns
Trend Analysis of the Stock Market
Trend of the International Stock Market
Interest Rate Trend and Rate Sensitive Sector Stocks
Expected Volatility Stays Elevated in 2018
Sector ETF Changes: Indexes aren’t so passive
Commodities are trending with better momentum than stocks
Investor sentiment gets more bearish
Is it a stock pickers market?
2nd Quarter 2018 Global Investment Markets Review
Global Stock and Bond Market Trends 2Q 2018
Stock market investor optimism rises above historical average
Trend following applied to stocks
Asymmetry of Loss: Why Manage Risk?
Earnings season is tricky for momentum growth stocks
Front-running S&P 500 Resistance
The week in review shows some shifts
Global Market ETF Trends
Global Market Trends, U.S. Dollar, Emerging Markets, Commodities, and Their Changing Correlations
The Big Picture Stock and Bond Market Valuation and Outlook
The U.S. stock market was strong in August, but…
Emerging Markets Reached a Bear Market Level, or is it a Continuation of a Secular Bear Market?
What trends are driving emerging markets into a bear market?
VIX level shows market’s expectation of future volatility
Rising Interest Rate Impact on Real Estate and Home Construction
The Trend in Interest Rates and the Impact on the Economy and Stock Market
Stanley Druckenmiller on his use of Technical Analysis and Instinct
Here comes the volatility expansion
Intermarket trends change over the past two weeks
The volatility expansion continues like tropical storm Michael that could become a hurricane
Divergence in Global Asset Allocation
The Stock Market Trend
U. S. Sector Trends
Observations of the stock market decline and volatility expansion
The stock market trends up with momentum
Observations of the stock market downtrend
The stock market is swinging its way to an inflection point
Divergence in the Advance-Decline Line May be Bullish
Pattern Recognition: Is the S&P 500 Forming a Head and Shoulders Bottom?
Momentum stocks need to find some buying interest
Will the stock market hold the line?
The Death Cross on the S&P 500
Stock Market Observations
What’s going to happen next for the stock market?
Global asset allocation takes a beating in 2018
The stock market has reached a short-term extreme as investor sentiment indicates fear
An exhaustive analysis of the U.S. stock market
An exhaustive stock market analysis… continued
Keep in mind, even if I see what could be the final stages of a bull market unfold, it doesn’t mean I try to just exit near the stock market peak and sit in cash for years. For me, it isn’t a simple ON/OFF switch. The highlight of my performance history has probably been my execution through bear markets. I’ve historically operated through them by being a tactical risk manager/risk taker, which means I increase and decrease exposure to the possibility of risk/reward with an objective of asymmetric risk/reward. I can’t assure anyone I’ll do as well in the future as I’ve done in the past, but I do know I’m even better prepared now than I was then. Being as prepared as possible and well-honed on situational awareness is the best I can do.
I’m looking forward to sharing more observations as we enter 2019 as global market conditions appear to be setting up for some trends to avoid, some to participate in, and some interesting trends to write about. To follow along, enter your email address on the top right of this website and follow me on Twitter.
HAPPY NEW YEAR!
Mike Shell is the Founder and Chief Investment Officer of Shell Capital Management, LLC, and the portfolio manager of ASYMMETRY® Global Tactical.
The observations shared on this website are for general information only and are not specific advice, research, or buy or sell recommendations for any individual. Investing involves risk including the potential loss of principal an investor must be willing to bear. Past performance is no guarantee of future results. The presence of this website on the Internet shall in no direct or indirect way raise an implication that Shell Capital Management, LLC is offering to sell or soliciting to sell advisory services to residents of any state in which the firm is not registered as an investment advisor. Use of this website is subject to its terms and conditions.