Griffin Account Talk

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I missed the FV on Friday, which should have been my signal to move into the I-fund yesterday. I am still in the C-fund and debating if today or tomorrow is the day to play the retest (that assume there is one - which I could be wrong about that).

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I expect tthe market to find resistance here or one more step up around 1510 on the S&P. I am going to assume we get a retest, but I do want to ride this rally as much as possible, so the question for me is: will that step up come today or tomorrow. As things currently stand, I am thinking we have at least one more day before we see resistance derail this rally. I've noticed in the past that these rebound rallies tend to flatline for a day before they retest, giving us our out.

PS - I've noticed that the Wilshire4500 has considerable more distance to go to the upside to reach the same relative position as the S&P, so I will move to the S-fund today if I don't bail out (I expect to push today's decision out to the last minute). I'm sorry I can't make the call earlier, all i can say, is if today doesn't look strong going into the deadline, I will get out.
 
I figured I would repost this since it looks like we just got our first retest. I am switching from the C to the S tonight, which doesn't help the situation any. I am not going to worry about what happens from here because I bought the first bottom and as long as that holds, I'm satisfied to either successfully play the volatility or not play at all - but I don't want to get burned. So I'll chalk yesterday and today off as market volatility around the bottom.......missed opportunity? yes, but a failure? no.

With that said -

I never tell people what to do, but if tomorrow is red, I will get out and if you asked me for my opinion, that's what I would recommend for you. If we continue down from here, the chances of the market progressing to the next major support level far out weigh the probabilities that it will find some intermediate weak support level and rally.

The retest of a major low is always an anxious event, but it is a buying opportunity. I want to remind everyone that following the last summer's correction, our best return from the aftermath came from pointman72 who basically went into a buy and hold through the whole recovery.

Griffin said:
As I mentioned yesterday, I am slipping back into stocks in the C-fund, looking for a bounce. I expect a retest of todays lows within the near future, so my trip into stocks will be short.

But that is not what this post is about.

The Subprime problem is now the Prime problem......be sure you understand this as we go forward. Financials have been on a huge tear for years and the could very will give back some substantial gains. Which means we could go lower - the next step down is to DRUMROLL PLEASE..........around 1320 - that's no joke. A full 9% from where we are now.

If your thinking about doing the Ducati thing....It could be the better part of a year before that cycle brings you back to where we are today.....and that assumes the dip into that valley doesn't reverse the bull trend.

Do not underestimate what happened to Countrywide - the same thing may very well be happening to every other major lender. Foreclosure's and housing price drops may become the name of the game for two years - that could mean a two year bear market - or one very large correction upfront.

I'm not doomin and gloomin here, but I want to go on the record as having put this out there.

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I was not able to get to a computer until a couple of minutes before the deadline. Not enough time to submit an IFT. When I looked at the charts, the S&P was slightly green and the Wilshire was a small bit into the red. I did not even try to squeeze the IFT in because it did not look bad at first glance.

However, I now see that things were looking pretty scary around 11:00. I think I would have bailed had I'd seen that. I may very well punch out tonight. I will not have access to a computer tomorrow so I will be making the call based on how the day wraps up today. I'm not sure what the bulls are waiting for, although i see they are starting to step in, because it does not get any better then this.
 
Despite yesterday's rally into the close, I was feeling like I had really pressed my luck by riding this whipsaw. Fortunately, I am going to slip out the side door with a small gain since buying into the bottom on the 27th. Whew!

I always walk away from these things wishing I had just let the dust settle before diving back in, but unfortuantely, I am an adrenaline junkie and I can't stay away. Which, having got my fix over the last four days, I am now going to step aside and look for a sweet buying opportunity. I expect a couple of small positive green days with plenty of whip. I think it was premature to think of the 29th as a retest of the 27th. It's better to view it as a single bottom due to the extreme intraday dip on the 30th. Now I'm looking for a small rally and the retest of the 30th.

When you look at the 3 (or more) year charts of the Wilshire 4500 and the S&P 500, the Wilshire (S-fund) is looking like a much safer move. If the 200 dma gives way, and the market moves to the bottom of the multi-year channel, then the S-fund will take a lot less of a total hit (although it might come down faster). I'm not going to throw out a chart.....either you get that or you don't. At this stage of the game and given the history of the two funds, I much prefer the S-fund to the C-fund as things currently stand.
 
Griffin,

You are a daily read for me. Keep it coming, and thanks for your comments!

Robo
 
Paladin,

Good catch, thank you, you are correct, I was refering to Wednesday - not sure why I mixed the date up.

