Monday, June 5, 2017

Interview With Chaim Siegel Of Elazar


Has this been the least joyful bull market run in history? That's a fairly unquantifiable question, but Chaim Siegel of Elazar Advisors, LLC argues that at the very least, the bull market isn't getting any credit. The author of Pro Trader and a long-time analyst, Siegel says too many people are missing out on the climb, which means there's still fuel in the tank. We asked him how he's riding the volatile news flow in 2017 and how it might have repercussions in the market, among other things.
Seeking Alpha: 2017 has so far been a tale of two years - on the one hand there is the year of breathless coverage, a changing US Presidential administration, key elections in Europe, and a changing rate environment. On the other hand, not much has seemed to actually happen, and we're still in a slow growth recovery. What's your take on the global economy?
Chaim Siegel of Elazar Advisors LLC, author of Pro Trader: The global economy appears to be picking up. We’re focused on the US which is seeing a pickup from Q1 to Q2 where GDP has gone from 1.2% to about 4% projected in Q2. It’s something real. The extra confidence, whether fiscal stimulus happens or not, seems to have shoved businesses into finally doing more business and it showed up in earnings and economic numbers.
What we’re really amazed by is how many people are out of the market as it hits new highs. AAII, for instance has below historical average bullishness. And as the market hit new highs, bullishness dropped for instance last week and bearishness picked up.
A lot of people are scared and getting out. That's not a sign of a top. Euphoria is a sign of a top.
We love the “action” in bonds. Even as the Fed says they are going to taper and reduce their $4T bond portfolio, bonds don't budge. Investors are too afraid to let go of risk-free assets. That is not bearish as markets hit new highs. That is a sign of very bullish action with everybody still on the sidelines.
While things can change all the time, we want our Pro Traders to be aware of the short term but have the longer term imprinted in some part of the brain. We’re trying to build a real-time easy-to-follow market-responsive map to understand risk but have our sights set on the bigger prize too.
SA: What time frame do you focus on in the market, and how do you stay focused on that given the incessant news flow in the online era? (Assuming you are very short term, how do you ride out the ups and downs)?
EA: Our time frame depends on what the market gives us. In oil it’s shortened up but in equity markets it’s lengthening.

For oil, we are getting fundamentally more bullish. The economy is picking up. OPEC is adamant about getting oil up. US inventories have now come down for multiple weeks in a row. That all said you can’t just buy oil. Oil’s been dropping. So while we have the medium term in mind we want to see it in the shorter term action. We want to see oil actually stop going down before we want to buy.
See Full Interview

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