FireWeatherMet Account Talk

[FireWeatherMet]

Something for all you "Perma-Bears" to digest:

In the entire 70 year history of the S&P 500, whenever a 50% retracement occurred after an initial major Bear Market correction (over 20%)...we have NEVER re-tested the previous low.
Now it doesn't mean we can't go down 10%, or chop sideways for awhile...BUT it means that statistically, history says that the June bottom WAS THE BOTTOM.


- Seeking Alpha -
The June Low Was It

https://seekingalpha.com/article/4534335-the-june-low-was-it

 

[Tsunami]

Something for all you "Perma-Bears" to digest:

In the entire 70 year history of the S&P 500, whenever a 50% retracement occurred after an initial major Bear Market correction (over 20%)...we have NEVER re-tested the previous low.
Now it doesn't mean we can't go down 10%, or chop sideways for awhile...BUT it means that statistically, history says that the June bottom WAS THE BOTTOM.


- Seeking Alpha -
The June Low Was It

https://seekingalpha.com/article/4534335-the-june-low-was-it

This stat has been floating around the internet, but I think it's very wrong if you look at the major bear markets of the last century...
Short term I think there's a decent chance of a higher rally high in September, but the 4100 area needs to hold.

https://photos.app.goo.gl/UJNZnrTpCLrxN1UB9

 

[nasa1974]

This stat has been floating around the internet, but I think it's very wrong if you look at the major bear markets of the last century...
Short term I think there's a decent chance of a higher rally high in September, but the 4100 area needs to hold.

https://photos.app.goo.gl/UJNZnrTpCLrxN1UB9

Fingers crossed for a rally in September. Normally not a good month.

 

[WorkFE]

Normally not a good month.

Yep, traditionally the worst month of the year for stocks.

 

[FireWeatherMet]

Just an update to all, in my "Bullish" outlook I did state a caveat: -
"But as always, one has to keep an eye out for any "Black Swan" events that can quickly make oil prices rise again...and be ready to quickly change investment course based on that." I posted this on Whipsaw's thread last week.

So a few things...I noticed the price of gas at my favorite Gas station stopped going down, and actually went up 1 cent late last week...although it dropped back this morning.
Made me gloss the news and quickly came across a very disturbing article on how the Saudi's said that if we make nice with Iran and allow its oil on the market, they'll cut production to even that out! Uh-oh!

Oil analyst: OPEC+ reminded markets it’s the ‘central banker to crude’

Then...I checked the price of Crude...and saw that there was a 7% rise off the recent low, and that had just pierced the 2 month long downtrend.



So like I said, I am ready to be nimble with my strategy, and change course in the short term.
At the same time, my system calls for me to win "little battles" during the course of the year, until I get a few percent ahead of the major indices, then once I get to about 5% ahead of the funds, make no changes unless its a crystal clear buy/sell signal.
As of today, I'm about -5% for the year, BUT that has me Beating the F fund by 4%, Beating the C fund by 7%, Beating the I Fund by 12%, Beating the S fund by 14%.
Who whudda thought the G-fund would be the 'Fund du Jour" this year? lol.
So really I'm not supposed to budge much at this point, and just ride the "down and ups" until the end of the year.
But I haven't used an IFT yet in August and can afford to be nimble, get out at a key point, then get back in at a better price before months end, or if my hypothesis goes wrong again, due to unforeseen events.

So lets look at the S&P chart (below)
Seems that 50% retracement line was a barrier at least in the short term...or maybe more.
The recent fall has dropped all the way to fill the previous "Open Gap" from one of our big up days 2 weeks ago....and it seems to be holding around there, as its near another resistance line, as well as near the 50 & 100 Day EMA's, which are all converging near the same area.
So I would like to think this area could hold, maybe?? If so and we bounce, the 1st obstacle is the filling of the more recent "Open Gap" from just the other day, on our way down. Thats my short term exit target.
At that point, depending on what happens with Oil, with Powell speech expected later this week from Jackson, I might quickly jump back in, or stay out and wait for another downturn.
We could also be setting up for a "range-bound" sideways chopping pattern also, till oil/inflation expectations clarify.
So that's my story...and I'm stickin to it (or not) lol.

 

[Bullitt]

RE: 50% retracement.

Michael Burry tweeted about that last week, but he's been deleting his tweets shortly after posting them so it's gone. Someone took a screenshot of it before it was erased though. I'm sure someone somewhere has posted the backtesting results of his claims.

 

[FireWeatherMet]

RE: 50% retracement.

Michael Burry tweeted about that last week, but he's been deleting his tweets shortly after posting them so it's gone. Someone took a screenshot of it before it was erased though. I'm sure someone somewhere has posted the backtesting results of his claims.

View attachment 55313

There was no SP500 back in most of those years, I think he's referring to the Dow.
And the last 1 was 54 years ago...before modern electronic trading...but agree we could still take a sharp dip.

 

[FireWeatherMet]

Still bullish going into next months Fed announcement, but don't quite like the way the charts are setting up right now with possible Head & Shoulders pattern.
We have an Open Gap still to fill, 1-2% higher from here, and maybe we will fill that late today with a late day surge...but I don't like the markets edging higher BEFORE Powells speech tomorrow.
Would rather see them dropping a bit more this AM and already pricing in any bad news.

So with still all 2 IFT's in hand for Aug, will lock in this months profits of about +2% (depending on how things change from this AM), I'll do a quick exit to safety today...and be ready to play again before the last day of Aug if the "short-term danger" passes.

Leaving 50/50 S/C allocation and going 100% G COB today.

