ayla Account Talk

[ayla]

S=100%

Should have made this move on Tuesday, the 26th. Now that I'm looking at indicators, I've got to learn to trust and follow them, next step I guess.

The %k fast stochastic for the S fund still has some room to move up. The C fund %k fast stochastic is much higher and so is the I fund (though the I fund never follows the standard rules.) Also, the RSI for the S fund is low but not too low and going in the right direction unlike the C and I.

Not expecting a lot here because I'm so late but I think I will be better off in the market than out.

May not be in for very long because still nervous. BUT my nervousness has subsided some because the VIX %k fast stochastic is pretty low and so is the VIX RSI.

I did a look at the VIX during a couple of its former "peak events" and seems like it is consistent that the %k fast stochastic gets very high and the VIX RSI goes high at the time you want to get out, in other words, it goes into a serious over bought condition. Not there at this time, IMO.

Not sure about staying in over the weekend. I may take the risk depending...

 

[airlift]

Ayla,
I just finished reading Tom's very useful daily market comments. I am sure you will note the extraordinary bearish coincidence and convergence of the many indicators. Since you are following the VIX closely, I bring up the following observations. I am looking at the 6 month daily chart in stockcharts.com. Yesterday the VIX closed at 10.99 (previous close 10.64). The VIX closed above all significant moving averages. In my settings it closed above the 5, 10, and 20 EMA; and also closed above the 50 MA. Significantly, the 50 day MA (10.88) has crossed over the 20 day EMA (10.83). For your consideration, I believe that this could be a very strong signal of things to come. Good Luck and Happy New Year!

 

[ayla]

I'm watching the VIX closely - RSI and %k fast stochastic are still in the moderate range. Things could change quickly but I don't think it will be today.

VIX RSI moved from 44.9 to 35.6 in the past day.
VIX %k fast stoch moved from 24.8 to 48.3 during same time period.
(These values are from my own spreadsheet and do not take into consideration intraday highs and lows.)

G=100% - Just changed to this position. I don't think the S fund has that much more breathing space. I hope to go 100% I in the coming year because that is the trend. I will be looking for a good day to buy back in.

Happy New year to everyone.

 

[ayla]

Changed my mind and went I=100% after all. Doesn't look like it will be that good of a day for the I fund after all. I was spooked a little because the dollar was down a fair amount. Not the only thing to consider, apparently.

 

[ayla]

Maybe I should call this the "VIX watch"?

Wanted to report that my spreadsheet data (which does not include intraday values) shows the VIX %k fast stochastic (14 day) jumping (or "popping") directly to 100 from the previous days moderate value of 48. This is just another little message (or BIG message) that the VIX is heading upwards. Which has often in the past meant the TSP funds are heading downwards (for anyone new to the VIX chart).

I thought about taking my money off the table on this coming Weds (COB) which is ASAP for us but then I looked again and can't find anywhere in the last two years where there was any kind of a major dip (that can be correlated with the VIX movements) in any of the funds as long as the VIX stays below its 200 day SMA.

And there IS still that nice little run-up in May that occurred immediately preceding the VIX 200 SMA crossover so think I will continue to watch but not panic yet.

I will jump out immediately once this 200 day crossover happens. And even if it goes back down, I will remain out until after an obvious VIX "peak event" occurs (or I find some new indicator that will allow me to rationalize getting back in the market.) FYI - the VIX needs a 12% (or so) increase from Friday's closing for there to be a 200 day crossover.

(There are other reasons I might jump out as well - given the volatility of the I fund... )

Of course if the market was so predictable, we would all be rich. So I still have some concerns that we may be looking at some unusual behaviour especially with the Dow Transportation average so low and also the expectation of possible violence in Iraq after Saddam's execution (does violence there affect the market usually?) that will cause all hell to break loose on Weds.

 

[ayla]

Just went G=100%.
Wish I could say it was based on a clear specific strategy but no, it is based on:
1. numerous TSPtalk high flyers going to the G
2. VIX still acting up (though sometimes this means a new buying opportunity, not always doom and gloom, can't tell)
3. Don't want to leave money on the table over the weekend when too many doom and gloom predictions
4. I fund has popped to 100 for its %k slow stochastic - I plan to wait for it to drop before considering on buying back in. I don't like the RSI for any of the other funds.
5. Knowing that some kind of correction, large or small is due, causes me to be less likely to buy and hold with confidence that a good day will quickly follow a bad one.

