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Divot's Market Debrief

This blog mirrors some of my posts from AbjectAvarice.com.

You can find additional commentary there, my stock picks, as well as a real time tracker of my stock and TSP portfolio, a history of all my closed trades, and some more detailed information on my bio and approach to investing.

If you like my writing, please rate the blog entry so I'll know how I'm doing.

My trading perspective is to view the markets as a risk management problem. I seek to control my risk/reward profile by using indicators of supply and demand for first the broad indexes, then specific sectors within the overall market. These indicators determine the my strategy, game plan, and extent of stock market participation. Depending on the level and trend of these indicators, I may chose either a bullish or bearish strategy of varying degrees of aggressiveness. I am a trend follower, not a day trader. I believe this is a deliberate approach to managing serious money for consistent returns in all types of markets.
The primary instruments I use are:
* Point and Figure Bullish Percents
* Market breadth trends

  1. Lost opportunity cost, or: What’s wrong with buy and hold?

    I received an interesting piece of mail this week. If you invest/trade the markets long enough, you’ll get these sort of mailings fairly regularly.

    It was an invitation to participate in a class action lawsuit over something Apple did between 2001 and 2005. I don’t really know or care what they were sued over, but Apple settled – and the cash is now available to be claimed. Essentially, if you bought shares of Apple during that time you might be entitled to some portion of ...
  2. Rumblings of a correction


    I've been quiet on my blog for a good week or so now, just watching the markets. I don't feel the need to post every day if the action doesn't warrant extended commentary. To be quite honest, I've been preparing to write a big "Repent Bulls, for the end is nigh" post... but it's not time for that yet. Not to say that we're not getting closer. ...
  3. Rumors and the Chart – A Quick Look at BP

    The UK rag The Daily Mail broke a story yesterday that Royal Dutch Shell may be quite serious about a buyout of British Petroleum. This rumor has been quite profitable for my position in BP (follow that and the rest of my portfolio here) - but I think the chart says that more strength is ahead.

    My chart notes (click the ...
  4. UAL is Cleared for Takeoff

    UAL looks good to me right now, and I’ve initiated a position with a bit of a different strategy here. I thought taking a minute to explain the technicals and the mechanics of the option position would be helpful. First off, here’s the big picture point and figure chart:
    My chart notes should say it all, but ...
  5. Macroeconomics and the US Dollar

    I have two charts for your perusal tonight, dear readers - focused on the broader indexes. Tonight my thoughts go to my TSP allocation, specifically: my over weighting of the international index (the EFA). This international index will tend to have a bit more volatility than the S&P 500, similar to the Wilshire 4500 (EMW) - but decorrelated at times. Lately, the EFA and EMW have been rather decorrelated. Much of this is due to the economic worries in Europe, as the PIIGS national economies ...
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S&P 500 (C Fund)
S&P 500 INDEX,RTH (^GSPC)
DWCPF (S Fund)
Dow Jones U.S. Completion Total Stock Market Index (^DWCPF)
EFA (I Fund)
iShares MSCI EAFE Index (EFA)
AGG (F Fund)
iShares Lehman Aggregate Bond (AGG)
Source: https://finance.google.com/finance