 

[FireWeatherMet]

Yesterdays post and IFT

Still bullish going into next months Fed announcement, but don't quite like the way the charts are setting up right now with possible Head & Shoulders pattern.
We have an Open Gap still to fill, 1-2% higher from here, and maybe we will fill that late today with a late day surge...but I don't like the markets edging higher BEFORE Powells speech tomorrow.
Would rather see them dropping a bit more this AM and already pricing in any bad news.

So with still all 2 IFT's in hand for Aug, will lock in this months profits of about 3%...I'll do a quick exit to safety today...and be ready to play again before the last day of Aug if the "short-term danger" passes.

Leaving 50/50 S/C allocation and going 100% G COB today.

 

[tsptalk]

Great job!

 

[FireWeatherMet]

Feeling good exiting last Thursday, just before the "Big Flush".
That was my 1st Aug IFT...and with one still in hand, and markets down near 1% this morning, I plan on using my 2nd IFT to go back into equities.
Things have changed from my bullish stance a week ago, namely Oil up nearly 10% from its recent low, because falling oil prices were playing on lowering inflation.
That will still likely be the overall trend in the coming weeks/months, but its creating some uncertainty now in the short term.

Powells speech, nothing unexpected made the Dow drop 1,000 points Fri, and indices were down 3-4%.
Now with near another 1% drop today...Cramer on CNBC made an interesting point "with this huge drop along with today...who still has not sold based on Powells hawkish speech?" implying that we might run out of sellers soon in the short term.

A look at the S&P chart (below) shows that with todays drop we're just about at the same "drop length" of our initial drop,and for charters, thats a good short term tool for a "short term reversal.
This level also lines up with an old "Open Gap" on the indices, not sure how relevant it might be now...but its there.
Plus my system is screaming at me to get in, to lock in my recent 4% gain on the markets, as YTD I'm now 7% above the F, 12% Above the C, 17% ahead of the S, and the only way I keep this lead on equities is to stay in them.
So while I could be trying to catch a "Falling Knife" or "Running Into a Burning Building" I'm using my 2nd Aug IFT to go back into stocks (50% C and 50% S) COB Today.
Could just be a 1-2 day play, or it could be longer, depends a lot on what the price of Oil does.

 

[rangerray]

Very brave move! I hope you hit a home run!!


Scott Harrison
Senatobia, MS

 

[FireWeatherMet]

CPI disappointed...no short term catalysts until FED speech next week, so will try to lock in (err "save") Sep gains, before they vanish.

Leaving 50/50 S & C position and going 100% G COB Today.

 

[FireWeatherMet]

Hi all, was having computer issues in the few minutes b4 the IFT deadline, so had to scramble and use my phone, which I rarely use to make IFT's.

So did not have a chance to post here, but in short, with our recent 6% downturn the past 7 days (where I've spent most of it on the -G- Lilly pad, minus the 1st big down day) and the 12% downturn off the recent relief rally high, I felt that most of the potential "Bad News" was already baked in.
With stocks going modestly higher INTO the Fed announcement this AM, I figured either:
1) A confirmation of "Bad News" would send the market sharply lower the last 2 hrs of the Fed announcement, fully baking in all negative news or
2) A surprise "Good Vibe" from the Fed in any positive comments would make the market go up higher, and then leave room for some short term follow thru upward the next 1-3 days.

My system simply calls for me to make small gains on the major indices and since exiting to the G a week ago, I "gained" on the C,S,I funds by having them drop an additional 2+ percent, seeing my lead on the C fund increase to near 13% and 19% on the S fund. Even 7% ahead of the F.
So with that, my system is screaming for me to get back in, regardless of what the market does next.
Speaking of that, a quick peek at the S&P chart (below) shows our 12% fall off the Relief Rally high and 6% recent drop the past week...and shows we are about 1 to 2% or so from filling the most recent open gap on the charts.
So that made me decide to go leave my 100% G position, and go 100% C starting COB today.
Hoping for a sharp fall from todays FED announcement to fill that gap by COB hopefully then get a snap back in the next day or two.

 

[Boghie]

Someone should call the Treasury and Administration. There is very basic advice that all financial folks know:

Don't

Fight

The

FED​

:laugh:

Good luck with some bounce gains. That cat is disintegrating by now

 

[FireWeatherMet]

Someone should call the Treasury and Administration. There is very basic advice that all financial folks know:

Don't

Fight

The

FED​

:laugh:

Good luck with some bounce gains. That cat is disintegrating by now

Yes true...IN THE LONG RUN.
Another saying is "YOU BUY WHEN THERE'S BLOOD IN THE STREETS".
In that last hour there was a Raging River of Blood pouring down Wall ST ( >2.5% drop from intra day high to final close.).

Today's 1.7% total finalized drop is EXACTLY what I wanted. My entry into Stocks starts after today's close.
Today's last hour drop pretty much filled that open gap....puts us 14% down from the recent Relief Rally peak, and 8% down in the past 9 days.
This is usually when the Cat actually starts its bounce. :smile:

 

[nasa1974]

We can only hope. Hopefully for a few days.

 

[FireWeatherMet]

Tom doesn't like me to give away the exact parameters, but I will just show the numbers so far (its early) and say I have NEVER seen it this extreme.



This tells me Big Snap Back Rally coming soon...better get onboard the train...because it tends to pull away from the station faster than most people can digest and react to.

 

[nasa1974]

I can only hope for a snap back rally. I'm getting pummeled. :smashfreakB:

 

[Bullitt]

There's a final gap at 3715-3674.

Interesting note on the sentiment poll but I'm very leery of any sentiment data in a bear market. AAII has been throwing buy signals since March 2022 with at least four stronger than anything seen at the forced shutdown bottom in 2020. NAAIM has been pretty much useless in the intermediate term as well throwing buy signals since March. Long term, the market could be carving out a major bottom, but with tech so reliant on low rates, something is going to have to take the reigns after a decade of tech rule.