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Coolhand's Market Analysis

More Gains, But...

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The Dow may have closed up nearly 150 points, but it was up about twice that before some serious selling pressure kicked in during the afternoon session. And large, late day moves are usually attributed to the smart money, which begs the question whether another reversal is at hand.

Overall, I don't think there's a whole lot to read into today's action as market character has generally seen stocks run quickly from one end of the trading channel to the other in concert with some news headline (usually one involving the European debt situation). And we hit the upper end of that channel intra-day.

Here's today's charts:

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NAMO and NYMO continued to rise on today's action, but notice the downward trajectory of the peaks and troughs since late August. Both remain in a buy condition.

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NAHL and NYHL also remain in a buy condition.

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TRIN and TRINQ are flashing buys as well and are fairly neutral at the moment.

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BPCOMPQ turned up today, which wasn't surprising given the strength of the last 3 trading days. It also flipped to a buy in the process.

So all signals are flashing buys again, but the system remains in a sell condition as NYMO has yet to tag a fresh 28 day trading high. Still, we now have an unofficial buy signal after today's action. But if you haven't noticed, these signals have been occurring near turning points as the volatile nature of this market exaggerates or blurs any trend. About the time a buy or sell comes, the market is nearing a turning point. And since the system has yet to confirm this upward move, we may have more upside left in spite of the late day swoon. That's just a possibility and not a given however.

I chose to sell my paltry 6% stock position today as the upside strength forced me to delay any further accumulation of stocks. I had anticipated lower prices over the coming weeks, but once again the market had other ideas.

One other item of note is that I am now viewing the F fund as a risky fund. I am somewhat alarmed at how much of its gains from last week were lost in just three days. And it hasn't been very long since the Fed unveiled operation twist, which means the bond market will be manipulated yet again. Something just doesn't sit well with me and it may be time to take a longer term view of bonds since yields have been moving lower for quite some time. That can't last forever in spite of the Fed stating they will hold longer term bond yields at low levels for the next two years. I may be wrong about this, but I'd prefer to watch this fund from the G fund for a awhile. That said, I'm 100% F at the moment and looking to bail from it on any strength. Hopefully, by the weeks end as I'd prefer not using an October IFT.

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  1. taker20's Avatar
    Like your thoughts on F and end of the month IFT...

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