Paladin said:
Just to clarify, are you referring to the extreme intraday dip on Wednesday, August 1st as being the current bottom? Looking at the charts, I agree that we have only established a possible bottom here and have yet to retest that bottom.
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Depending on what you read, you get a variety of scenarios that all boil down to two basic views of the jobs report:

Scenario 1,

Jobs report good: market says bad for a Fed rate cut - market drops
Job report bad: market sees the potential for a rate drop and does not sell off (they don't call for a rally, they suggest it won't sell off)

Scenario 2,

Jobs report good: market stablizes and problems seem contained (do not call for a rally, just stabilzation)
Jobs report bad: market sells off

So what this comes down to, is regardless if the jobs market is good or bad, either way there is legitimate argument to sell off and there is an argument that it will stablize, but not necessarily rally.

That tells me that regardless of what happens, we are going to see a sell off start, then the question of stabilization falls back to the dip buyers and high volatility.

Ultimately, the key to the next few days will be about the developing consensus on how the fed will react to the credit crisis (is "crisis" the right word? that may be too strong but that is exactly the kind of thing that I will be looking for as the media puts their spin into the minds and psyche of investors)
 
I'm looking for a sstable bottom also. As with you and Ebbnflow, I am in the G fund today. However, today I will follow the ebbtracker to the Fund [I think that Tom is already in the F fund since yesterday]. In my opinion, the F fund should do well, in view of the Econ. data that came out at 8:30. The employment picture and an increase in the unemployment rate should give the Fed reason to at least consider a drop in rates to stimulate the economy. That is, the subprime lending crisis, combined with todays numbers could tip the Fed,s hand. The unknown is if they would act next week or not. In any event, the F fund tends to perform quite well in an atmosphere of the expectation of lower rates down the line. Best wishes to all!
 
If a Fed cut does begin to look imminent, the market will begin pricing it in and the F-fund should be profitable. However, this latest creditor news with American is not good for the total economy. The Fed may not want to fan the flames of volatility by making a cut next week. I suspect they will want to wait a little longer until they have a clearer picture of how widespread the credit crisis extends. This Fed's top priority is still inflation, and deflation in the housing market could bring the Fed right into their comfort zone, without them doing anything. They may look past the immediate concerns and see the silver lining on this credit crisis cloud.

airlift said:
I'm looking for a sstable bottom also. As with you and Ebbnflow, I am in the G fund today. However, today I will follow the ebbtracker to the Fund [I think that Tom is already in the F fund since yesterday]. In my opinion, the F fund should do well, in view of the Econ. data that came out at 8:30. The employment picture and an increase in the unemployment rate should give the Fed reason to at least consider a drop in rates to stimulate the economy. That is, the subprime lending crisis, combined with todays numbers could tip the Fed,s hand. The unknown is if they would act next week or not. In any event, the F fund tends to perform quite well in an atmosphere of the expectation of lower rates down the line. Best wishes to all!
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Griffin said:
This Fed's top priority is still inflation, and deflation in the housing market could bring the Fed right into their comfort zone, without them doing anything. They may look past the immediate concerns and see the silver lining on this credit crisis cloud.
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Kind of luke warm.... Good profit/growth numbers for industry but not so good numbers in the housing/mortgage market when they have been saying for a while that there was troubled water ahead. I'd say they have things where they want although they have a tiger by the tail. I agree status quo.
 
It looks like the Tiger is not to happy following the Bear Sterns conference call. As we go into the final trading hour, I doubt that we will see a buy program executed today so I expect the rest of the day to slip

Interestingly enough, we still have not retested Wednesday's lows yet on the S&P but the Wilshire is there. I like the WIlshire more then the S&P right now so technically, my buy signal is being triggered, if support is confirmed.

I have my finger hovering over the buy button, but I'm not ready to push it yet. I have this creepy feeling that this situation is going to get worse. I want to see if the market can accept some good news from the financial sector and not scoff in disbelief.
 
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Griffin said:
I want to see if the market can accept some good news from the financial sector and not scoff in disbelief.
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Here's a nice sample of the news coming out of the financial sector

http://www.bloomberg.com/apps/newspid=20601087&sid=ajKWK_Vr2bFo&refer=home

A great buying opportunity is shaping up, but this steady stream of problems are real - they mean real losses: higher operating costs, higher insurance expenses, less profitable process, slower business volume...yadda yadda yadda.

News scares and market jitters are great for corrections, volatility and the health of the market. However, whole sectors undergoing systemic and progressive consolidation and reversing years of gains is an entirely different story.

I would not be suprised if the market suprises by opening lower in response to OSMs and immediately bouncing into the green through noon as various preplanned buying plans are executed by the big boys, and then decaying as the afternoon drags on and FOMC stagnation kicks in.
 
I am really happy with where the S-fund is at today, I am going to go ahead and move into the S-fund. I am concerned that the S&P will drop below the 1410-1420 range. If that happens I will get back out.

I should mention that this move is me just getting a little helper fix to satisfy my volatility junkie needs. The Fed is sure to disappoint (i.e. not say anything to positive or make a move), but today's quick move down, has created an opportunity. I'm hoping to close on the day's lows.

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