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.

How Does 2014 Compare To 1987 And 2007?

ISM Provides A Reference Point

In 2007 and 2008, the average reading of the Institute for Supply Management’s (ISM) manufacturing purchasing managers index (PMI) was 48.4; the median reading was 49.9. A PMI reading above 50 indicates that the manufacturing economy is generally expanding; below 50 it is generally contracting. How does ISM’s PMI look today? Monday’s reading came in at 58.7 or much better than 2007-2008.

How Does The Bigger Picture Compare?

This week’s stock market video compares 1987 and 2007 to the present day, allowing us to better understand the odds of a serious and rapid decline in equity prices.

After you click play, use the button in the lower-right corner of the video player to view in full-screen mode. Hit Esc to exit full-screen mode.

Investment Implications – The Weight Of The Evidence

Since the hard evidence (technicals and fundamentals) remain favorable, we made no changes to our allocation mix of equities (NYSEARCA:SPY) and bonds (NYSEARCA:TLT) Monday. Should weakness continue, the S&P 500 has possible support near 2040, 2020, and 2011.

Buyers may surface in technology if the NASDAQ (NASDAQ:QQQ) falls back between 4566 and 4610.

If the facts call for a reduction in risk later this week, we will not hesitate to take action. For now, on our time frame, the last two days fall under the “normal volatility” category.

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