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Bull Pen - Fall 2006
- Thread starter Griffin
- Start date
Griffin
Well-known member
The question of which of these funds is lagging, and has room for growth, (as your charts point out) is a function of the time frame. Focus on the shorts.
I look at 14 Aug as the start of the recovery (although, I did not actually begin to seriously rely on the S fund until a week later, I had been sitting in the C in a holding pattern). By 14 August, the I had made some substantial gains, but it was not a recovery pattern - more sideways then anything. Granted, the I opportunity did pan out very well for some. So, in that sense, the S was way underperforming the I if you started tracking the recovery from late May. However, we did not get an immediate recovery....so I pushed back the start date.
The goal of the analysis was to start from the low point to where it was a steady upward recovery. Sorry for the confusion, does that clarify things?
Attached is the updated spreadsheet.
I did revisit the point at which the I begins to outperform the S.....and in all three previous cases....it was at the point of breaking into the realm of new highs....that it became beneficial.
It's all about me, myself and IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII. After that, I will probably not bother with the S next week.
FS - your short charts would agree? yes
from another web site interesting info:
Checking all off year elections going back to 1962 up until 2002, I found the following. There were eleven off year elections. Nine of the eleven had a decline from sometime in September that took out the low of August sometime by the first or second week of October. One of those nine (1986) made the low in late September. A lot of these were large bear markets so some of the declines were severe. Others like 1994 which so far is the closest in terms of price declines to 2006 into the 4 year low, weren't that bad, but even in 1994 there was a greater than 5% decline from mid September untill early October. The two years that it didn't work was 1970 when after a 30% plus decline ended in May, but there was still a 4% deline from early September to late September, although the low in August was not taken out. The most glaring miss came in 1982 when after an almost 2 year bear market the market bottomed on Henry Kaufmann day and rallied very strongly. It still had a 3% decline from mid to late September, but again came nowhere near the August lows. Most of these examples did have varying degree's of rally into the elections when their bottoms were made. Interestingly 1994 rallied up towards the election from an October low and then made a lower low in December.
Seperately, does the relative weakness in the NYSE mean anything. For the first time since this bull market began in 2003 the NYSE is lagging and not matching what the S&P500 is doing???
Checking all off year elections going back to 1962 up until 2002, I found the following. There were eleven off year elections. Nine of the eleven had a decline from sometime in September that took out the low of August sometime by the first or second week of October. One of those nine (1986) made the low in late September. A lot of these were large bear markets so some of the declines were severe. Others like 1994 which so far is the closest in terms of price declines to 2006 into the 4 year low, weren't that bad, but even in 1994 there was a greater than 5% decline from mid September untill early October. The two years that it didn't work was 1970 when after a 30% plus decline ended in May, but there was still a 4% deline from early September to late September, although the low in August was not taken out. The most glaring miss came in 1982 when after an almost 2 year bear market the market bottomed on Henry Kaufmann day and rallied very strongly. It still had a 3% decline from mid to late September, but again came nowhere near the August lows. Most of these examples did have varying degree's of rally into the elections when their bottoms were made. Interestingly 1994 rallied up towards the election from an October low and then made a lower low in December.
Seperately, does the relative weakness in the NYSE mean anything. For the first time since this bull market began in 2003 the NYSE is lagging and not matching what the S&P500 is doing???
I am; and 6 are beating it.
I = 13.30%.........Fivetears = 12.32%
What am I missing?
Griffin
Well-known member
Wizard of Oz - He's somewhere north of the I, assuming he had a good week. It was not my intention to slight anyone, I simply pulled the names from the top of Rokid's list. There could be other's if they had a stellar week.
FundSurfer
Well-known member
I think those were up to date calc's. I think FT has said his actual YTD is greater than what is in the tracker since he forgot to post a couple moves or had moves in early January prior to starting being tracked. (If this is what you are referring to FT, you get a pat on the back but ya ain't official - I believe ya but you haven't been tracked to that level.) Wizard of OZ started in March and is on a different list which is why Griffin missed him initially.
Wow, that doesn't give those following much to go on. Two are completely defensive right now and the others couldn't be more aggresive. :blink:
Thanks for compiling this Griffin!
FundSurfer
Well-known member
It gets worse:
Griffin and Wheels both dove for the safety of G.
Show-me went 50%G and 50% I.
WizOz went to I.
