Markets are Moving Ever Faster - Are You Keeping Up?
One of the keys to long-term success in the business of investing is to understand that markets change over time. And as almost anyone can attest, market trends are now happening faster and going farther than ever before!
While we do not believe that investors need to quit their jobs and become day-traders, we DO strongly believe that shorter-term strategies are needed today - with at least a portion of your overall investment portfolio.
To this end, we introduce the Short-Term Market Manager Service.
About the Short-Term Market Manager Service
As the name implies, the Short-Term Market Manager (STMM) is a service designed to help investors navigate the short-term trends (defined as 1-3 weeks) of the overall stock market, using easy-to-trade ETF's.
In order to ensure that we stay on the right side of the short-term trend as much as humanly possible, the STMM service incorporates a multiple strategy approach to trading the stock market. In short, we've combined three of our favorite short-term trading methods into one, easy-to-use, service.
The Short-Term Market Manager Service utilizes three trading strategies and allocates them as follows:
- 50% Short-Term Trend-Following System: State's proprietary short-term trading system based only on the price action of the market indices.
- 25% Short-Term Model-of-Models System: A series of models designed to tell us whether the bulls or bears have the advantage in the near-term market environment.
- 25% Manager Discretion: Yep, we incorporate the experience of our managers and let them "trade" as they see fit with a portion of the portfolio.
We believe this combination allows us the flexibility needed to deal with the short-term nature of market trends and also the ability to adapt changing market environments "on the fly."
To sum up, the Short-Term Market Manager Service will provide subscribers with every detail of how we manage our way through good, bad, and sideways market environments. Every time we make an adjustment, we will send a trade alert via our lightning fast, "Live Blog" (which also triggers email alerts, so that you don’t have to stay by your computer all day). Therefore, you will always know exactly what we’re doing and why.
Sign Up for the Short-Term Market Manager Today!
The Management Strategy Explained
Here’s how it works. We have constructed a model containing 10 of our favorite market models/indicators – each of which is successful in its own rite. We calculate the results of each model each day (usually many times during the trading day). The "message" from these models gives us the overall "tone" of the market. In short, this becomes our "guide" to exposure and directional trading. For example, if the model suggests an exposure over 50%, we will "lean" toward the long side of the market in our trading.
From there, we look to our short-term "market triggers" to tell us when a trend change is occurring. There are three different "triggers" that we employ to help us with the timing of our buying and selling.
An overriding principle of the service is that instead of "bombing" in and out of positions with our entire account all at once, we employ a discretionary, graduated approach and use market volatility to our advantage.
For example, let’s say the market gaps open by 2% and gives us a buy signal. Instead of blindly jumping in at the open, we will note the signal and begin to "work" the trade. This means that we will likely establish a "starter position" and then use any pullbacks over the next few hours/days to build a position. The key here is we employ "discretion" as to when to add to and/or subtract positions. We may add intraday on a pullback. Or we may even decide that the market has "gotten away from us" and that it is best to wait for better pricing.
Next, we should point out that the use of leverage (via 2x or 3x ETFs) is also a "discretionary" decision. We may decide to use "leveraged" ETFs such as the ProShares Ultra S&P 500 (SSO), which attempts to provide twice the return of the S&P 500 or the ProShares UltraPro S&P 500 (UPRO), which attempts to provide three times the return of the S&P 500 in positive environments.
Or, if we deem the conditions to be "iffy" we may decide to forego the use of leverage and keep our beta and overall risk levels down.
Finally, the decision of whether or not to use the short side of the market (including the question of whether to incorporate leverage on the trade) is also a discretionary one. But it is important to recognize that there are times – especially during the beginning of new bull markets – that playing the short side can be difficult. And if we deem this type of environment to be in place, we may opt to move to a neutral or cash position on sell signals instead of putting a short trade on. In short, we will use our experience to determine when the odds of a successful short sale are on our side.
Short-Term Performance
Before we ever go "live" with the trading strategy, we insist that the system be thoroughly tested - preferably in good markets, bad markets and everything in between. So, before we introduced our STMM Service, we tested the components of the system. Although no backtest is ever perfect (far from it!), what we're looking for is an indication of how the system could perform in different conditions. Based on the numbers below, we feel the system has impressive potential and we thought you might enjoy seeing the results.
Below is a summary of the system test results for the Short-Term Trend-Following and Model-of-Models components of the service. (Note that the "Manager Discretion" portion of the portfolio (25%) cannot be objectively tested.)
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Please note that the hypothetical test results shown above do not represent actual trading and that actual results may vary. However, the test does provide us with an indication of what we might be able to expect in varying market environments such as a bull market, a bear market, and that annoying "in between" type of environment. Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.
