Bull Pen - June 2006

[Griffin]

Dead Cat Bounce?

The last week I lost over 4.5%. I am now sitting in the F.

I used stops, I didn’t get emotional – so where did I go wrong?

The answer – as we have all done so many times – I didn’t take my own advice. This goes to the thread S&S started “riding it out”. As I said then, you can’t play the day to day with TSP due to the handicap of the deadline. I bought in….without waiting for the new low to be retested. I was looking short term, day to day – wrong answer.

That was the mistake – I knew damage had been done, and I did not wait for the retest. Yesterday the S&P touched just below 1220, was this serious, or do we ignore it?

The Yield Curve is inverting again. Some are arguing that the market has accounted for inflation, but has it priced in Recession, (sure sounds to me that the Fed fully intends to overshoot).

So if this bounce takes the S&P to 1270 as a dead cat bounce, what are you missing if it’s not and it goes to the top? 1290-1300? (Do you really think it’s going all the way back up to 9 May?) Is it worth the risk? My answer is no. The I is down 17%, the S 14% but the C is still only down about 7%. So from the perspective of the S&P this has not been a major correction and the S&P is the real standard. Everything else is relative.

Even if this is not a dead cat bounce, I will probably stay out for a couple of weeks until the new trend establishes. Unfortunately, I will not be able to post next week during the day and possible not at night either.

 

[Mike]

I'm incredibly bullish right now. I don't think it's as easy as "there was the bottom two days ago, we're going straight up from here", though...

 

[Griffin]

I don't think it's as easy as "there was the bottom two days ago, we're going straight up from here", though...

Mike,

I totally agree with that, I'm all about making money, if your comfortable go for it. My whole strategy is based on following the patterns and indicators within a range. I'm not sure where that range is right now, that is why I want some more information, before I proceed - I'm not worried about getting left behind by the market, so I don't feel the need for any urgency at this time. We will see two day's ago price's again this year I have absolutely no doubt about that - call that a prediction if you want.

 

[robo]

Griffin,

Around 1270 S&P 500 my plan is to go from 75% long to 30% or less. I might change my mind, but that is my current plan. This Market is moving up to fast and that will cause quick profit taking. The shorts will pay up today, and new shorts will be placed. Volume could be high due to triple witching. The lows will be tested a couple of times before this thing is over. However, Mr. Market will do what it wants and Mike could have it right!!! Many at work lost lots of money and went to the G Fund. Some will buy back when we are overbought again. That's why the point you made above is so very very true! It's best to play the Trends. The Trend is your friend!!


Good Investing/Trading!

 

[Griffin]

I got a PM today that got me thinking and sharpening my horns. Note: for those that have considered sending me a PM, I appreciate them, I do try to be responsive, I’m not adverse to any constructive criticism. I got hide not skin .

Earlier today, I mentioned the market pricing in inflation but not pricing in a recession. I want to clarify, were not in a recession so the market has no reason to price in a recession, at least not yet. But I think that economic slowdown is a fairly reasonable assumption, and some of that is built or is going to be built into this next series of fluctuations.

I also said that my strategy is based on playing the range and as Robo mentioned the Trend is our Friend. Yeap, that would be the ticket.

In the attached chart, I have what I think is a reasonable projection for the DWCP, which is my target fund to play, the I being the alternate, depending on the dollar. There’s a lot of lines so let me group them, the green and red represent the old trend; the blue and orange represent the new trend. The red and orange represent the general trends and the dividing point between healthy and problematic zones. So a positive day tomorrow would take the DWCP and the S&P 500 into the healthy zone of the new trend.

What I also think lends credence to this projection (got your ears on Birch?) the trend line of the DWCP would have virtually the exact same growth rate as the S&P 500 (see the lower chart). That makes sense given the developing economic conditions and what we have seen over the past couple of days.

This is not a replacement for the projection I threw out there a couple of days ago, that requires the channel of the S&P 500 to be broken (didn’t happen yet).

With all that said, If tomorrow goes well into the afternoon, I may move into the (Birch you ready ) C-Fund, because I like the stability, especially because I am going to have limited internet access over the next week.

If I decide to do this, I am not going to try and peg the top, this would be a quick play. But as someone pointed out in an article, tops are usually formed more slowly - i.e. they give you some grace.