At least it is either G or I at this point.
Griffin and Wheels both dove for the safety of G.
Show-me went 50%G and 50% I.
WizOz went to I.
At least it is either G or I at this point.
Griffin
Well-known member
I made an error on this - the I was at 12.51% and if S&S is correct on the $.10 loss, were down to 11.94%, but the rest of the numbers should be upto date (not counting today).
That is in fact the case, FS. My TSP Talk Excel Tracker has me at 14.67% as of COB yesterday. I am quite pleased with my luck, but disappointed (in hindsight) I took a brief absence from the MB earlier this year. This being my first exposure to an internet message board, I learned I needed to grow some much thicker skin. In this first year... I've learned to truely admire this community of individuals, and appreciate the diverse opinions generated within it; good or bad... and not take things too darned personal anymore. While my investment standing remains unofficial for the remainder of this year... my new found respect for the numerous active members of this MB is... OFFICIAL.
PS: Griffin & Wheels popped over to the G.
I found this little gray wheel on the mouse. Funny thing makes the page go up and down, and I see ya caught this earlier. :embarrest:
Griffin
Well-known member
This is something I wrote a few days ago but did not post, because it's length and kind of confusing, so feel free to skip it:
I had been talking about the cup and handle for several days prior to this last pullback. I did not think that we would see new 52 week highs anytime soon on the S&P 500, due to pending economic slowdown and/or recession (everything I talk about here refers to the S&P 500 - which is what I use as the baseline for all my decisions – although in reality I will play the DWCP). Going into this latest pullback, I was calling it a handle (the last pullback before the big breakout if your not familiar with a cup and handle). However, on Monday, after we made a significant pullback in just two short days, followed by a slightly positive day, I began to think that this was simply the precursor to the rally that would close in the last side of the cup and bring us even with May’s highs. The problem with that theory was that would mean we would get a nice pullback from May’s highs followed by a breakout that would take us into something close to a 7% rally from there (in theory, the breakout should be on the order of magnitude of the cup). Given the financial circumstances, I concluded that was absolutely preposterous. We would be talking about something close to 1410. The other problem with that, is in order to close in the cup we would have to catapult to May’s highs in the next couple of days…..absolutely impossible (I thought). So, I went back to the idea that the current pullback would form the handle and we would end up at May’s high, but to do that we need a little more drop, hence my move to the G on Monday – it certainly looked like it was going to be a rough day.
However, here we are two days later…and hello, look at what is happening, we are forming the right side of the cup to come even with May’s high. Unbelievable!!!! Of course this means that the handle has yet to come…...and I still have a whole lot of doubts about us seeing 1410. But, if this is indeed the scenario that develops, then a play on the handle might be prudent - within the next day or so, just in time for the CPI data and more importantly, the Fed…I doubt a no-action by the Fed will lead to a breakdown again – the market is well aware that a slowdown is coming, but the pre holiday season anticipation is upon us – the consumer is looking for a green light to spend and the market for a soft landing.
What I am thinking:
- TSP GO! posted a couple of excellent charts concerning the cup and handle and I totally agree with what he said.
- I raised the spectre of the recovery analysis I did back in May.
- Tom has mentioned time and again, how the market tends to react one way, only to reverse itself within a day or two.
- We came close but did not quite press up on May's highs - I also mentioned somewhere that I believe the market will penetrate that high the first opportunity it gets.
- Fundsurfer pointed out that the I is riding low in it's channel and the S is riding high in the short term.
- Finally, I mentioned in another thread that regardless of what the Fed does it will be interpreted as a positive.
Bringing it all together: This is what I expect, and the way I'll play it.
- I expect tomorrow to be relatively flat as the market awaits the fed decision and begins to consolidate, and is likely to be down (post quad witching Monday).
- The Fed releases it's number's on Tuesday and the market cosolidates a little further with a initial negative gut reaction. This forms the base drop for the handle of the cup and handle formation. This provides the base for the next rally.
- Within a day (or even intraday) maybe two the market comes to the conclusion that the Fed move is positive for economic conditions and reverses it's initial reaction to the Fed and begins the breakout rally, surpassing May's highs within a few days to a week. I expect that this will happen very fast.
- The cup and handle theory states that the shorter the handle, the higher the rally with an eventual top equal to the depth of the cup, in this case approximately 7% on the S&P. I believe a hold strategy during this period is best thing. Also, based on the historical pattern of recoveries, the I-fund is the best fund for this period.
