2019 just ended with the S&P500 up a whopping 29%! The best year since 2013. This has certainly been one of our best years since we started trading the stock market, we hope it has been profitable for you as well, it has been a good year to all subscribers following AlphaOverBeta trade alerts and stock picks.
We are summarizing another profitable year and would like to share some of our insights from last years equity and options trading, what are the forces that moved the market in 2019? which of them will stay and get stronger? which would probably weaken and disappear over the coming year? All the information is in this summary report.
If you would like the full report, send your email to info@alphaoverbeta.net and we would be happy to share the full insight trading report of 2019 and forecast of 2020.
So without further ado, here they are- 2019 trends that will definitely affect 2020 as well:
- President Donald Trump – This man in the oval office is the #1 force that moved the market in 2019 and would likely do so in 2020 including the period before the election in November. He holds the monopoly on the trade wars with china which, on a personal note I think he fights just to prove 2 points-one is that he can …and the other is that this is his way of controlling the markets when he tweets “Jump”, the market asks “how high?”. He, as president, has a high interest in pushing the markets to new highs so he can point and take credit, in addition, he is considered as a positive factor in business circles promoting the markets to move ahead even further, this means that a passive investment in the S&P500, DOW or the NASDAQ through the first and second quarters should be fairly safe, as we get close to November things are going to get volatile and unpredictable, but the first two quarters should continue the trend we have seen so far. Getting close to November it’s going to be dependent on the rhetoric and the polls, we suggest to stay away from the markets in the weeks surrounding the elections as things are not going to be as predictable as they are in the rest of the year, staying away means half of the usual position size and tighter stops, pay close attention to the VIX as an indicator, this is a very reliable indicator for fear in the market, in case it crosses the 20-25 levels, this really means high volatility that is not favorable for equity traders.
We have developed a trading strategy that follows Trump’s tweets then decide whether to buy or sell the S&P500 which is really beneficial to us, in case you would like to see it results or receive alerts every time there should be a trade, contact us here - Technology – the technology sector is responsible for a great part of the run-up in 2019, tech companies like Googe, Apple, and Facebook made major technological moves of which we will mention :
- Customized video streaming – Invented by Netflix, but will likely continue with Apple, Disney as they are closing the gap very quickly, this is just the beginning of this service which is going to change TV as we know it.
- Automation and robotics – not always in the media headlines this area is growing fast with companies like Boston Scientific leading it providing goods and services consumed by medical, defense and transportation companies.
- Blockchain and cryptocurrency – probably deserves a post of its own, cryptocurrency is changing the way countries are doing business, it’s here to stay and once regulated will appreciate in value and reduce its inborn volatility.
- The fed– which we will discuss in our next article
- Traders complacency – which we will discuss in our next article
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Trade Safely,
Alon