Bull Stampede

The Top 50 just keep getting more bullish.




Total stock allocations for this group are now at 88.6%, with the S fund favored far more than any other fund. That's not much of a surprise since that's been the biggest gainer for some time. But the dollar's strength early on this month held the I fund back, which is why we have very low I fund exposure in this group. But if the dollar can begin to trend lower now, the allocation mix may change.




While the Top 50 were pushing more chips into the pot, the Total Tracker shows the herd backed off its stock allocation by more than 10%. Profit taking? Or wary of a mid to late January swoon?

Hmmmm...I see the bond fund went from 4.97% last week to 12.07% this week. Now I know what caused the shift. :laugh:

 

[FireWeatherMet]

Interesting Coolhand,

One the one side, seems we are overdue for a pullback, maybe a significant one, given that the last time the S&P fell below the 50 day EMA was back in late August, as well as the index now about 130 pts above its 200 Day EMA along with the VIX down near 15 (pointed out by Fedgolpher). All these things cry out "Abandon Ship".

But on the other side, your graphs show that a big chunk of investors (those outside our top 50) are still largely on the sidelines. That represents about 90% of our board. This suggests that there is much more money out there too keep this rally going...end echoes the Sentiment Survey trend of staying in the game. Also the political/large scale economic picture is very pro business...a Republican House (uggghh, I'm still in rehab over that one:toung echoing many pro business issues like health care repeal, less regulation on business. Also tax cuts are in place...not just extending the Bush tax cuts but also the new, temporary 30% cut off an individuals FICA contribution. Now earnings reports are due in this week and should continue to bring good news on the corporate side.

So in the big picture...everything macro-economically is in place (tax cuts, good economic news) for a continued surge upwards. But the charts suggest an overdue significant pullback ( 5% or more).

This should be a very interesting week and should set the tone of where we are headed. If there is going to be a drop of 5% or more, we should see some topping action first (crown or head pattern). If we just see an abrupt drop off the peak, it should only be a brief one, and not one worth using a precious IFT for saving profits.

Thanks for running the stats and graphs Coolhand.

 

[coolhand]

The market has been flashing warning signs for awhile, and they just aren't going away. But while we may see some weakness soon, this has been a very resilient market with many folks not participating. And the Fed still has its hand in it too.

I agree with you that any pullback may not be deep or long enough to warrant moving out of the market and that conditions are such that we could have several more months of upside.

Interesting Coolhand,

One the one side, seems we are overdue for a pullback, maybe a significant one, given that the last time the S&P fell below the 50 day EMA was back in late August, as well as the index now about 130 pts above its 200 Day EMA along with the VIX down near 15 (pointed out by Fedgolpher). All these things cry out "Abandon Ship".

But on the other side, your graphs show that a big chunk of investors (those outside our top 50) are still largely on the sidelines. That represents about 90% of our board. This suggests that there is much more money out there too keep this rally going...end echoes the Sentiment Survey trend of staying in the game. Also the political/large scale economic picture is very pro business...a Republican House (uggghh, I'm still in rehab over that one:toung echoing many pro business issues like health care repeal, less regulation on business. Also tax cuts are in place...not just extending the Bush tax cuts but also the new, temporary 30% cut off an individuals FICA contribution. Now earnings reports are due in this week and should continue to bring good news on the corporate side.

So in the big picture...everything macro-economically is in place (tax cuts, good economic news) for a continued surge upwards. But the charts suggest an overdue significant pullback ( 5% or more).

This should be a very interesting week and should set the tone of where we are headed. If there is going to be a drop of 5% or more, we should see some topping action first (crown or head pattern). If we just see an abrupt drop off the peak, it should only be a brief one, and not one worth using a precious IFT for saving profits.

Thanks for running the stats and graphs Coolhand.

 

[EmoDx]

Frixxxx Moderator Re: What do you think, F fund's future?
Surge of Money From Bonds Could Stifle Lending- AP Americans are leaving bond mutual funds at the fastest rate in more than two years. U.S. investors pulled $8.6 billion out of bond funds in the week ended Dec. 15, the largest withdrawal since October 2008 when financial markets were in free-fall.

The bond bubble has burst. While the F fund is not in a free fall, it is in a steady decline. All the money won't make it into Equities, but a good portion will. The FED is meeting it's goal of driving people out of bonds into riskier assets.

I know a lot of people don't believe in buy and hold. But between money rushing into Treasuries from the FED, and money rushing out of Bonds, this may be a great year to buy and hold. I would like to hear what others think about this.

- Emo

 

[coolhand]

That's the common expectation. But I'm not so sure the current bond market direction can last over the long haul (more than 6 months). There's still a lot of unknowns such as unemployment, state debt levels, Eurozone debt issues, China monetary tightening, etc.

I do think we've got a ways to go with the current bull run, but I can't see it lasting into year-end even with an election year coming up.

The bond bubble has burst. While the F fund is not in a free fall, it is in a steady decline. All the money won't make it into Equities, but a good portion will. The FED is meeting it's goal of driving people out of bonds into riskier assets.

I know a lot of people don't believe in buy and hold. But between money rushing into Treasuries from the FED, and money rushing out of Bonds, this may be a great year to buy and hold. I would like to hear what others think about this.

- Emo