Griffin Account Talk

[MADDOG]

MADDOG,

I think I speak for a lot of people, when I say - the work you do is much appreciated.

By the way, went to the C-fund today, because I expect a push in the Dow to meet 13K. Such a rally will likely propel the large caps more then the small and medium and take the dollar index with it. We saw this with Dow 12K back in October and November. Some chalked it up to sector rotation, I'm not sure if I buy that since it was a relatively short lived.

you / ya'll are very welcome; i just wish i could pull myself up a little higher on the totem pole. #87 on the list just don't cut it for me. at least i'm above zero now; that much i'm thankful for. i was below up to mid march;

md

 

[Griffin]

I am following up on a comment I made in Show-me's talk -

The beige book could be a bucket of cold water on what looks to be a fairly hot day. I'm expecting dow 13K today, but the euphoria to be short lived. The rest of the week is going to be the battle between inflation and earnings. Even if the numbers come in on target on Friday, your looking at low GDP and high inflation. Monday's reports have the making for the second hit of a one/two punch for the bears. I probably will go penny pinching this week - probably COB today, if today has an explosive morning.

We are not getting an explosive move up today, so I am going to stick it out in stocks for tomorrow with a hop on over to the lilly pad COB tomorrow night.

 

[Griffin]

I recognize the risk of staying in the market right now, which is why I am in the C-fund, but I intend to stick it out. IMHO, if the S&P closes above 1500, it will find it's way to an all time high (I think 1530 is about what it would take). That's about 2% more from here. While that seems a bit out of reach, this recent tear out of February's correction has long since crossed the line into the realm of statistically improbable so a couple more % would be par for the course.

 

[Griffin]

I'm starting to believe that I have finally shrugged off my slump after netting 2% the past two weeks. So far the "new high on the S&P 500" theory has been working well and I don't expect any disappointment from the Jobs report. In the zeal for a new high, I can see the market reach for that point going into the FOMC on the 9th. With the Fed 97% likely to hold rates, I'm think a rally into the Fed, followed by an inflationary data /profit taking induced dump later that week when the PPI numbers come out.(http://www.cbot.com/cbot/pub/cont_detail/0,3206,991+23425,00.html).

Play til May (sticking it out in the C-fund until Wednesday) then go away (I'm going to go into a very low aggressive approach until we get something that resembles a real pullback).

 

[clester]

Grif,
I think you have a good game plan. Playing the trend has worked so well (except for Feb). I plan on playing the new trend until it stops working. The C fund is safer and has also outperformed for about a month. We may get pulled up to the 1527 all time high. Go away in May may not work this year. Everyone expects it, so it may not happen. The wall of worry has kept us going. How long will it last?

 

[clester]

Griffin,
Are you considering the I fund yet? I'm sure Japan will be up Monday, but EU may not.
Thanks

 

[Griffin]

Griffin,
Are you considering the I fund yet? I'm sure Japan will be up Monday, but EU may not.
Thanks

This last leg down the dollar took had been a source of some concern for me that inflation is worse then is generally being recognized. However, I think I over estimated the problems with US inflation and so did the currency market. I think the dollar will rebound from here in the very near future especially with the run towards a new S&P500 high. I am staying focused on the domestic market for the near future.

If today looks like it is going to be significant, I may try to take a one day side step to avoid a little profit taking on Monday.

 

[Warrenlm]

I'm wondering what your thinking is on the effect of the possible FOMC news Wednesday? Many seem to be thinking that is a major mover, possibly down, in view of the M3 goal for the year being met already and the economic data. But it seems that every FOMC newsday has caused a burst upward in the market. Are you bullish that the Fed will facilitate another positive day?

 

[Griffin]

I seem to be in the minority that believe the next move for the fed will be up....but not for a while. So, I would not be suprised to see the language that was removed previously creep it's way back into the policy statement within the next couple of meetings. I think the market will react negatively to that news (as things currently stand, but if we get more significant inflation this quarter, a hike would be more tolerable). I don't think there is any real expectation that the Fed will reduce rates - so now sell-off if the fed doesn't. If we continue to rally into the meeting I expect a "buy the rumor, sell the news" effect. If we get a sell off the day before, then a no change would probably be viewed as a reason to buy the dip. I am expecting the former situation to be the more likely. Again, I think next weeks action is going to have a lot more to do with the S&P500 setting a new high then the FOMC, unless the Fed changes the policy statement. If they suggest a rate hike, and the market is riding new highs, it could trigger a significant sell off/profit taking.

I would expect to get whipped around next week. Right now I am thinking: This is just a model - not a prediction, think of this as the gambit of emotion/news I expect to see

Profit taking on Monday (out)
Dip Buying Tuesday (in)
Buy the rumor Wednesday (in) S&P NEW ALL TIME HIGH!!!
Sell the news/fumbling over "what next?" Thursday (out)
Inflation worries/mass profit taking Friday (out)

I'm wondering what your thinking is on the effect of the possible FOMC news Wednesday? Many seem to be thinking that is a major mover, possibly down, in view of the M3 goal for the year being met already and the economic data. But it seems that every FOMC newsday has caused a burst upward in the market. Are you bullish that the Fed will facilitate another positive day?

