Professional Traders Opinion 2.0, our market commentary, can be viewed at  http://protradersopinion.wordpress.com/

TLC Capital Group LLC
Accredited & Institutional Investors, Call: 404-816-6538

MARKET BEHAVIOR ANALYSIS

2016 MARKET
OUTLOOK



Future market psychology is ultimately driven by two simple human emotions:

  • Greed (bullish)
  • Fear (bearish)


Market Behavior Analysis draws heavily on the history of emotional response to market behavior from the past to predict future trends. In contrast, quant/black box strategies cannot anticipate the human psychology of market moves and because of rigidly defined mathematical models, may miss profits that could otherwise have been realized if a market move falls just short of a trigger point to buy or sell.















Coupling this information with basic technical and quantitative analysis allows TLC's CIO to initiate investment decisions for clients & investors to capitalize on momentum trends - both long and short - in equities and options. Risk control is also of paramount importance and enters into the CIO's decision-making process when deciding which instruments are best utilized to return maximum alpha and protect client assets.




By:  William J Taylor, CIO
TLC Capital Group LLC


Welcome to 2016, and with the first several weeks already behind us let's look ahead to what this new year might hold in store.


Who let the bears out? Not just any bears either. Not the cute cuddly little Panda bears but full grown Grizzles and Polar bears. So, to make my first 2016 market prediction......expect the first several weeks of this new year to be the worst EVER!!  Now that I am 1 for 1 so far this year let's take a look forward.


First I will make the same prediction as last year and also be one of the majority of pundits out there with the same 2016 vision;  Expect VOLATILITY!!!! This year will be volatility on steroids. With that initial "call" out of the way let me bring my 40+ years of experience into some 2016 thoughts:


Is this the bottom for oil/energy?  It's closer to the bottom now  in 2016 than 2015 or 2014 or..........a long time ago. Good place to "nibble" and acquire the best names for long term.


Is the seven year bull market over?  YES!


Will we have a bear market?  Duh, yes. Read above, or the news. Energy, transportation, retail already there. The others are going to catch up (or catch down).


Will the Fed continue to raise interest rates?  Not if the market continues to decline or we realize a recession has set in. Ten year treasuries will break down well under 2%.


The biggest surprise of the new year?  The speed and severity of the market's decline. After the Fed went to a zero interest policy and thus "encouraging" and "forcing" investors into riskier assets there will be liquidation of those same assets that have built up over the last several years. Expect severe downside movements.


What will be the second biggest surprise of the year?  A Trump/Sanders faceoff in the presidential election.  Who will win?  The television networks.


Will global emerging markets withstand financial strains?  NO! Look for and expect one or more significant defaults in the coming months which will cause  unexpected shock waves in the financial markets.
After digesting all that get ready for incredible trading opportunities. Investors need (NEED) to be hedged at all times, or at least more defensive. High dividend paying stocks with hedges on will be the very best idea of the year. Active traders will need to get lots of sleep and will be able to look forward to extreme markets swings. 


So, summing up, 2016 will be uncertain leading to higher (and spikes in) volatility. Be hedged.....fully hedged and expect the "unexpected". We are. Here is to a safe and prosperous 2016.

**** One final projection. The Powerball jackpot will reach $2 Billion in 2016. The winning numbers will be;  0  0  0  0  0  &  0.  Those number also coincide with the odds of all the above projections actually happening.