The Fed raises, stocks down, that's
good?
As I mentioned yesterday, when The Fed raises interest rates and stocks end the day in the red, 30 days later the market was higher 7 of the last 7 times going back ten years. So yesterday's 100 point drop is not a terrible thing. It could mean good things to come later.
But what about now? Today is the first day of July and the day prior to the July 4th holiday. It should be a very lightly traded day and it usually means a positive day for the market. Following a 100 point drop, a little bounce is not out of the question. In the chart below, "-1" is the trading day prior to July 4th (today), and "+1" is the day after (Tuesday), etc.
Chart provided courtesy of www.sentimentrader.com
Last year the first week of July was actually pretty bad. That went against normal seasonality data. So how does July do in general? The chart below shows us the percentage of time each month is positive. June, July and August are a little better than a coin flip with July being positive 53% of the time from 1950 to 2002.
Chart provided courtesy of www.sentimentrader.com
I want to show you that 1994 comparison one more time. Here's the 1994 S&P 500 chart. I circled where I believe we may be now...
And here is the current chart...
Charts provided courtesy of www.decisionpoint.com
So while my indicators are still leaning toward overbought, we are seeing signs of it easing. Also, the "dumb money" bearish % went from 18% last week to 29% this week. If that climbs to 35% or 40%, that will start me thinking about getting into stocks again. It may not take much more than one more push down as we can see happened in the 1994 chart above.
Two more things: I updated the longer term market comments. I do this only twice a year, the first week of January and the first week of July. This is geared more toward the investors who do not make many transfers during the year but also recaps the prior six months.
The TSP Talk Sentiment Survey for next week is being emailed out today. If you haven't signed up yet, see the Administrative Note below.
That's all for today. Currently 100% G fund. Have a great holiday weekend.....
Administrative Note: I have started the TSP Talk Weekly Sentiment Survey which will be a poll sent via email each Friday asking you one question; Are you bullish, bearish or neutral for the market in the coming week? If you want to be a part of this, click here ... Join the Weekly Sentiment Survey and input your email address. When the confirmation page comes up, there will be two boxes on the left side. One to join the Weekly Survey, and one to join the email alert list. Choose the box of the list you wish to be added to. If you are already on the email alert list, or you would like to be, you will need to check both the Email Alert and the Weekly Sentiment Survey box. Thanks!
As I mentioned yesterday, when The Fed raises interest rates and stocks end the day in the red, 30 days later the market was higher 7 of the last 7 times going back ten years. So yesterday's 100 point drop is not a terrible thing. It could mean good things to come later.
But what about now? Today is the first day of July and the day prior to the July 4th holiday. It should be a very lightly traded day and it usually means a positive day for the market. Following a 100 point drop, a little bounce is not out of the question. In the chart below, "-1" is the trading day prior to July 4th (today), and "+1" is the day after (Tuesday), etc.
Chart provided courtesy of www.sentimentrader.com
Last year the first week of July was actually pretty bad. That went against normal seasonality data. So how does July do in general? The chart below shows us the percentage of time each month is positive. June, July and August are a little better than a coin flip with July being positive 53% of the time from 1950 to 2002.
Chart provided courtesy of www.sentimentrader.com
I want to show you that 1994 comparison one more time. Here's the 1994 S&P 500 chart. I circled where I believe we may be now...
And here is the current chart...
Charts provided courtesy of www.decisionpoint.com
So while my indicators are still leaning toward overbought, we are seeing signs of it easing. Also, the "dumb money" bearish % went from 18% last week to 29% this week. If that climbs to 35% or 40%, that will start me thinking about getting into stocks again. It may not take much more than one more push down as we can see happened in the 1994 chart above.
Two more things: I updated the longer term market comments. I do this only twice a year, the first week of January and the first week of July. This is geared more toward the investors who do not make many transfers during the year but also recaps the prior six months.
The TSP Talk Sentiment Survey for next week is being emailed out today. If you haven't signed up yet, see the Administrative Note below.
That's all for today. Currently 100% G fund. Have a great holiday weekend.....
Administrative Note: I have started the TSP Talk Weekly Sentiment Survey which will be a poll sent via email each Friday asking you one question; Are you bullish, bearish or neutral for the market in the coming week? If you want to be a part of this, click here ... Join the Weekly Sentiment Survey and input your email address. When the confirmation page comes up, there will be two boxes on the left side. One to join the Weekly Survey, and one to join the email alert list. Choose the box of the list you wish to be added to. If you are already on the email alert list, or you would like to be, you will need to check both the Email Alert and the Weekly Sentiment Survey box. Thanks!
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