 

[ayla]

Just went c=25%, s=40%, I=35%

Wanted to get back into the market since the VIX hasn't reached its 200 day SMA yet. But since I wasn't sure, I decided to go with the new TSP Trader allocation, especially since it demonstrated pretty closely my confidence level in each of the funds.

 

[Birchtree]

Check this one.

http://www.stocktiming.com/wednesday-dailymarketupdate.htm for 1/10/07

 

[Birchtree]

Sorry to hear you feel the way you do - strictly your choice. Do you think I'd win as the most ignored? Probably.

 

[ayla]

Just went I=100%.

The %k fast stochastic (on my spreadsheet) for the I fund was at zero (very oversold) day before yesterday and 29 last night. This indicator for the I fund doesn't get to zero very often and from what I can tell, when it does and if it takes off (i.e. doesn't return to zero), it has a nice little run. There is probably going to be a high price for me to buy in today but I'm counting on a followup of at least a couple of days that will make it worth it.

..also, I took special note of some comments on the board that the dollar may be headed for some pullback...I'm hoping that's the case since that would positively affect the I fund as most know already.

The S fund just went into overbought with its 100 value for the %k fast stochastic. May still have some return to give but maybe not that much.

Note on the VIX - I wonder if there is a possibility that the VIX peaked on Dec 7th (way below the 200 SMA). Seems like a case could be made but it is such a wild idea, I don't plan to quit watching...

 

[Wheels]

I'm not really much of a TA guy, but you may have just convinced me to stay in the I (50%) a while longer.

 

[Fivetears]

Kinda gutsy tapping the I Fund on a Friday, ayla. Allot can happen over a three day weekend.

 

[ayla]

Kinda gutsy tapping the I Fund on a Friday, ayla. Allot can happen over a three day weekend.

Yeah - guess I don't have enough excitement in my life (now that I'm ignoring Birchtree, LOL). I hope to hang in the I fund at least thru Weds in case Tuesday stalls..

I'm not really much of a TA guy, but you may have just convinced me to stay in the I (50%) a while longer.

Oh my, pressure is on. Note to new readers: (Wheels, I know you're not one of those), please note my inexperience and track record that isn't that great before following me - could be a sinking ship --caveat emptor.

 

[ayla]

50% S
50 % i

Struggled with whether to stay with the I fund since the dollar looks like it is sinking but apparently there are other indicators that I don't understand that are important ...

Since VIX is up today, that commonly means it will be followed by a down day so today might be a good buying opportunity.

Since the Dow Jones Transportation seems to be heading back up very nicely, I noticed some correlation between the DJT and the S fund (duh) (and probably C but I don't follow C much). Thought I would try to find a position to hold for a while (even thru bad news) so this half and half position seems the best I can do given my limited knowledge and understanding (understatement).

Hopefully news won't be too bad.

Think I've found a way to get some free historical data for the dollar - I'm gonna work on that - TRES important!

 

[ayla]

G=100%

Probably a blood bath today (and for a month or so). So much for the VIX having a predictable pattern. In the past, there were still some good days after the first big rise on its way to the top but todays percentage of over 60% is "over the top" and more importantly over the 200 SMA so I'm not going to be one to count on its coming back down.

Oh well. Once this phase is over, hopefully that means the rest of the year will be a fun ride up.

 

[fedgolfer]

G=100%
60% is "over the top"

QUOTE]

I wouldn't use VIX as a guage to IFT this AM, until a real number can be straightened out, there's no way that yahoo reading can be accurate.

 

[ayla]

I disagree. Past history of the VIX shows that a rise this big does have precedence.

Though looks like a crazy day. Already back down. I may change my position before the bell.

 

[airlift]

Perhaps Birchtree is on the right track. Remember tough that Birch's time horizon is longer than many of us.

 

[Pilgrim]

I disagree. Past history of the VIX shows that a rise this big does have precedence.

Though looks like a crazy day. Already back down. I may change my position before the bell.

You looked into how this number is calculated in some detail, I believe. Is it, first of all, an instantaneous calculation or some sort of running average? If it is a running average it is hard to imagine a sharp spike. If it is not, then could you speculate about what could cause it to happen - if it is for real? Some kinda program activity? Hedge funds?

 

[airlift]

AYLA CAN YOU HELP ME BETTER UNDERSTAND YOUR LAST POST TO EBBNFLOW REGARDING HIS EXPERIENCE IN THE MAY 2006 DOWNTURN? (Pardon the Capital letter, there was no need for me to emphasize this)