Thread: FireWeatherMet Account Talk

Sometimes I must admit I like the way your think - I'm still up +$3K on the week so far.

you can polish a turd as much as you want...but it's still a turd

Originally Posted by FireWeatherMet

Well, a big down day with NO QE tapering. LOL! imagine that!

However, remaining in stocks. Nothing broken.
Not only did we stay above the 50 day EMA, but today's dip is still a "higher low" in a recent uptrend (below).

Fed staying in, so can't imagine a sustained downturn from here...better chances that today was the fakeout, and the next few days we will see a decent rise.
That's the plan...but again, no plan is perfect, so will keep my eye's & ears open.

SP Jun 19.PNG

Well, since then...the trend has been broken.

Been pondering my next move and decided that instead of panicking, it was time to wait...to digest some more news.

Well, Ben DID let us down, kinda-sorta, slightly.
He didn't say he was tapering this month, or next...but did firm up his intension of tapering timetable to "sooner rather than later".
Since the stock market is a forward looking indicator, you can say that the next 1-2 months of full QE was already baked in. Markets now disecting what will be by the end of summer/early fall.

Then troubling comments from China's Central bank.

All along with some recent rise in interest rates threatening to level out what has been a rebirth in the housing market.

Finally Cramer, who said "never fear" a few weeks ago, now says "this aint over yet" pertaining to our downside potential.

So with 2 IFT's still left, decided to bail to safety as a precaution.
Several reasons...one are the charts. Now that we broke past the longstanding 50 day EMA, it stands to reason that the recent spike down (points A-B below) was our initial fall and the current 2 day rally is our "deadcat bounce". If this proves to be correct, and you take the point from from points A to B, and add that flagpole to today's close (point C), it takes us down to near 1525....which ironically is close to our 200 day EMA....somewhere we typically visit once a year, especially after a big strong upward ride (like we've had Jan-May).

SP 6-26.PNG

If I'm wrong, and Bernanke tomorrow signs a contract on live TV declaring he won't change QE for another 12 months, then I'll jump back in. Also, another fresh set of moves arrives this Monday.
But I'd hate to be sitting at 1525 a week from today, thinking how nice it would have been to have sold at 1603. If we go up, I don't think we have that same upward momentum (75-80 pts) potential to get us back to new highs, than we have of the same pointspread of downward potential to near a low of 1525.

Well, despite having to navigate thru the financial "iceberg field", the main indices managed to break above the 50 and 20 day EMA's (below). Since this is the 4th day or more above these levels, it constitutes a breakout, and seems to point to our most recent market low as a short term bottom. This is a very basic "buy" signal.

SP Jul 9.PNG

The thing for me though, is when to buy.
Now I know the answer from BT would be "right away" or "yesterday" and I really wouldn't be able to argue the sarcastic logic there.
But, in many of our recent breakouts/rapid initial run-ups, we tend to get a brief break back down to our 1st resistance level, which in this case would be in vicinity of both 20 and 50 day EMA's, (currently at 1615 and 1622 and slowly rising). This often happens in the form of a short 1-2% drop, sometimes only in a 1-3 day period.

So I will try to be patient and wait for a buying opportunity rather than following the herd....and will try to keep in mind that when you get that really bad day on a bad rumor (or 2 days) don't let it spook you, unless its truly a catastrophic event. Catastrophic rumors are short lived, especially in this market...gotta embrace them as buying opportunities.

Everything is coming together - overwhelming and dazed - absolutely amazing. Keep looking for breakdowns, and there aren't any - very 3rd wavish in all respects. Rising stocks kindle worries of a meltup. I'm going to maintain a bullish stance in perpetuity. Snort.

Originally Posted by FireWeatherMet

Well, despite having to navigate thru the financial "iceberg field", the main indices managed to break above the 50 and 20 day EMA's (below). Since this is the 4th day or more above these levels, it constitutes a breakout, and seems to point to our most recent market low as a short term bottom. This is a very basic "buy" signal.

SP Jul 9.PNG

The thing for me though, is when to buy.
Now I know the answer from BT would be "right away" or "yesterday" and I really wouldn't be able to argue the sarcastic logic there.
But, in many of our recent breakouts/rapid initial run-ups, we tend to get a brief break back down to our 1st resistance level, which in this case would be in vicinity of both 20 and 50 day EMA's, (currently at 1615 and 1622 and slowly rising). This often happens in the form of a short 1-2% drop, sometimes only in a 1-3 day period.

So I will try to be patient and wait for a buying opportunity rather than following the herd....and will try to keep in mind that when you get that really bad day on a bad rumor (or 2 days) don't let it spook you, unless its truly a catastrophic event . Catastrophic rumors are short lived, especially in this market...gotta embrace them as buying opportunities.

