clester's Account Talk

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clester said:
I'm watching for a RSI over 70 on S&P for a 50% sell signal. It's at 68 now so we may get another percent or so before it hits. S fund is only at 61 though. I expect the market to do well through Christmas so any pull back could be another good buying opportunity.
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Can you explain RSI? I'm going to hit google search for a bit to see what I can find, but fill me in if you get a moment as I'm curious. Thanks
 
clester said:
I'm watching for a RSI over 70 on S&P for a 50% sell signal. It's at 68 now so we may get another percent or so before it hits. S fund is only at 61 though. I expect the market to do well through Christmas so any pull back could be another good buying opportunity.
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I am curious, it sounds like you always want to be in 50% in a bull market, even though we are really close to being overbought which might trigger a pullback. Am I correct and if so why? Not trying to be a smart alec, just like to know how other people play.
 
jkenjohnson said:
I am curious, it sounds like you always want to be in 50% in a bull market, even though we are really close to being overbought which might trigger a pullback. Am I correct and if so why? Not trying to be a smart alec, just like to know how other people play.
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I think the theory goes something like this:

If all of your buyers are 100% bought in to equities (no cash left on the sidelines), then there is no one left to buy in. At that point it is theoretically impossible for equities to go up any further. This would be the most extreme of "overbought". On the other side, if everyone has sold their equities, there will be no one left to sell. Therefore, equities cannot continue to go down. That would be the extremely "oversold" side. Again this is just theory. But in theory, you want to buy in when the market is extremely oversold, because it has nowhere to go but up.
 
bmneveu said:
I think the theory goes something like this:

If all of your buyers are 100% bought in to equities (no cash left on the sidelines), then there is no one left to buy in. At that point it is theoretically impossible for equities to go up any further. This would be the most extreme of "overbought". On the other side, if everyone has sold their equities, there will be no one left to sell. Therefore, equities cannot continue to go down. That would be the extremely "oversold" side. Again this is just theory. But in theory, you want to buy in when the market is extremely oversold, because it has nowhere to go but up.
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Seems like you would want to sell 100% at RSI around 70 and wait for it to drop and buy back in 100% later?
 
jkenjohnson said:
I am curious, it sounds like you always want to be in 50% in a bull market, even though we are really close to being overbought which might trigger a pullback. Am I correct and if so why? Not trying to be a smart alec, just like to know how other people play.
Click to expand...

This is correct. In a bull market there is always a bias to the upside and it is harder to trust a sell signal or time it correctly so I just trade the 50% and let the other ride until I get a stronger sell. The RSI is just a contrarian indicator I like to use. Its not a science but for the S&P it usually doesn't stay above 70 long although it can in a strong market. I just like to take a little risk off in that case.

We got close today so it might have been close enough to trigger a pull back, but if it is... it won't be for long IMO. Something like the last pullback. Thats hard for me to play.
 
Feels a little strange with the S&P's outperformance on this latest rally. It's looking top heavy while S fund is just floundering here. Consolidating I guess. I still have a buy though because we are over the 50 DMA and in a Bull market (50 dma above 200 dma).
 
clester said:
Feels a little strange with the S&P's outperformance on this latest rally. It's looking top heavy while S fund is just floundering here. Consolidating I guess. I still have a buy though because we are over the 50 DMA and in a Bull market (50 dma above 200 dma).
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Do you remember what the S fund price per share was when you rentered 100%?
 
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jkenjohnson said:
never mind i looked it up.
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I'm still a little under water on it but back close to being even I think.

I still have a buy. No overbought signals. The recent rally is a good example of why I always keep 50% in stocks during a bull market even if we get overbought. Its going to be biased to the upside. The S&P RSI over 70 is probably my next signal. Watching for a 70+ reading.

I am expecting the rally to extend until Christmas and then some digesting. I think 2014 could be sideways
 
clester said:
I'm still a little under water on it but back close to being even I think.

I still have a buy. No overbought signals. The recent rally is a good example of why I always keep 50% in stocks during a bull market even if we get overbought. Its going to be biased to the upside. The S&P RSI over 70 is probably my next signal. Watching for a 70+ reading.

I am expecting the rally to extend until Christmas and then some digesting. I think 2014 could be sideways
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Still on buy for this week. No warning flags. Still waiting on that 70 RSI :)
 
No changes from last week.Still on buy but close to the overbought area. Probably another percent or 2 from a 50% sell signal. S fund is well below the overbought value of RSI > 70.
 
clester said:
No changes from last week.Still on buy but close to the overbought area. Probably another percent or 2 from a 50% sell signal. S fund is well below the overbought value of RSI > 70.
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Some may be worried about a 2 day sell off but my system still says Buy. If we were to get to the 50dma it will be a good buying opportunity and I would expect a bounce. I expect good things this month before we slow down for next year. We'll see.
 
clester said:
Some may be worried about a 2 day sell off but my system still says Buy. If we were to get to the 50dma it will be a good buying opportunity and I would expect a bounce. I expect good things this month before we slow down for next year. We'll see.
Click to expand...

Market is all over the place today.
 
clester said:
Some may be worried about a 2 day sell off but my system still says Buy. If we were to get to the 50dma it will be a good buying opportunity and I would expect a bounce. I expect good things this month before we slow down for next year. We'll see.
Click to expand...

That's down around 1750 or so?
 
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