While I like that the market is pulling back so I can get in at a lower price, picking the spot to get in can be tough. The S&P 500 is down about 2.5% from the top and many of us are itching to get back into stocks. But you always have to worry about the serious sell offs. 5% and 10% pullbacks start off as 2.5% pullbacks so it's never a guarantee that pulling back to support is all that will happen. The indicators are shaping up but one more push down would make me feel a lot better about getting in. Two weeks ago I missed a nice rally because of this same thinking but will it be the same this time? Can it be that convenient?
I was looking at the chart of oil today and I know it is not much of a surprise, but it was interesting to see just how closely the action of oil had inversely tracked the action of the S&P 500. The biggest divergence from this trend is coming now. Oil has shot up since early February but the S&P has been in an uptrend as well. Is that about to end?
Chart provided courtesy of www.decisionpoint.com
At this point I am still in the G fund but getting a little antsy. As I mentioned yesterday, I would rather see a big sell off before jumping in but if that doesn't happen, I may start moving slowing into the market over the next couple of weeks. Maybe 25% to 35% at a time. I've made no decision as of yet.
I want to make it clear that I don't believe the market is completely out of the woods yet. Before the year is up I think we could see more 5% to 10% pullbacks. I am just looking for the indicators to tell me when there is a possible "playable" rally to act on. I say "playable" because I am not talking about catching a one or two day move. The recent up and down swings have been lasting 2 to 4 weeks this year. That is playable. This recent pullback is only five days old and may need a bit more time.
That's all for today. I may be acting a little too patiently right now but my account is still in protection mode. Stay tuned. Currently 100% G fund. See you tomorrow.
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