Thread: FireWeatherMet Account Talk

Today's action actually makes me more bullish and glad I jumped into stocks 2 days ago.
After going up 10-15% in parabolic fashion, a 1% dip in equities actually levels off the steepness of the rise a bit on the charts.
Maybe even more important, with a big 1%+ drop on the S&P, the VIX actually went DOWN over 2%.

So all major technicals are now all screaming "Bull Market", where after a 20-30% fall (-40% Small Caps) past year, we're in a reverse pattern since the OCT lows, now 4 months in the rear view mirror.
Major long term downtrend line has been broken as well as 200 MA, for almost 2 weeks. We've briefly pierced the 200 MA in the past for just a few days, but always failed.
Blowing way thru that level AND the long term trendline for 10 days now is a strong breakout signature that I cannot ignore. As well as the recent "Golden Cross".
We actually have "Full Bull Market" on the charts, with the 20 MA now above the 50, and 50 MA now above the 200...for the 1st time in 12 months.
I'm planning to stay in equities 80-90% of the time from now onward, unless a "Black Swan" leers its ugly head.

Market trying to digest the powerful jobs report of 500K Jobs in Jan, which certainly pushes the "Recession" Fear off the table for now, but leaves a possible question for Inflation, although on that front CPI was down sharply past month. Interesting comments on CNBC's "The Closing Bell" where John Mowrey, NFJ investment Group chief investment officer, said he was super bullish, saying that this is the most hated rally in years, mainly because most large scale investors were not ready for it, and stayed positioned defensively for too long. So there's a lot more $$ that can get thrown into stocks over the next few weeks/months. In the immortal words of Birchtree "The Smell of Bull Manure is Wafting All Around...I don't think it's possible for me to be more bullish!!!"

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Sounds great, FWM. Funny, though, is some analyst on MW saying this could be the Mother of All Sucker Rallys... stay nimble my friends!

Interesting take on stocks due to historical technicals.

Curious to what others think.

Originally Posted by FireWeatherMet

Interesting take on stocks due to historical technicals.

Curious to what others think.

I feel like we are closer to 1974 than 2008, with years of pain ahead of us. But in light of recent financial events, perhaps 1974 & 2008 had an ugly baby...

An incredibly rare stock market indicator just flashed bullish for the first time since 2019



https://finance.yahoo.com/news/incredibly-rare-bullish-stock-market-220437824.html

After sitting in 50/50 S and I since early February, Indices are starting to lean over, after a decent 5-6 week run-up
I'm using 1st April IFT to go back into safety...100% G COB Today.

Seems my fear was misplaced with the "Fake Breakdown" 2 days ago, markets now busting out, as charts, esp S&P looking very bullish, bouncing sharply off the 50 day EMA (chart below), where the 20 is above the 50, is above the 200 EMA.
That rising peak trendline could be our next target (or not, lol). Even if its just a shorter term rally before the "Sell In May" signal, I'll give it a try.
The S fund has underperformed the S&P, and is doing so today, but Tom mentioned some uncertainties in small caps, so I split the difference between the 2.
So with an extra IFT in hand on last trading day of the month, there's no shame in correcting a possible mistake, so leaving G and went 50/50 C & S COB Today.

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1st May IFT will run to safety and wait for Debt Ceiling Drama to finish playing out.
I've seen this movie before, 12 years ago...it ends badly...locking in roughly 1% monthly gain...and may jump back into stocks if unexpected debt ceiling agreement occurs.

Leaving 50/50 C and S position and going 100% G COB today.

Whew...feel I dodged a bullet with yesterdays exit back to the safety of the -G- Lilypad.

VIX making a huge upward move today.

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(From the Gov't Shutdown/Debt Thread) I agree with many there, that the "fringe" on both Dem and GOP are not going to get their way, even Massie, a very conservative congressman on the rules committee yesterday voted to forward the bill to a vote in the House.

The Senate tends to have more "Adult Leadership" thru its ranks, and many of them still remember the sharp market drop of 20%+ and the Moody's downgrade of US debt back in 2011, back then those who pushed for default, were blamed in the media and by the public, so I feel that yesterdays Rules committee vote was the big hurdle, and that this bill will go thru the House tonight and get passed by the Senate in time for June 5th.

I exited stocks a week ago, locking in modest monthly gains, might even end up in the top 10 for May given this mornings downward action....so considering putting my $$ where my mouth is, and using 2nd May IFT to go back into stocks COB today....at least into the first part of June. Unless I have a clear signal between C and S, I usually split the difference. Given Nvidia was a huge part of the recent S&P rise and could be prone to some profit taking, I decided to lean slight towards small caps. So using 2nd May IFT by leaving 100% G position and going 60% S and 40% C COB today.

Really happy with my move back into stocks on the last day of May, paying dividends to the tune of 5.24% so far in June.
When stocks go up so quickly, so fast, I always get worried about the market being overextended in the short-term.

What bothered me even more this past morning, and ALMOST made me lock in profits & bail, was that while main stock indices were up nicely, the VIX skyrocketed UPWARDS, instead of sliding downwards.
Also noticed the C-Fund outperforming Small Caps suddenly the past few days...sometimes a sign that a rally is getting long in the tooth.

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But decided I will stay the course at least thru CPI announcement TUE and maybe even Fed announcement later this week.
With price of oil sharply lower than a year ago, CPI should be down sharply. BUT on top of huge rise in stocks, good news on CPI/Rates could push us well into "Overextended & Profit Taking" territory. With 2 June moves still available, can afford a step out, then step back in at a lower price.
We'll see what Tuesday brings...good luck to all.