It gives me great pleasure to start 2017 with the usual award winning Annual Technical Outlook report from the guys. Of course none of of have a crystal ball but of all the thousands of reports I have read over the last few decades, including many very expensive mkt “expert” reports, I can say this report is consistently the most accurate template forecast of what is to follow.
A quick trading practice comment, if the guys are correct in their “boom bust’ analysis 2017 will be the year for the momentum traders. Low volatility and momentum has been a feature of this ‘recovery’ market over the years which has not provided for a highly profitable momentum based trading strat. (Hence many hedge funds have under performed index funds). But a large end cycle stage, especially in the run up to the distribution top, usually provides an extremely good momentum trading environment. Blow off tops are the time when the crowd enters, when weak participants chase price blindly. They are the moment of extreme greed and stupidity which for nimble leveraged price traders can yield huge rewards. Equally these moments cut both ways, if you are not tight on your stops, or carry too much risk for your comfort, then volatility can be hugely unkind to the unpracticed. So its likely a year we discover how good, or bad, we are!
I’m going to leave the detail to the guys here and make some annual tech comments on a separate update. Finally though i want to just add this quote from Soros.
“The financial markets generally are unpredictable. The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.” Soros on how his reflexivity principle affects the way he looks at markets.