A Comment -- General Comments From an Expert (A Commentary)

We are in a sweet spot in the oil market. Two countries are down 5 million barrels at present. The stocks are ridiculously cheap. Oil consumption is flat. Oil stocks are cheap if we get to 70+ oil.

Owning royalties is usually a pretty good way to participate. You don’t have the exposure of operating the companies. However you will need a good oil price. If you felt comfortable that the price of oil was going to rise in the winter then it is a good place to buy these companies.

Technical analysis when the market can turn on a tweet. Technical analysis is no match against the tweets. His research shows that when tweeting picks up, so does market volatility.

What are you seeing in the markets? Trade talks, increase in volatility. Bit more noise to come. He guesses another month or so of this chop. US and China have to figure out something, and then the market will rally for keeps and we'll see the last of this volatility.

Technical signals used for buy/sell? Uses 200-day moving average, as it indicates the big trend you want to worry about. Lower highs and lower lows are two trends that tell you the trend is dead for now.

Gold's doing well, base metals under pressure. Will this reverse if there's a trade deal? It could. One reason people buy gold is for currency protection against the US dollar. And the dollar could continue to be weak. Both gold and silver are overbought right now, so there could be good pullback opportunities. Timing is everything. Now is the time to own a little bit of gold or silver.

The logarithmic scale. Say you have a $100 stock, and it goes up $1. On a non-logarithmic scale, it goes up $1. But if you have a $5 stock, and it goes up $1, on a logarithmic scale it looks the same as the other one. It's more exaggerated on a non-log chart. Most technical analysts won't even look at a non-log chart.

CASH. His conservative platform is 17% cash. So he's done OK in this market. If the market goes up, cash will give you opportunities. But you probably don't want to pick a bottom now.

Yield curve inversion. A leading indicator. Average is 7 months before a recession. Bear it in mind, but don't panic yet.

Market Outlook He manages a tech portfolio of individual stocks, with a few key ETFs and some short holdings to balance things out. Right now they have 55% invested and 45% in cash. They are 135% short equity index. On up days they are slightly higher. On down days they are doing great. In 2018 the market had six mini-corrections between 5-10% and some in excess of 10%. He sees the same thing happening in 2019. The inverted yield curve will impact the amount of credit that banks will lend out. He bets a recession will occur by 2021. The ten year US yield is down to 1.5%. He feels the real estate industry is on the cusp of becoming digitized. PropTech and Disruptors are becoming game changers in the real estate space. It is creating new names and new players from a tech perspective in the real estate sector.

Defensive holdings or hold cash? It is better to have time in the market than to time the market. He would recommend holding a fund like his BlackSwan product. You need to set entry and exit levels and stick to them. It is okay to go to cash. We are in the later stages of this bull cycle. You will have opportunities to buy back in later. He overlays a short equity indices holding to give you the courage to stay long the market -- it acts as an insurance policy. Stay disciplined.

How to take advantage of a recession? There has been a great run in the market. He would buy into an alternative offering that allows the manager to be long or short or to get an active manager. You need to be disciplined on your entry and exit levels. His minimum to get into his fund is $50k. He could suggest two ETFs: IGV-T and FTN-N. He thinks it is dangerous to get into a long only ETF at this stage of the cycle.

It's been a funny summer. Earnings growth is merely okay. The China-US rift picked up after some tweets. The growth picture overall hasn't changed. It's been tough to manage money. He's been buying REITs and utilities--more defensive-as interest rates trend lower. Globally, rates are going negative. It's not a fun environment if you hold high-beta stocks, but fine if you invest safely. The inverted yield curve is still an accurate indicator of a future recession. The market is pricing in a cut, so if Powell doesn't deliver, then there will be serious volatility at the end of the year. Interesting times.

Market Outlook An extremely volatile month with an average 1% intraday move during the month. Sentiment Trader reported the average is only 10 occurrences a month for this type of volatility. The Trade War is not likely to be settled soon and it is exacerbated by comments from the US President, he feels. Market sentiment is so poor presently. We should not head for the hills. Don't make any drastic moves in your portfolio, especially if you hold good quality companies. Bonds are up 20% this year. If interest rates go up when things stabilize, this could become very volatile as well.

Lack of stock splits? Stock splits are really non-consequential. They really were seen as a way to bring back investors and to allow some into the Indices. You will see fewer and fewer, especially now that trading commissions are so low.