Tidal Shifts and Inflation Valves

It is not hard to look back and see that when central banks push money into the system, stocks rise and when they pull money out – they fall. In simple terms, the markets are an inflation valve overlaying a system of innovation. What has changed since December? The Federal Reserve has begun the process of raising rates and now the markets must re-balance based on current sources of innovation and monitor for new injections of currency.

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Successful Plan

The plan exited at one of the 3 reward stages. Note returns and percentages are calculated based on the levels executed only.

What does this mean for the average investor?  We shift to an era of active investing.

In the first half of 2016, the markets must discover new opportunities of innovation; either through enhancements in productivity or reduction in labor or resources rather than the guaranteed money the central bank afforded us.  We are at an inflection point where genetics, nano-technology, artificial intelligence and big data are poised to change supply curves thought immovable, shift demographics to redefine sectors and create opportunity on a scale never imagined from connecting us all together but these technologies take time to scale.

This provides the uncertainty that markets thrive on.

Needless to say, the green channel provides the highest probability but caution is advised until the red channel is broken.



  Price Shares Cost Returns R/R
Blue Channel
Buy $187.00
$1,683.00  
Reward $197.01 $1,773.09 $90.09
Risk $174.15 $1,567.35 ($115.65)
Cancel $192.50    
 
Green Channel
Buy $174.15
$5,398.65  
Reward $198.66 $6,158.46 $759.81
Risk $169.72 $5,261.32 ($137.33)
Even $177.04      
 
1st Trade exit @ reward target $104.94  
Total Reward from all applicable channels $864.75  
Total Risk from all applicable channels ($292.85)  
 
Black Channel
Buy $169.72
$2,715.52  
Reward $197.08 $3,153.28 $437.76
Risk $157.42 $2,518.72 ($196.80)
Even $174.95      
 
1st Trade exit @ reward target $90.72  
2nd Trade exit @ reward target $710.83  
Total Reward from all applicable channels $1,239.31  
Total Risk from all applicable channels ($981.65)  
Blue Channel

1:1.28
reward : risk
level reached 60.42%
Green Channel

5.53:1
reward : risk
level reached 38.16%
Black Channel

2.22:1
reward : risk
level reached 20.14%

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