Does this set a record for the most longwinded post?
I had been talking about the cup and handle for several days prior to this last pullback. I did not think that we would see new 52 week highs anytime soon on the S&P 500, due to pending economic slowdown and/or recession (everything I talk about here refers to the S&P 500 - which is what I use as the baseline for all my decisions – although in reality I will play the DWCP). Going into this latest pullback, I was calling it a handle (the last pullback before the big breakout if your not familiar with a cup and handle). However, on Monday, after we made a significant pullback in just two short days, followed by a slightly positive day, I began to think that this was simply the precursor to the rally that would close in the last side of the cup and bring us even with May’s highs. The problem with that theory was that would mean we would get a nice pullback from May’s highs followed by a breakout that would take us into something close to a 7% rally from there (in theory, the breakout should be on the order of magnitude of the cup). Given the financial circumstances, I concluded that was absolutely preposterous. We would be talking about something close to 1410. The other problem with that, is in order to close in the cup we would have to catapult to May’s highs in the next couple of days…..absolutely impossible (I thought). So, I went back to the idea that the current pullback would form the handle and we would end up at May’s high, but to do that we need a little more drop, hence my move to the G on Monday – it certainly looked like it was going to be a rough day.
However, here we are two days later…and hello, look at what is happening, we are forming the right side of the cup to come even with May’s high. Unbelievable!!!! Of course this means that the handle has yet to come…...and I still have a whole lot of doubts about us seeing 1410. But, if this is indeed the scenario that develops, then a play on the handle might be prudent - within the next day or so, just in time for the CPI data and more importantly, the Fed…I doubt a no-action by the Fed will lead to a breakdown again – the market is well aware that a slowdown is coming, but the pre holiday season anticipation is upon us – the consumer is looking for a green light to spend and the market for a soft landing.
What I am thinking:
- TSP GO! posted a couple of excellent charts concerning the cup and handle and I totally agree with what he said.
- I raised the spectre of the recovery analysis I did back in May.
- Tom has mentioned time and again, how the market tends to react one way, only to reverse itself within a day or two.
- We came close but did not quite press up on May's highs - I also mentioned somewhere that I believe the market will penetrate that high the first opportunity it gets.
- Fundsurfer pointed out that the I is riding low in it's channel and the S is riding high in the short term.
- Finally, I mentioned in another thread that regardless of what the Fed does it will be interpreted as a positive.
Bringing it all together: This is what I expect, and the way I'll play it.
- I expect tomorrow to be relatively flat as the market awaits the fed decision and begins to consolidate, and is likely to be down (post quad witching Monday).
- The Fed releases it's number's on Tuesday and the market cosolidates a little further with a initial negative gut reaction. This forms the base drop for the handle of the cup and handle formation. This provides the base for the next rally.
- Within a day (or even intraday) maybe two the market comes to the conclusion that the Fed move is positive for economic conditions and reverses it's initial reaction to the Fed and begins the breakout rally, surpassing May's highs within a few days to a week. I expect that this will happen very fast.
- The cup and handle theory states that the shorter the handle, the higher the rally with an eventual top equal to the depth of the cup, in this case approximately 7% on the S&P. I believe a hold strategy during this period is best thing. Also, based on the historical pattern of recoveries, the I-fund is the best fund for this period.
Does this set a record for the most longwinded post?
I think I've got a couple that blather on even longer.
Coming from someone who knows nothing of which you speak, how likely is it (statistically) that these cups and handles actually form as the theory states.
Griffin
Well-known member
I couldn't find the exact quote, but my reference is "Getting Started in Chart Patterns" by Thomas N. Bulkowski.
I recall reading something like 72%. The trick is distinguishing between a handle and a small consolidation.....of course the handle can be a small consolidation. The distinguishing charateristic which seperates a consolidation from the handle is the rate of growth after the handle forms. Prior to the handle, the growth rate will be very steep, afterwards, it will fall back into the trend leading up to the formation of the cup (i.e. the trend line of the past couple of years in this case).
Birch, that last sentance is why I think you were a little over ambitious in your comment to Mayday that the Dow would reach 12,600 by years end. To do that, would require the Dow maintaining the growth rate of the past few weeks, for next 3 1/2 months with no large pullbacks. Dow 12,000 is reasonable in my opinion.
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