 

[JOVARN]

Nikkei jumps 2.5 pct as U.S. economy worry eases

June 16, 2006

TOKYO (Reuters) - The Nikkei average rose 2.51 percent on Friday as easing concerns about a rise in U.S. rates helped restore investor confidence, helping shares in brokerages such as Nomura Holdings Inc. to rise.

The Nikkei was up 363.48 points at 14,834.24 as of 0008 GMT, adding to a 1.13 percent rise on Thursday.

The TOPIX index was up 2.57 percent at 1,524.16.

 

[Griffin]

Money Flow from yesterdy, 18 participants

G- 30.72%
F- 17.28%
C- 9.89%
S- 13.78%
I- 28.33%

If you haven't seen Richard Jeni's "Steaming Pile of Me" it's worth checking out - hysterical. Quote "a bunch of fence sitting, half in half out......" of course he was talking about politics. Apparantly were not the left or the right, we're in the middle.

My point - the money flow hasn't been particularly decisive in either direction.

As you can probably guess, I'm sitting on my F.

 

[robo]

Griffin,


The TA's and services I get are about the same:

1 Long the DOW 100%

1 Long the S and I Fund

1 Long the S&P 50%

1 Long the QQQQ's and the S&P 50% each

3 Cash

1 Shorting QQQQ's and the S&P 50% each

1 Shorting QQQQ's 100%

I Shorting sectors and Long some International ETF's

Take your pick. The cash guys were in cash before the sell-off!!

Some of the longs have lost plenty since the sell-off, and are holding.

Some of the shorts have done ok. The one 100% short the QQQQ's went short the day before the 2 DAY rally. OUCH! HE THINKS WE ARE HEADED WAY DOWN AND WE HAVE STARTED A NEW BEAR MARKET. His comments are he will still short into the 4 year cycle low in October. Some believe another 10% lower to go. You can see why I don't follow any one guy and only use them for reference.

FOLKS BE CAREFUL BEFORE FOLLOWING THE RECOMMENDATIONS OF A SINGLE TA. That's what makes this board so good. I should be paying the Top 5 on this board.

I do WATCH, and READ their opinions and IFT'S...

HOWEVER, SOME OF THE ABOVE GUYS ARE LONG TERM AND DON'T MAKE MANY MOVES!!!

 

[Machinist Mate]

I dont expect you would accept a big Kodiak Bear with HORNS.

 

[Griffin]

I dont expect you would accept a big Kodiak Bear with HORNS.

I noticed your at a 70% G position, was that statement intend to be an insult or a compliment?

 

[Griffin]

Here’s the top 12:
Name YTD Current Allocation
1. Fundsurfer 10.99% 100% G
2. Wizard of Oz 10.31% 100% G
3. Faustus 9.57% 100% G
4. Sugarandspice 8.95% 100% I
5. Wheels 8.05% 30% C, 40% S, 30% I
6. Dave M 7.83 % 79% G, 5% C, 5% S, 11% I
7. Pointman72 6.91% 50% G, 50% F
8. Safetyguy 6.71% 100% G
9. Fivetears 6.51% 100% G
10. Griffin 6.31% 100% F
11. Nnutt 6.15% 60% G, 15% F, 25% I
12. Show me 6.13% 100% G

Average Allocation is:

G – 65.75%
F – 13.75%
C – 2.92%
S – 3.75%
I – 13.83%

Looks like a bearish outlook from among the top 12.

I would like to get your thoughts -
waiting on a retest? (my answer is yes)
expecting lower lows in the next couple of weeks? if so, why? (my answer - maybe)

 

[Show-me]

I would like to get your thoughts -
waiting on a retest? (my answer is yes)
expecting lower lows in the next couple of weeks? if so, why? (my answer - maybe)

Ditto. Nimble is a good word and so is patience. Two things I need to work on. Nap time!

 

[robo]

Griffin,

I think retest, but this market will have wild swings the rest of the Summer. It could go up before it goes down. In my opinion it will see tough resistance at the 1260's to 1280's, due to many sellers headed for the exits....

We need to figure out the trading range so we can make some money off of it this summer. It will show us the way soon, 1220's could hold and 1260's to 1280's will be tough for this technical damaged market!!!! Might be possible to make some money oversold/overbought in this range. We shall see.

Oh, I'm under the top 12 so my opinion has not been good lately! I played way to conservative the first part of the year. Then comes the Big May sell-off, and I played to much I Fund for tooooo loooong!!! I'm in the rebuilding stage now!! Might put on some shorts next week if we do rally. TSP in G Fund, but other accounts still long some in the S&P.

