Sunday, October 2, 2016

September 2016 - Market Recap

September was a volatile month for all asset classes, as it started with a sharp decline in Stocks, Bonds and Gold. We will discuss these assets below and will leverage this information for October forecasts.

However, need to highlight that last IPM turn window was scheduled for September 26th. Market has made a bottom on September 26th and it's possible that we will see a sharp rally in the next few weeks. We will share details on the IPM turn window in next couple of posts. We are already positioned in our aggressive IPM based strategy to take advantage of this date.


  • Since the start of September, Bonds experienced severe decline
  • Decline brought out the bears, as expectations of an impending FED rate hike increased
  • The decline was so severe that at one point, TLT has decline -4.4% by mid month
  • This decline was followed by a sharp rally to near break-even levels for the month
  • In summary: A lot of volatility but no real action / direction, which is apparent from following chart


  • Stocks opened September slow but soon after the long weekend and on the heels of a strong jobs report took a nose dive


  • In contrast to Stocks and Bonds, Gold started with a sharp rally. However that rally fizzled out
  • Since then, Gold has been going sideways. There are two options for the Gold in the month of October:
    1. Gold and precious metal complex has already bottomed and will soon rally to new highs
    2. Gold has traced out a triangle and will decline in October, to mark a bottom
  • Both of the above scenarios suggest that the metal will be higher in future months. The question is whether it will take a detour to lower prices before rallying


  • Consolidation is the name of the game
  • Overall SP500 gained +0.02 %, Bond lost -1.7% and Gold gained 0.7%
  • We will soon see a well-defined trend but volatility might continue till Presidential elections in November.

Upcoming Blog posts:

  1. Strategy Performance - September recap
  2. Forecasts for October
    • Stocks - Elliott Wave and IPM Model
    • Bonds - Structure and relationship with stocks
    • Gold - Long-term targets and patterns
  3. Performance of Options strategy based on IPM Model

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