Good reminder/advice ... now if I would only follow it!

Have been frustrated on missing the latest rally but have tried to be patient in terms of not jumping in right at the high, but rather and picking an appropriate time (aka dip).
Been spending my time in the political forums, busting Norms "nnuuts" just for fun, but more so as not to keep looking at the up up and away charts and get sucked in just in time for a correction.

After the action of the past few days, as well as this mornings action, it seems that the major US indices are in the 2nd to 3rd day of minor to moderate negative action...approaching the 8-10 day EMA's, which is usually the biggest dip you get in a strong bull pattern. This strongly pushed me towards a "buy".

Another "buy" signal...was the Sentiment Survey so far...last check before the IFT deadline had 52% Bears 40% Bulls...so any correction should be minor.

Another "buy" signal...came from Coolhands observation that total stock allocation on the Tracker has dipped below 40%, which is a buy signal for him. I often glance at the Total Tracker for the year to see where the top 50-100 are...and then glance down to see where the bottom 50-100 are to get an impromptu "Smart $/Dumb $" indicator. I was surprised to see how many of the bottom 400-500 were mostly G or F...which made me feel that no major correction was likely as there are still too many out of stocks. Coolhands post on this can be found here:
http://www.tsptalk.com/mb/blogs/cool...liquidity.html

But to have a bull market continue, it can't be all good news...you often need to have a mix of good AND bad news.

In the midst of the Happy B-day greetings on JTH's thread, Jason pointed out some danger of a double top AND potential of a 50% retracement that could take S&P to 1630...which had me worried too when I read it this morning.
JTH's Account Talk
BTW...Happy b-day Jason.

Tom also mentioned the beginnings of some cracks forming, including a disturbing "mini-top" look to the Dow Transports. Transports down slightly again this morning, so that is a concern with the Transports often (albeit not always this year) being an early indicator of future stock trend. Tom's disc here:
TSP Talk Market Commentary

But, zooming back out to the big picture, more than halfway thru our current runup, Jim Cramer had his "Off the Charts" segment with the "Fibonacci Queen" Carolyn Borodin, who gave 2 possible price tops for the S&P...1721-1765 in the short term, and a longer term top of 1823. Link here:
Mad Money Recap | Nightly Recap for:* Friday, July 12, 2013

So...weighing in all this. decided to jump in this morning...50% S and 50% I.

Cramer had a segment about Europe finally putting in a bottom a few days ago, and the I fund has been the leader this month and is likely to become the go to pick of LMBM, so even though going into the I fund for me has always been the "kiss of death", I'll avoid learning the past lessons of my history and do it again (at least 50% anyway).

i will not bait you anymore if you post more about the markets...you provide good insight

With one more IFT left in July I used it to adjust my 100% stock allocation...going from 50/50 S/I to just 100% S.

2 days of I fund experimentation has left me feeling like someone who has been in an an and out bad relationship, but keeps giving it one more try, hoping this time things will be different.
Will keep it simple and stay in the S fund...hoping that I can ride it to the next Fibonacci level of 1720 in the coming days...and maybe even the next level at 1760 a bit further down the road.

Hopefully the Fed won't throw a major zinger, but a possibility is for the Fed to keep full QE for another 2-3 months before trimming it slightly to 75 billion by Oct...then gradually trending to zero by late 2014...BUT that the "gradual tapering" has already been baked into the market...with no major corrections as long as the tapering is gradual, and remains "data-dependent"
This was described by a Wells Fargo analyst here:
Fed will stop bailing out the economy | Big Data Download - Yahoo! Finance

Fed Downgrades U.S. Economic Growth to Modest, Stays the Course

Fed downgrades US economic growth to modest - Yahoo! Finance

Thank you Uncle Ben, for continuing to cook more rice.

Even my soon to be "former" at COB I fund is showing a nice spike.

As has been the case for months and months...anyone betting against the Fed...has come out on the losing end.

Originally Posted by FireWeatherMet

Cramer had a segment about Europe finally putting in a bottom a few days ago, and the I fund has been the leader this month and is likely to become the go to pick of LMBM, so even though going into the I fund for me has always been the "kiss of death", I'll avoid learning the past lessons of my history and do it again (at least 50% anyway).

That was from about 2 weeks ago.

Here is a story that just popped up.

Europe May Now Be a Better Investment than America

Europe May Now Be a Better Investment than America | The Exchange - Yahoo! Finance

Maybe time to think about the I Fund???

However, every time I go into it though, I end up feeling sick right afterwards.