coolhand's Account Talk

[coolhand]

Here's a chart of the Wilshire 4500 (S Fund). It's a longer term perspective, but I'm thinking this index sees a pullback to at least the 710 area in the months ahead (late Spring, early Summer).

Be wary of the weakness the market is currently experiencing. It could be a prelude to new highs in the not-to-distant future. I'm just guessing, but the current weakness may be allowing the big money to reload while all eyes are on the potentially "devastating" sequestration. Fear is ratcheted up. Everyone starts running for cover. Then, at the last minute, our politicos save the day and the market rallies to new highs as Armageddon is averted.

 

[Boghie]

CH,

I don't think the politicos will save the day... It will just happen, then the fight over the Continuing Resolution will define spending priorities... I think we are in a time of gubmint retrenchment. And, I think that is a very wise thing. It will hurt, but it won't be the stupid furloughs and stuff. Hopefully, much of the bureaucratic garbage will be flushed away as we are forced to do more with less.

So, expect a pay period of furloughs, a smattering of gubmint shutdown, and an acceptance that budgets must be made and adhered to.

 

[coolhand]

CH,

I don't think the politicos will save the day... It will just happen, then the fight over the Continuing Resolution will define spending priorities... I think we are in a time of gubmint retrenchment. And, I think that is a very wise thing. It will hurt, but it won't be the stupid furloughs and stuff. Hopefully, much of the bureaucratic garbage will be flushed away as we are forced to do more with less.

So, expect a pay period of furloughs, a smattering of gubmint shutdown, and an acceptance that budgets must be made and adhered to.

Of course, I'm just guessing what will happen just like so many others. I don't agree with the "do more with less" though. High level officials are even backing away from that tired old saw. If they allow sequestration to happen, we'll be doing less with less. You can't get blood from a turnip, but I'm sure some of them will try. :notrust:

 

[Cactus]

You can't get blood from a turnip, but I'm sure some of them will try. :notrust:

Really!!! Then you've never worked at the IRS. An old joke from a friend who used to work their. He said someone had a display with a vial labeled turnip blood. :nuts:

 

[nnuut]

We are the Turnip! I think they have taken enough.

 

[Khotso]

CH,

I don't think the politicos will save the day... It will just happen, then the fight over the Continuing Resolution will define spending priorities... I think we are in a time of gubmint retrenchment. And, I think that is a very wise thing. It will hurt, but it won't be the stupid furloughs and stuff. Hopefully, much of the bureaucratic garbage will be flushed away as we are forced to do more with less.

So, expect a pay period of furloughs, a smattering of gubmint shutdown, and an acceptance that budgets must be made and adhered to.

Don't forget elimination of tax loopholes!

 

[coolhand]

That end-of-day spike lower may be an ominous sign for the market given our Pols opted to do nothing prior to March 1st. But there's still a bid under this market and that's kept this market afloat in a big way. I had opined in my blog that the big money might reload early in the week, which they did, and launch this market again later in the week. They certainly did a reload on Monday, although that wasn't apparent till well after our noon cutoff and I also thought we'd get more downside than we did. But they took the market higher the very next day and all the way through most of Thursday before that end of day sell off. Next few days are probably going to be very interesting. We'll now see how much the market actually cares or does not care about sequestration.

 

[coolhand]

My indicators are in an intermediate term sell condition, but this market does not appear to be ready for a sustained decline. Not that it can't happen, but there's still plenty of strength putting upward pressure on price. Until that strength falls off, the downside will not come easily.



The S&P 500 is approaching its high of the year and has closed in an area of minor resistance. I anticipate it will tag a new high this week as RSI is rising as is MACD. If that happens it will certainly frustrate those in cash (G fund).



The dollar is on an upside tear as a fresh multi-month high was hit today. This kind of strength suggests there's more upside to come.

 

[bmneveu]

My indicators are in an intermediate term sell condition, but this market does not appear to be ready for a sustained decline. Not that it can't happen, but there's still plenty of strength putting upward pressure on price. Until that strength falls off, the downside will not come easily.

View attachment 22723

The S&P 500 is approaching its high of the year and has closed in an area of minor resistance. I anticipate it will tag a new high this week as RSI is rising as is MACD. If that happens it will certainly frustrate those in cash (G fund).

View attachment 22724

The dollar is on an upside tear as a fresh multi-month high was hit today. This kind of strength suggests there's more upside to come.

You think the dollar and S&P will continue to rise together?

 

[coolhand]

You think the dollar and S&P will continue to rise together?

Historically speaking, no. But there's a lot of intervention in global markets and that's creating distortions in various ways.

 

[coolhand]

The intermedate term is trying to turn back up again, but I remain in a sell condition in that time frame. OPEX is next week. I'm thinking we've got some volatility coming very soon. And I still think dips will be bought.

 

[coolhand]

The Intermediate Term turned back to a buy on Friday, which didn't surprise me considering the high level of liquidity that keeps coming into the market. The one ugly down day we had about two weeks ago coincided with a brief reduction in that liquidity, but it remained in expansion at lower levels and gradually turned back up in the days that followed. That's where the strength is and of course it's forcing emotional money to follow it now. That means I'll remain cautious with TSP since there's no telling when the market might turn on some news driven event (always has to be an excuse for these things ). Weeks of gains can disappear much faster than they were accumulated. But in all honesty, there's really no telling when that might happen. It could be next week or next month or months from now. So I'll be taking a modest position in the S fund come Monday. But just so folks don't think I'm being overly cautious, my IRAs are have been exposed to stocks throughout this run, so I'm still benefiting from the rally. I just prefer to hedge with my TSP account given it's limitations.

