Chris Ciovacco

About the Author Chris Ciovacco

Chris Ciovacco is the founder and CEO of Ciovacco Capital Management (CCM), an independent money management firm serving individual investors nationwide. The thoroughly researched and backtested CCM Market Model answers these important questions: (1) How much should we allocate to risk assets?, (2) How much should we allocate to conservative assets?, (3) What are the most attractive risk assets?, and (4) What are the most attractive conservative assets? Chris is an expert in identifying the best ETFs from a wide variety of asset classes, including stocks, bonds, commodities, and precious metals. The CCM Market Model compares over 130 different ETFs to identify the most attractive risk-reward opportunities. Chris graduated summa cum laude from The Georgia Institute of Technology with a co-operative degree in Industrial and Systems Engineering. Prior to founding Ciovacco Capital Management in 1999, Mr. Ciovacco worked as a Financial Advisor for Morgan Stanley in Atlanta for five years earning a strong reputation for his independent research and high integrity. While at Georgia Tech, he gained valuable experience working as a co-op for IBM (1985-1990). During his time with Morgan Stanley, Chris received extensive training which included extended stays in NYC at the World Trade Center. His areas of expertise include technical analysis and market model development. CCM’s popular weekly technical analysis videos on YouTube have been viewed over 700,000 times. Chris’ years of experience and research led to the creation of the thoroughly backtested CCM Market Model, which serves as the foundation for the management of separate accounts for individuals and businesses.

Are Stocks Hinting At Bigger Problems?

The Fed Has Tried Both Sides

Last Thursday, the Federal Reserve did not raise interest rates. While the “no rate increase” scenario is typically favorable for stocks, the S&P 500 was unable to hold onto the post Fed statement gains. In fact, rather than rising after the Fed statement, the S&P 500 has seen a big drop in recent sessions (see chart below).

Let’s See How The Other Side Looks

In what appears to be a bit of a panic response from the Fed, after Friday’s big selloff in stocks, several Fed officials came forward making the case for increasing interest rates. Did the market cheer the Fed flip? No, the initial reaction was positive, but like last week, the gains were quickly given back (see below).

How Does The Bigger Picture Look?

While markets can begin to improve at any time, the facts we have in hand are not particularly encouraging for stock market bulls. This week’s video shows why stocks may be set up for another big leg down.

Have Things Improved This Week?

After Tuesday’s session, the S&P 500 was down 15 points this week, meaning it is difficult for improvement to occur on weekly charts. If we use the image below to compare the end of the 2011 correction and the 2009 bear market low to the present day, we can see the stock market bulls have some work to do.

If you want to get some insight into the three “looks” above, see Comparing 2015 To Past Market Bottoms

Improvement Can Begin At Anytime

2011 is an excellent example of a vulnerable market that began to improve quickly after a low was made. The charts looked ugly on October 3, 2011, but improved dramatically in the weeks that followed the October 4 intraday reversal. With Janet Yellen speaking Thursday, it is important for us to monitor the charts with a flexible, unbiased, and open mind.