What You Receive
Before anyone becomes a member of our service, we feel it is important for them to understand exactly what they will be getting from us. So here's a summary of the reports you will begin receiving once you've signed up for a free-trial:
- Action (Buy or Sell)
- Security Name
- Ticker Symbol
- Position Size
Real-Time Trade Alerts - We send a real-time ALERT! via our "Live Blog" (which also produces an email alert) BEFORE every trade we make. These live reports tell members EXACTLY what we are about to do and why we are doing it. And to avoid any conflicts, it is our policy to wait until after we have received the ALERT to actually enter our trades. Each ALERT! includes:
Daily State of the Markets - As a STMM subscriber you'll receive our "Daily State of the Markets" market analysis and commentary each morning BEFORE the opening bell.
Flash Headline Alerts - We sift through the breaking news and report only on the important, market-moving headlines.
We Publish Performance
At StateoftheMarkets.com, we believe that performance is job # 1. And unlike so many newsletter services out there, we don't hide our performance. The Short-Term Market Manager Service will provide updated performance on the website after the close of business each trading day.
To sum up, we do all the legwork, we you EXACTLY what we are about to do and why, and then we follow it up with a performance summary every single day.
Let's Talk Price
The Short-Term Market Manager Service is a "pro level" market management system that can easily replace your broker and those mutual funds in your portfolio. In short, we will help guide you through the maze of the market for just $109 a month (Annual and Quarterly plans with BIG savings are also available - use the Contact Us tab to ask for details.)
The analysis and information in this report and on our website is for informational purposes only. No part of the material presented in this report or on our websites is intended as an investment recommendation or investment advice. Neither the information nor any opinion expressed nor any Portfolio constitutes a solicitation to purchase or sell securities or any investment program. The opinions and forecasts expressed are those of the editors and may not actually come to pass. The opinions and viewpoints regarding the future of the markets should not be construed as recommendations of any specific security nor specific investment advice. Investors should always consult an investment professional before making any investment.
Any investment decisions must in all cases be made by the reader or by his or her investment adviser. Do NOT ever purchase any security without doing sufficient research. There is no guarantee that the investment objectives outlined will actually come to pass. All opinions expressed herein are subject to change without notice. Neither the editor, employees, nor any of their affiliates shall have any liability for any loss sustained by anyone who has relied on the information provided.
The analysis provided is based on both technical and fundamental research and is provided "as is" without warranty of any kind, either expressed or implied. Although the information contained is derived from sources which are believed to be reliable, they cannot be guaranteed.
The information contained in the service is provided by Ridge Publishing Co. Inc. (Ridge). One of the principals of Ridge, Mr. David Moenning, is also President and majority shareholder of Heritage Capital Management, Inc. (HCM) a Chicago-based money management firm. HCM is registered with the U.S. Securities and Exchange Commission as an investment adviser. HCM also serves as a sub-advisor to other investment advisory firms. Ridge is a publisher and has not registered as an investment adviser. Neither HCM nor Ridge is registered as a broker-dealer.
Employees and affiliates of HCM and Ridge may at times have positions in the securities referred to and may make purchases or sales of these securities while publications are in circulation. Editors will indicate whether they or HCM has a position in stocks or other securities mentioned in any publication. The disclosures will be accurate as of the time of publication and may change thereafter without notice.
The test results shown for the Short-Term Market Manager are based on a backtest of the Short-Term Trend-Following and Model-of-Models systems. The systems went long the S&P 500 when buy signals were given, to cash on neutral signals, and short the S&P 500 on sell signals.
The Short-Term Market Manager Service Models are model portfolios and do not represent actual trading. It should be noted that model results do not take into account payment of commissions or reinvestment of dividends, have inherent limitations, incorporates the benefit of hindsight in the development of the model, and are for informational purposes only.
Your actual results may differ from results reported for the model portfolio for many reasons, including, without limitation: (i) performance results for the model portfolio do not reflect trading commissions that you may or may not incur; (ii) performance results for the model portfolio do not account for the impact, if any, of certain market factors, such as lack of liquidity, that may affect your results; (iii) the securities chosen for the model portfolio may be volatile, and although the "purchase" or "sale" of a security in the model portfolio will not be made in the model portfolio until confirmation that the email alert has been sent to all subscribers, delivery delays and other factors may cause the price you obtain to differ substantially from the price at the time the alert was sent; and (iv) the prices of securities in the model portfolio at the point in time you begin subscribing to our service may be higher than such prices at the time such stocks or options were chosen for inclusion in the model portfolio.
The S&P 500 is a stock market index containing the stocks of 500 large-cap corporations, most of which are US companies. The index is the most notable of the many indices owned and maintained by Standard & Poor's, a division of McGraw-Hill. S&P 500 is used in reference not only to the index but also to the 500 companies that have their common stock included in the index. S&P 500 returns from 1980 through 2008 are "total return" and include the reinvestment of dividends. Investors cannot invest directly in the index.
Investments in equities carry an inherent element of risk including the potential for significant loss of principal. Past performance is not an indication of future results.
