I use a few different risk management systems to help in determining when to reduce exposure to higher risk investments like stocks and high yield bonds. These take into consideration economic data, market data (i.e. bond spreads, market breadth, etc.) and technical charting for trend strength. Monday was the last day of October and the…
S&P 500: Early Warning Signals Beginning to Flash
Two of the best ways to track investor’s sentiment toward risk are to track the Volatility Index (VIX) relative to stocks and high yield bonds relative to stocks – and both have been flashing “warning” signs since early July. These are important to watch because stocks are usually the last asset class to react to…
Stocks Looking Shaky Again
This morning the European Central Bank announced they’ll be joining the fun and adding their own Quantitative Easing. The Euro currency, which had already been falling since early May, cratered on the news. This should be “good news” for stocks. European stocks rallied on the announcement and the US market seemed poised for a positive…