 

[Warrenlm]

Thank you. This was a heckuva positive, informative and helpful explanation and reply.

 

[clester]

Grif,
I see your back to C fund. Are you thinking a one day play and out for the fed on Wed?
Thanks

 

[fabijo]

I seem to be in the minority that believe the next move for the fed will be up....but not for a while. So, I would not be suprised to see the language that was removed previously creep it's way back into the policy statement within the next couple of meetings.

Man, that would really screw up my plan this week if the Fed raised rates. I'm hoping to catch a +FV because of a drop in the dollar that day.

 

[Griffin]

Sorry I didn't get back earlier, too much work, too little time. I think I am going to stick around for the Fed and get out COB Wednesday. I am concerned about the price index reports and I expect Thursday to be the set up. I'm still hopeful for that S&P 500 all time intraday high.

Grif,
I see your back to C fund. Are you thinking a one day play and out for the fed on Wed?
Thanks

 

[clester]

Thanks Grif,
I'm thinking we won't have any surprises this week. PPI may cause some waves (like you said). C fund up 5 days in a row, tomorrow would be 6. Could be sell the news?

 

[Griffin]

Obviously, I thought we would get some consolidation yesterday but it looks like it is going to happen today. It's likely the dip buyers will step up in anticipation of the Fed. I'm not going to bail unless it looks real bad (i.e. the SPX drops below 1500). I would want to see something relatively concrete pointing to a correction for me to sell today. I still think we will have a positive day tomorrow and maybe through Thursday.

In keeping with the model, it may have to be stretched out, in which case we ride out the week low in the channel until the price index data comes out, then we get our next rally. This market has been to bullish lately for me to believe it will let a S&P 500 all time high slip through it's fingers before the next major correction - but then again, I may eat those words in a couple of hours. :blink:

I may jump to the I fund for a one day if the dollar continues to rise today. I am leary of playing the I-fund in the short term, because of the FV's but Wednesday could get a real nice positive FV if the US has a bullish reaction to the Fed.

Thanks Grif,
I'm thinking we won't have any surprises this week. PPI may cause some waves (like you said). C fund up 5 days in a row, tomorrow would be 6. Could be sell the news?

 

[clester]

I seem to be in the minority that believe the next move for the fed will be up....but not for a while. So, I would not be suprised to see the language that was removed previously creep it's way back into the policy statement within the next couple of meetings. I think the market will react negatively to that news (as things currently stand, but if we get more significant inflation this quarter, a hike would be more tolerable). I don't think there is any real expectation that the Fed will reduce rates - so now sell-off if the fed doesn't. If we continue to rally into the meeting I expect a "buy the rumor, sell the news" effect. If we get a sell off the day before, then a no change would probably be viewed as a reason to buy the dip. I am expecting the former situation to be the more likely. Again, I think next weeks action is going to have a lot more to do with the S&P500 setting a new high then the FOMC, unless the Fed changes the policy statement. If they suggest a rate hike, and the market is riding new highs, it could trigger a significant sell off/profit taking.

I would expect to get whipped around next week. Right now I am thinking: This is just a model - not a prediction, think of this as the gambit of emotion/news I expect to see

Profit taking on Monday (out)
Dip Buying Tuesday (in)
Buy the rumor Wednesday (in) S&P NEW ALL TIME HIGH!!!
Sell the news/fumbling over "what next?" Thursday (out)
Inflation worries/mass profit taking Friday (out)

What are your thought this morning. Buy the dip in the C fund today since the Fed didn't change their statement? Do you see more selling tomorrow?
Thanks

 

[Griffin]

Clester, I'm down range this week so, my internet access is very limited. What you quoted, is still the model I am operating on. I'm suprised we did not get an all time new high on the S&P 500 before we got a correction, which is what I believe will happen. I think most investors are probably going to run to the hills tomorrow, since that all time new high is now looking unlikely. We really needed a stronger reaction out of the Fed to inspire the bulls..... it's the season for a pullback - "play til may then go away."

I ended up sticking it out in the I fund for today and I should be moving into the F tonight. I expect we are going to see a global sell off tomorrow, because even the absence of bad news out of the price index data, is not going to be enough to reverse the trend. I think we have at least 5-6% to the down side over the next week, so you may want to be very cautious if you did not already bail.

What are your thought this morning. Buy the dip in the C fund today since the Fed didn't change their statement? Do you see more selling tomorrow?
Thanks

 

[clester]

Thanks Grif,
Your plan would have worked great. Wish I had followed it myself.

 

[Griffin]

I deviated from the plan by staying in through Thursday, and also got burned. I was out of the loop most of the later part of the week and I only got a brief glimpse at things as they unfolded. I'm still not sure what happened. I do know this though, I am more then a little ticked about the way the FV was handled in the I-fund. I think I said I don't like playing the I fund in the short term because of exactly this type of situation.

Thanks Grif,
Your plan would have worked great. Wish I had followed it myself.

 

[clester]

I'm getting tired of the I fund FV as well. It cost me a bundle this time. What are yout thoughts on the CPI on tuesday. I'm 100% C for monday and right now planning on taking 50% out for Tuesday. I agree with you that we should get to 1527 or so before long. If you play the channels, thats the next top of the channel.