One stock that I already own, but looking to add shares soon is British Petroleum (BP).



BP Amoco PLC is at multi-month lows and trading at an attractive 11.2 P/E ratio. It also issues a quarterly dividend of about 5%. If this company settles out of court at some future point and is able to put that Gulf oil spill behind it, this thing could take off several points at the least. It may drop lower yet, but there's no guarantee of this as it's bouncing around near support now. The 21 dma crossed the 200 dma last week. That looks bearish, but I really think this a stock worth holding for the longer term given that nice divy. And it's a big company with a lot of resources.

 

[coolhand]

I mentioned a week or so ago that I thought BP was looking mighty tempting for longer term traders. Since then, it's beginning to show some life again.



Note that support held in the $40 area. RSI is rising nicely and the 28 dma is curling up. Friday's action saw a gap higher (red arrow) on some news of an $8B share buyback. That gap may get filled, but I'm relatively confident this stock will be biased higher at this point. I picked up more shares at $40.44 to take advantage of what I considered to be good growth potential (4.9% quarterly dividend helps too).

Now if they could settle that oil spill out of court it could be off to the races.

 

[coolhand]

Here's another stock that looks ready to move back to the upside.



Entergy Corp Hldg Co. is showing strong support in the $61-$62 area. RSI appears ready to move back up. The company has a P/E ratio of just 13.1, which is low compared to most other stocks. It also pays a handsome quarterly dividend of about 5.4%. I will be adding this stock to my portfolio today.

 

[coolhand]

The intermediate term system I'm watching rolled over to a sell yesterday. BUT, liquidity remains very high. This does not feel like a top. The last sell signal was timely...for about 1 day. And then it was promptly whipsawed. I'm not saying that will happen this time, but there's just not enough evidence that the market is rolling over for real this time. It is the end of the month and fresh IFTs are available Monday, so one could lighten up just to play it safe, but I don't think I'd go all cash.

 

[MrJohnRoss]

The intermediate term system I'm watching rolled over to a sell yesterday. BUT, liquidity remains very high. This does not feel like a top. The last sell signal was timely...for about 1 day. And then it was promptly whipsawed. I'm not saying that will happen this time, but there's just not enough evidence that the market is rolling over for real this time. It is the end of the month and fresh IFTs are available Monday, so one could lighten up just to play it safe, but I don't think I'd go all cash.

Yeah, that and the fact that the first day of the month is typically a very strong day for the markets has me wanting to stay in for at least a few more days.

 

[coolhand]

I just posted this stock last week and said it appeared poised for an upside move. See below for new chart.

Here's another stock that looks ready to move back to the upside.

View attachment 23074

Entergy Corp Hldg Co. is showing strong support in the $61-$62 area. RSI appears ready to move back up. The company has a P/E ratio of just 13.1, which is low compared to most other stocks. It also pays a handsome quarterly dividend of about 5.4%. I will be adding this stock to my portfolio today.

As I anticipated, ETR did indeed make a nice move off support. And while it's currently at resistance, it tacked on more than 1.5% today in spite of a decidedly down day in the major averages. That implies it's headed higher (not to mention the string of white candlesticks and green volume indicators). I'm up more than 4% since last week on this stock alone. And there are others that I have not posted where I'm up more than 10% (PCG, PEG, ALE, SO). I don't trade triple leverage funds much these days. I find better action in high quality stocks that appear to be hitting support levels. And every one of these stocks pays a nice dividend to boot. It's a much less stressful way to manage a portfolio for those who are not looking for high stakes action. Just sayin'.

 

[JTH]

I just posted this stock last week and said it appeared poised for an upside move. See below for new chart.




View attachment 23182

As I anticipated, ETR did indeed make a nice move off support. And while it's currently at resistance, it tacked on more than 1.5% today in spite of a decidedly down day in the major averages. That implies it's headed higher (not to mention the string of white candlesticks and green volume indicators). I'm up more than 4% since last week on this stock alone. And there are others that I have not posted where I'm up more than 10% (PCG, PEG, ALE, SO). I don't trade triple leverage funds much these days. I find better action in high quality stocks that appear to be hitting support levels. And every one of these stocks pays a nice dividend to boot. It's a much less stressful way to manage a portfolio for those who are not looking for high stakes action. Just sayin'.

I couldn't agree more, I'll take a decent stock over leveraged ETFs all day long.

 

[coolhand]

I couldn't agree more, I'll take a decent stock over leveraged ETFs all day long.

I prefer "portfolio management" to "trading". We have little flexibility in our TSP accounts so I do most of my real investing in my ROTH IRA. Of course, the TSP ROTH is also just as limited, so folks should seriously consider opening a self-directed account if they're going to put together a ROTH IRA. I know you know that, but for the benefit of folks still trying to figure this stuff out, I'm expressing my opinion.

ETR is up another 1% so far in just 15 minutes of trading. That's well above resistance. This is considered a safety stock (energy/utilities) and there appears to be a flight to quality right now, although these stocks in general have been doing quite well for some time.

On another note, breadth fell yesterday and that's a big flag in my book, so I'm carefully monitoring the action in the event this weakness is more than short term. I also note that liquidity, while still high yesterday, fell. It's still too early to get overly bearish, because this could be a head fake, but I think some measure of defensive action should be considered.

 

[Birchtree]

The beauty of the Roth is no paperwork or IRS looking over your shoulder.