Good trading/Investing

 

[FundSurfer]

Looks like a bearish outlook from among the top 12.
I would like to get your thoughts -
waiting on a retest? (my answer is yes)
expecting lower lows in the next couple of weeks? if so, why? (my answer - maybe)

I give credit to milkman. He taught me what goes up must come down. Make money on the fluctuations, don't be too greedy. I use his "old" system for the most part with a couple of my own tweeks. His system basically looked at the average movement up and down cycle and looked to move in and out with the cycle (he concentrated on just the S fund and I try to watch C, S, and I). Right now we don't have a cycle. Fear moves this market very quickly, too quickly for us. I'll wait for either a cycle to appear or for a really hard move down which will likely rebound before getting back in. I expect a move down next week. News this weekend could make that happen on Monday.

I think summer tends to be down or sideways. Because of that I'll try to be cautious and try not to get too greedy. So far my mistakes this year have been moving on emotion and getting greedy. As to the lower lows, I'm not sure, but I do think the market will take back most of Thursdays gains before moving up higher.

 

[Dave M]

Fear Is It

But fear lessened this week when we became assured that the Fed would raise rates. That released pent-up demand and buying occurred. I am not bearish but defensive. I was 100G until two days ago. Gradually I am adding to my position, I want this to be a good quarter.

Dave

 

[Griffin]

Griffin,

Oh, I'm under the top 12 so my opinion has not been good lately!

Good trading/Investing

Robo, I did not intend the request to be exclusive. I've spent most of the year in the middle twenty so in no way do I consider the pole standing to be an exclusive club. The straight buy and holds dominated the tops slots for the early part of the year, and now we are seeing some of the more conservative members get their day.

I was targeting the question towards those that have a strategy of playing the market fluctuations (actually, that is who I have targeted this whole thread towards), of which you are certainly one. I am confident you will walk away from this year with another success under your belt. I always appreciate your input.

Fundsurfer, I give a lot of credit to Milk too, his success coupled with his positive and humorous approach are a big draw for this site. You have been extremely successful this year. What do you rely on more heavily, indicators, charts, news? I would appreciate hearing your method.

It looks like were all feeling the frustration of not being able to peg the range of this market. I find that very helpful. It should be a relief to a lot of people knowing that there not missing the boat on some inside secret.

 

[robo]

Griffin,

I didn't take it that way at all my friend! Since I don't post my moves I wanted to let the folks know that my return was under those 12. Those are excellent returns for this market. Those returns have beat some of the professional guys I pay money to.

I just haven't been in sync lately with Mr. Market. That is what I meant by my comment. Took a real beating in my brokerage account, but almost back to even. Man was I down!!!!!

I pointed out earlier I'm trying to build some gains back up.

NICE JOB BIG 12!!!! THAT IS WHY I CONTINUE TO READ AND FOLLOW MEMBERS ON THIS BOARD....

Take Care!

Good Trading/Investing

 

[Rod]

I played way to conservative the first part of the year. Then comes the Big May sell-off, and I played to much I Fund for tooooo loooong!!! I'm in the rebuilding stage now!!

My thoughts exactly!

If I wouldn't had been suckered into (I), I'd at least be 5% YTD from simply remaining in (G).

 

[Rod]

Right now we don't have a cycle.

You got that right!

I can't rely on my "system" I tested in 2004 which did fairly well. I simply averaged out all the funds with the days each fund performed best and came up with these allocations:

Monday: 100 G

Tuesday: 100 S

Wednesday: 30 G 50 S 20 I

Thursday: 100 G

Friday: 50 S 50 I

It worked like a charm for awhile until the presidential elections threw a wrench into it. I discuss it beginning here:

http://www.tsptalk.com/mb/showthread.php?t=349&page=6

God Bless

 

[robo]

Some thoughts on the Bearish outlook from the 12: Ya, that even sounds cool!

The bearish outlook from the 12 could be a Contrarian Indicator.

I follow a couple of sentiment sites and the Senticator is Bullish. That means we could be setting up for a big rally. ( To many Bears and Shorts! )

The boards and polls show way to many Bears and lots of shorts. Plenty don't believe the rally has much running room.

If you follow sentiment then it suggests we may get a big rally. This is what Tom was pointing out last week in his comments.

The question is do we get another decline first.