clester
Well-known member
Well, maybe it will hit it today. A little too steep to try to catch the falling knife. Good thing I'm out of trades. Also glad to have 50% in G fund. Woulda been nice to be 100%
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clester's Account Talk
- Thread starter clester
- Start date
Well, maybe it will hit it today. A little too steep to try to catch the falling knife. Good thing I'm out of trades. Also glad to have 50% in G fund. Woulda been nice to be 100%
clester
Well-known member
It feels like people may be panicking today. I realize many here are now very stressed out and losing lots of money. Those of us that have been around awhile have been through these kid of markets before and experienced the same sense of your life savings going down the tube. In 2000 and 2007 the drops were about 50% I think. It stinks. We came back every time. It may take a long time or it may take a few months this time. Just realize thats its not the end of the world. If you're freaking out then you have to force yourself to turn off the TV go outside and get away from it. Watching CNBC all day will aggravate you're feelings. You have to think logically and not let the fear take hold of you.
Now, my system still has me in 50% because we are in a bull market (50 dma is above the 200 dma). That will change soon I think as they are converging. In a bear market, my system says to be max 50% stocks. Also, a RSI of below 30 is a oversold buy signal. But only after a bounce and preferably bounce back above it. A reading of 20 though is extreme and triggers a buy too. The problem this time is how steep the drop has been. I need to see that abate before giving any buy signal. It will be soon I think. One sign will be big volatile swings in both directions. Bounces will get sold for a while as folks that didn't get out try to cut they're losses while bargain hunters try to cash in on cheap stocks. The winners here are probably the big fund managers as they can push the market around with huge amounts of money. Don't get caught in they're game.
clester
Well-known member
One thing I've found is that when the RSI tops or bottoms the stock price will rebound but usually make 1 more lower low as the RSI is climbing back up. So, it doesn't hurt to wait for that. We hit bottom in RSI I think so I'm interested in seeing if that lower low plays out.
clester
Well-known member
If you mean do I keep a running tally of when its right and when its wrong then I don't. I do make mental notes about and consider changes. The only quantitative means I use I guess would be how my returns are vs the S&P. I have made adjustments over the years. My system tends to smooth out the ups and downs. Takes some of the volatility out. That means I probably won't be at the top of the leaderboard but I'll get more consistent returns year to year.
clester
Well-known member
Meaning there is a divergence. Price is still going down but RSI turns up. I'm not sure that you can time that or if its worth trying to time.
We have a one day bounce and RSI is just below 30 so ideally we would see RSI back above 30 and perhaps another follow through day. I would expect the market to climb back up to the 200 or 50 DMA before a big test. This doesn't feel like a long term bottoming process but more of a V shape at least up to the moving averages. There will be people selling that got caught up in the swoosh and will take the opportunity to lighten up there. So, I think September could be volatile but then October we will have the beginnings of a nice rally.
Lakebound
Member
userque
Well-known member
LOL...ummm...yeah...there's the rub.:smile:
clester
Well-known member
We will have a huge bounce as soon as the we stop going down. Maybe today. The RSI on both C and S funds are at extreme oversold readings. Short covering like this morning will push us up. I would love to have a trade left. I'm not sure it will wait until September 1. I expect to be a buyer unless we get back up to the moving average test by then.
Another issue though is that the 50 dma will cross under the 200 dma and that indicates a bear market. Unless we climb back up fast then it's a big issue. I think it will climb fast though.
Another issue though is that the 50 dma will cross under the 200 dma and that indicates a bear market. Unless we climb back up fast then it's a big issue. I think it will climb fast though.
clester
Well-known member
Well the fast climb is here. This is the problem with 2 trades a month. I would have bought already or at least by today.
We should be able to climb up to the lower moving average (50 or 200) before a major test. Who knows where we will be by noon September 1!
FogSailing
Well-known member
History tells us we're in for several volatile months Clester. This is a time to be very careful. I think we'll have plenty of opportunity over the next 8-12 weeks.
FS
FS
clester
Well-known member
Yes I agree September could be volatile but we may have pushed the rocky seasonality up to this last week. I just go with my system. But you are right in being cautious
clester
Well-known member
Since all funds are in bear market or about to be, I'm considering going 100%G fund for the first of the month and see what it looks like later this week. September may be volatile and I'm expecting oct-dec to be good so I will have some buying opportunities in September.
Also, as I mentioned before as the RSI climbs out of oversold there is often a lower low made in price.
In a bear market my system says to be in a max of 50 % so unless there is a compelling reason to go against that then I will follow it.
clester
Well-known member
I didn't expect another down day this big as futures are down about 3%. The retest of the low and probably a break of it is probably coming. If so then it will be a great place to buy some stock. Especially if the RSI gets below 30 again. The rate hike decision is on the 16th I think, so we'll probably have volatility until then.
clester
Well-known member
I don't think its time to buy yet. Futures up but we may have sellers this afternoon. We will probably bounce around for a couple weeks. I need the RSI to drop to 30 again. A test of the low or a break of the low price would be perfect setup.
Lakebound
Member
"Subscribed", "following", "riding your coat tails", whatever you want to call it. But, I am with you. I think for one thing we need to get beyond the whole "interest rate" issue one way or the other. Personally, after the "China Syndrome", I don't think the markets will react as poorly to a rate hike as they have to the entire devaluation issue.
But what do I know?, I'm in G fund.
Frank
clester
Well-known member
It's funny but all the Geopolitical, Fed, economic etc. news is always there. There is always something to worry about. Thats why I like using technicals. It simplifies things. Also, I have decided that using too many technical parameters just confuses things. So, I use just a few simple ideas to make my decisions on.
The other stuff is interesting and I follow it but now its just background noise to me.
I will be looking for a lower low but a higher RSI to trigger a buy. This creates a divergence and usually indicates things are turning around. Be aware though that we are now in what my system defines as a bear market (50 dma is below the 200). Bias is now to the downside so I usually only buy 50% unless its very compelling.
We just have to be patient. I think we will get it this month. Maybe around the Fed meeting.
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