Thread: Uptrend's Account Talk

Welcome back, great post.

Monday , March 2 should be a positive day with a possible strong move up. A lot of up volume flowed into the markets in the last few minutes on Friday February, 27. Look for the large cap to lead. Sentiment has cooled a bit from strongly bullish and now the wall of worry commences.

My Uptrend system continues in "buy and hold" status. As I have mentioned previously, this system is configured to make less than 10-12 moves in a year and has a proven record in back testing. Among other things, the model uses market breadth, relationships between sectors, momentum, chart technicals, statistics and time. It is a non-stop model. Currently sentiment is handled separately in another non-stop model, but is used as reinforcing evidence for the Uptrend model. The Uptrend model can buy and sell twice in a month or hold for months, depending upon market activity (as is the case now).

The monthly chart of UUP (bullish US dollar) closed for February with what could be interpreted as a hammer candlestick. After reviewing the US dollar charts, I am now thinking the USD could advance or top for another 1-3 months. This would allow time for oil to make a lower low and perhaps the final low. IMO, the USD ambiguity in direction of late, partly has to do with Yellen's unclear statements about the timing of a FED rate hike. See if this is any clearer to you: After Yellen

My uptrend system "sold" on the close yesterday. Heading to F/G. Today looks like a back-test of broken support.

Originally Posted by Uptrend

My uptrend system "sold" on the close yesterday. Heading to F/G. Today looks like a back-test of broken support.

Hey, thanks much for the advance notice. I'm with you!

Originally Posted by Uptrend

My uptrend system "sold" on the close yesterday. Heading to F/G. Today looks like a back-test of broken support.

I'll add another thanks, it seems like the market is running out of steam.

Time will tell, I wonder how much or if the oil patch shutdown is going to affect the numbers tomorrow...

Originally Posted by Uptrend

My uptrend system "sold" on the close yesterday. Heading to F/G. Today looks like a back-test of broken support.

Hi Uptrend,
I bailed today and went all G. Last Thursday, I moved almost entirely out of equities leaving 20% in equities, and moved 30% to G and mistakenly 50% to F.

I say mistakenly because I did not "see" that the weekly I am using, Slow Stochastic, was already going below signal line for F fund; otherwise I would have bee 80%G as of last Thursday. Is there a particular indicator that would sway someone to move to F fund today instead of G???

I've never trusted F fund much because as of this past year it moves up with equities and other times it moves inversely, as I understand it should. So not really certain what is driving it. Everyone seems to talk a lot about the strength of the dollar, and I believe it will continue to strengthen, so I would think bond yields would continue to go up and bond values would go down (not good for F fund). Hope I am understanding this correctly. If not, I would appreciate any information you or others can offer.

Thanks, DBAnnie

Originally Posted by DreamboatAnnie

Hi Uptrend,

I've never trusted F fund much because as of this past year it moves up with equities and other times it moves inversely, as I understand it should. So not really certain what is driving it. Everyone seems to talk a lot about the strength of the dollar, and I believe it will continue to strengthen, so I would think bond yields would continue to go up and bond values would go down (not good for F fund). Hope I am understanding this correctly. If not, I would appreciate any information you or others can offer.

Thanks, DBAnnie

Hi DBAnnie: I agree that the movement of bonds is at times mysterious. I put up the AGG on the weekly chart below to aid this conversation.

agg_03_05_15.jpg

The vertical blue line shows that the last time the AGG was really oversold was back in July, 2014 and has been rising ever since. Notice that the RSI below the chart in the red box has not really gone much below 50, so this is strength. What is causing it? Bonds are related to stocks, commodities and the US dollar, although not directly. To the right of the vertical blue line in the panels above the AGG chart we see SPX rising with AGG, the UUP (bullish USD) rising with AGG and Copper (surrogate for the metals or commodities) falling or inverse. From this chart we see an inverse relationship of bonds with commodities, an inverse relationship of commodities with the USD and a positive relationship of SPX with AGG. So right now, more than anything else, the run-away USD is pushing commodities to real low levels, which in turn is pushing up bond prices. As well, the positive correlation of SPX with bonds hints at inflation. There is way more to this intermarket analysis and I defer to John Murphy of Stockcharts for a technical discussion found here: Intermarket Analysis [ChartSchool]

Originally Posted by Uptrend

Hi DBAnnie: I agree that the movement of bonds is at times mysterious. I put up the AGG on the weekly chart below to aid this conversation.

agg_03_05_15.jpg

The vertical blue line shows that the last time the AGG was really oversold was back in July, 2014 and has been rising ever since. Notice that the RSI below the chart in the red box has not really gone much below 50, so this is strength. What is causing it? Bonds are related to stocks, commodities and the US dollar, although not directly. To the right of the vertical blue line in the panels above the AGG chart we see SPX rising with AGG, the UUP (bullish USD) rising with AGG and Copper (surrogate for the metals or commodities) falling or inverse. From this chart we see an inverse relationship of bonds with commodities, an inverse relationship of commodities with the USD and a positive relationship of SPX with AGG. So right now, more than anything else, the run-away USD is pushing commodities to real low levels, which in turn is pushing up bond prices. As well, the positive correlation of SPX with bonds hints at inflation. There is way more to this intermarket analysis and I defer to John Murphy of Stockcharts for a technical discussion found here: Intermarket Analysis [ChartSchool]

Wow! Great explanation and charts! I'll be digesting and studying this all weekend and I'm sure others will too. Will use link too. Thank you for the help! DBAnnie

Originally Posted by Uptrend

Hi DBAnnie: I agree that the movement of bonds is at times mysterious. I put up the AGG on the weekly chart below to aid this conversation.

agg_03_05_15.jpg

The vertical blue line shows that the last time the AGG was really oversold was back in July, 2014 and has been rising ever since. Notice that the RSI below the chart in the red box has not really gone much below 50, so this is strength. What is causing it? Bonds are related to stocks, commodities and the US dollar, although not directly. To the right of the vertical blue line in the panels above the AGG chart we see SPX rising with AGG, the UUP (bullish USD) rising with AGG and Copper (surrogate for the metals or commodities) falling or inverse. From this chart we see an inverse relationship of bonds with commodities, an inverse relationship of commodities with the USD and a positive relationship of SPX with AGG. So right now, more than anything else, the run-away USD is pushing commodities to real low levels, which in turn is pushing up bond prices. As well, the positive correlation of SPX with bonds hints at inflation. There is way more to this intermarket analysis and I defer to John Murphy of Stockcharts for a technical discussion found here: Intermarket Analysis [ChartSchool]

Thank you for all the unselfish time and effort you put forth to help us gain a better understanding. Much appreciated.

Here is the SPX monthly chart, I have shown in the past. This chart suggests that there is more upside to come, as the upper BB has not been hit yet. However, the RSI has weakened a bit as well as the stochastic. If the RSI can stay above about 65 and the stochastic above 80, the bull market will continue. To touch the upper BB, the SPX could make a run to about 2200. Keep in mind we are in the late stages of a bull and any huge monthly rally should be sold IMO. This downtrend should bottom either here or just below, near 2020-2035. The unusual US dollar rally cannot last indefinitely, and commodities will get a bid somewhere. I am accumulating Vale, X, FCX and AA at these sale prices.

03_11_15.jpg