Thread: FireWeatherMet Account Talk

Well, we were down to the last 3 trading days of the month, and had an extra IFT in hand.
The recent drop on all the major indices has been fierce, got caught in half of it, but was able to bail enough to avoid the final 3% drop.
While I'm still bearish in the medium term (next 2-3 weeks) it seems a short term window of opportunity might be briefly opening.
Using the S&P chart as a barometer, we can see the 9% drop from the most recent highs 2 months ago, has some signs indicating, if not a bottom at the very least, a decent "Dead Cat Bounce" potential, especially where we had 2 roughly equal 7% legs downward, with a brief bounce in between (see chart)
First, any downturn near 10% that lasts for over a month, with complexities (brief sharp bounces in opposite directions) can often be viewed as hitting a bottom if we're in a Bull Market.
If we no longer are in a Bull market...then of course there are other factors...but one key level of going from Bull to Bear market is the 200 day moving avg holding as resistance. We are basically there right now, and often that serves as a deflection point, even if eventually we do move lower.
Also there is a big open gap a few percent up from current levels, and those gaps are usually filled, before heading lower.
So, despite my medium term trepidations, I decided to roll the dice for a quick 1-3 day move back into equities (C Fund)...with a finger on the sell trigger if things go bad.
Left 100% G position and used 2nd Sep IFT to go 100% C COB Today.

SP.jpg

Originally Posted by FireWeatherMet

Well, we were down to the last 3 trading days of the month, and had an extra IFT in hand.
The recent drop on all the major indices has been fierce, got caught in half of it, but was able to bail enough to avoid the final 3% drop.
While I'm still bearish in the medium term (next 2-3 weeks) it seems a short term window of opportunity might be briefly opening.
Using the S&P chart as a barometer, we can see the 9% drop from the most recent highs 2 months ago, has some signs indicating, if not a bottom at the very least, a decent "Dead Cat Bounce" potential, especially where we had 2 roughly equal 7% legs downward, with a brief bounce in between (see chart)
First, any downturn near 10% that lasts for over a month, with complexities (brief sharp bounces in opposite directions) can often be viewed as hitting a bottom if we're in a Bull Market.
If we no longer are in a Bull market...then of course there are other factors...but one key level of going from Bull to Bear market is the 200 day moving avg holding as resistance. We are basically there right now, and often that serves as a deflection point, even if eventually we do move lower.
Also there is a big open gap a few percent up from current levels, and those gaps are usually filled, before heading lower.
So, despite my medium term trepidations, I decided to roll the dice for a quick 1-3 day move back into equities (C Fund)...with a finger on the sell trigger if things go bad.
Left 100% G position and used 2nd Sep IFT to go 100% C COB Today.

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Well played!

Todays free-fall has the S fund finally filling that large open gap from early June.
Its now or never for small caps.

*** UPDATED POST ***
Seems C Fund also had an early June open gap that has also just been filled.
If I was out of equities I would be buying back in now, at least for the short term...some open gaps a few % higher from here could get filled in the next several days to a week or so.

S-Fund.jpg

SP.jpg

Way back there in March 23 there are a few gaps, when do those get filled?

[QUOTE=FireWeatherMet;691424]Todays free-fall has the S fund finally filling that large open gap from early June.
Its now or never for small caps.

*** UPDATED POST ***
Seems C Fund also had an early June open gap that has also just been filled.
If I was out of equities I would be buying back in now, at least for the short term...some open gaps a few % higher from here could get filled in the next several days to a week or so.

S-Fund.jpg

Sure would like to see that August gap filled.

Originally Posted by ridingthefundout

Way back there in March 23 there are a few gaps, when do those get filled?

2 of the March Gaps got filled, to the downside.
There was another one in March and another a bit later...not all gaps get filled, usually (but not always) the big ones, but if the market takes off in a prolonged upward or downward move for several months, those gaps often become irrelevant as we're into a different economic cycle, IMHO. Maybe others have additional info on this, but there seems to be a time limit, a Gap from more than 6 months ago might stay in the rear-view mirror...while the ones in the most recent few weeks/months seem to be the most relevant....esp BIG ones.

Gaps.jpg

Had a nice ride in the C fund past 2 weeks with the late October low being set.
This rally has everything working for it...the Fed signaling it might be done with raising rates, the inverted bond market starting to reverse course, GDP estimates in a Goldilocks 2% range, and Oil falling sharply (Deflationary), down into the 70's now instead of rising thru the 90's like it was in the summer, or the 130's last year when Inflation was over 9%...now in the 3's. Also we're entering the Strongest Seasonality period of the year.

Having said that...Today is the 7th up day in a row on the S&P. Last time we had 8 days was (according to an old 2013 article) was in 2004.
Looking at the chart below, there was a gap up that the S&P is now approaching, and could fill COB today. With that...there are some down gaps several percent below that could easily get filled before going back upward. And I do think we will be in an uptrend for the rest of the year...so this will be a quick November "Profit Lock" of 4+% by going into the G but will jump back in if we fill one of the gaps below. Will also likely mix next allocation between Small Caps as well as S&P, as we've seen small caps start to outperform large caps in the past week (another sign we are early in this rally). So leaving 100% C Fund and going 100% G COB today.

SP.jpg

FireWeatherMet, you were spot-on w/your assessments and happy for you doing well jumping to C at end of OCT & back to G today. I, for various reasons, have been generally away from watching the markets or reading much about it... so good to check up on stuff today & thank you much for sharing here.

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Thanks for your posts.