Strategies For Profiting In Downturns – Investing Strategy Notes And Trade Ideas for The Week Ahead – Second Week Of Jan 2016

Last week was, from the media’s perspective, the worst start to a new year since the New York Stock Exchange was created. A lot is being made of that in the media but let’s also keep the decline in perspective. It was a terrible week for the stock markets but there have been many weeks that have been far worse.

For weeks we have been expecting a decline in January. I had written for sometime that I thought it would be more toward the middle of January and I was expecting around 10%, for a full correction. The correction so far from the high of 2081.56 on Dec 29 to Friday’s intraday low of 1918.46 represents a 7.8% decline.

Part of the problem was that this year started off with two significant events that were already building last year. The first was definitely the collapse of oil prices which this week saw one of their worst weeks on record. The second was the decision by the Chinese authorities to devalue their currency further which led to selling on the Shanghai Composite Index which then led to the 7% end of day rule. Closing a stock exchange down after a 7% decline it turns out, may not be the best of ideas.

Federal Reserve December Rate Hike

I think what is also interesting about the present decline, is that this happened within a few weeks of the Federal Reserve raising interest rates for the first time since a zero interest rate policy was put into effect in 2008.  The rate hike in December has come at a time when much of the global community is experiencing feeble economic growth, oil is collapsing, many commodities prices are collapsing including base metals, and the larger derivative markets and so-called “junk” bonds markets are in turmoil.

Strategies For Profiting In Downturns

For the second week of January, the Week Ahead looks at a strategy I developed years ago to assist in continuing to generate income for my portfolio which building a “road map” of my stocks to assist in protecting my capital from loss. Corrections happen in bull markets but sometime they can become severe and other times they can signal the start of a bear market. The Week Ahead for this week is 3000 words in length and will require 9 pages if printed……. the rest of The Week Ahead article is for FullyInformed Members.

The Week Ahead – Second Week Of Jan 2016

Members can login directly through this link to read the investing strategy notes for the week ahead or they can sign in to the full members site here. Non-members can join here or read about the benefits of a membership.

1. Fresh Profits To Start Off 2016 – First Week Of January
2. Inflection Point – Third Week Of December
3. Statistical Week – Second Week of December
4. Welcome December- First Week of December

• Review Past Week Ahead Articles (listed recent to oldest)

Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.

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