March goes out like a bear

I'm hearing a lot of talk about the end of the quarter window dressing that marks up stock prices for the sake of propping up money managers' quarterly reports.  Even RevShark has stated this and he manages his hedge fund.

I had mentioned on Tuesday that the last week in March is actually weaker than normal based on the March seasonality chart at the bottom of this page.  In fact, sentimentrader.com tells us, "Over the past 56 years, the last week in March has shown an average return of -0.1% with only 43% of them being positive.  It made no difference whether the quarter up until then had been positive or negative - the overall bias was poorer than random and generally negative."

So far the S&P 500 is down this week.  How does this help us?  Well at this point it doesn't since the week is basically over as far as TSP transactions are concerned.  But I find a little comfort in the fact that the market is actually going along with the norm. 

Do you remember the week between Christmas and New Years?  Typically one of the strongest weeks of the year and it hit us for some big losses in 2005.  When the market is running against the grain you start to question everything that your indicators are saying, at that's usually not healthy.  I say usually because our indicators have been waving the yellow flags for quite some time, only to see the market to move sideways to higher the entire time.  Not a big shock that the market isn't doing exactly what our indicators say.  That happens from time to time with every investor / trader.  But to many of our readers, particularly newer readers, it seems to be a point of frustration.  I've gone through this enough times to know you just have to stick with your plan - if you believe in it.  I do believe in mine but at the moment it is putting our faith to the test.  Eventually things work out. 

We could end up getting a buy signal and the market will have never pulled back.  That's not great but that's the way it goes.  It does happen, but more times than not sticking with the plan pays off.  Not in the short term, but over months and years.  You don't have to follow what I do.  In fact I'd prefer you didn't.  I'd rather you looked at all the information, both here and elsewhere, and come up with an allocation that fits your comfort and risk levels.  But for those following, we are still in a yellow flag caution mode.


Yesterday was a bit of a strange day.  The Dow gave back all of its gains from Wednesday (65 points), the S&P 500 and small caps were down just modestly, the Nasdaq was up slightly, and the I fund had a very big day thanks to a very weak dollar.

Oil is over $67 a barrel again, interest rates are rising, Iran is becoming more defiant, and yet the market still hangs tough.  This is the sign of a market that doesn't seem to want to go down.  It's like a coiled spring waiting to unload.  The indicators seem to say that unloading will be to the downside, but the "climbing the wall of worry" people believe it is going to breakout (up), and breakout strongly.  Market pundits seem very torn.

If they don't know, how are we to know?  We don't.  That's why I use my indicators.  It keeps my emotions and guessing out of it.

I did some maintenance on the message board last night and I think we have that baby fine tuned.  It had been acting very sluggish during peak hours but it was flying last night.  The test will come today I guess.  Jump on in and load it up.  Let's see how many people it can handle. 

That's all for today.  Currently 100% G fund.  Thanks for reading.  Have a great weekend!
 

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