Griffin Account Talk

[Birchtree]

Chauvinistically maybe - pedantry certainly. Regurgitate? as in to vomit.

 

[Griffin]

Hey Shakespeare - do you actually think in these terms, or do you keep a thesaurus under your pillow?

 

[Griffin]

Here is where I am looking for the S&P500 to form a bottom - in the green triangle. Any action, either to the upside or the downside, could trigger more significant selling. I want to see a few days of consolidation before I consider moving back into stocks.

View attachment 1196

 

[Griffin]

Just a touch of green to rally enough dip buyers for another drop. Do you call this a dead cat bounce, or did the market simply over react yesterday. Do you recall asking yourself this same question a month ago?

Got deja vu? - the last time we had this weeks slew of reports - the numbers did not come in exceptionaly bad - just more evidence of an economic slowdown leading to a slow bleed off, similar to what were seeing again: Existing homes sales up but the value is down, lower durable goods....etc.

View attachment 1197

 

[Griffin]

I moved back into the S, this is probably going to be a one or two day move, I may follow it up with a switch over to the I tomorrow, depending on what happens with the dollar.

It's been a bit annoying to give up the some of the dip buying gains by bailing on the big red days and waiting for the green to buy back in. However, the payday on this strategy will either come in the form of a nice consolidation, or a well developed timeable channel. Either way, I can live with it for now.

 

[Griffin]

My hypothesis that the market would slip back into the channel from the first half of the year (the top chart), so far has not manifested and now appears to be off the table. I don't mind making mistakes (although November was relatively weak for me as a result) as long as I get back on track quickly. I am now slipping behind the I fund and barely ahead of 50S/50I BAH strategy.

View attachment 1216

It appears we have a new channel emerging (the bottom chart). I am extremely skeptical of this channel because I suspect it is doomed to fail sooner rather then later. The logic of the bull mantra is getting stretched. I don't think the average Joe is going to buy it for much longer. The AAII is now more bearish then bullish. Sometimes you have to take indicators at their face value. As Birch has mentioned many times, the market likes to catch folks by surprise and shake off as many people as possible. The expectation that a pullback is eminent may become a self fulfilling prophecy, despite the season. The bulls are in a frenzy providing reasons why every bit of economic data/slowdown, the yield curve, the falling dollar, etc. are not a concern. The kind of rationalizations and their volumes are waving a big red flag.

The whole counterpoint stems from earnings - which is truely what should dictate a stocks price. So the bulls are right, earnings are not bad. But, the bulls are no longer giving reasons why the market should continue to go up, now they are giving reason why it should not go down. This is not the same.

In spite of all that, I am keeping in mind "the market can stay irrational longer then you can stay solvent" mantra. I am currently in the G, waiting to catch the next wave, maybe :worried:

 

[FundSurfer]

Griffin, I think the end of year time frame calls for thinking a little differently in terms of market psychology. I think we will see folks getting defensive but right now may be a little early for that. I think mid to late December could see the market get very nervous. I think your instincts are good just early because of end of year.

 

[Griffin]

Griffin, I think the end of year time frame calls for thinking a little differently in terms of market psychology

Seasonality, end of quarters, beginning of months, holiday's, elections, etc.....how many times this year have we gone (or not gone) to the trough for these reasons, only to be kicked in the teeth? This year has been a excellent task master, and I feel I have been sufficiently schooled.

I'm sticking to the charts, MACD, slo sto, RSI, etc. for the rest of the year. If it walks like a duck, sounds like a duck and looks like a duck, I'm calling it a duck.

 

[Birchtree]

Quack - Quack.

 

[Griffin]

Quack - Quack.

You never fly south for the winter

 

[Birchtree]

I've got 16 ducks in my pond right now - they'll feast on the fish I feed all year probably for another week and then it's off to South America.

 

[Griffin]

:blink:

 

[Griffin]

Griffin, I think the end of year time frame calls for thinking a little differently in terms of market psychology. I think we will see folks getting defensive but right now may be a little early for that. I think mid to late December could see the market get very nervous. I think your instincts are good just early because of end of year.

Do you follow the seasonality or defy it? Is the Fed a non-issue?

Most of the people I watch are in a defensive position. The market is still about half way to the bottom of the channel. If we continue sideways, it will take most of this week to get to the launching point - which fits the seasonality pattern. However, if today goes seriously red, creating another, "buy the dip" opportunity, do you jump in and catch the wave knowing it should terminate at about the start of the Santa Claus rally?

This week is going to be about picking the low for the next wave and then knowing when to get off. I think it's a "no brainer" that if your on the sidelines and it goes seriously green today, you don't chase. Maybe that's not a "no brainer"...how much do you trust seasonality?

 

[FundSurfer]

The market is still about half way to the bottom of the channel.

What channel time frame are you looking at? I think the C-fund is the only one at the half way point, looking at a 6 month time frame. S-fund could be called mid-channel on an 18-24 month time frame but near the top of a short term time frame. I-fund still looks to be in a rising wedge and toward the top of that wedge.

For this week, we may see increases till Friday and then see a dramatic sell-off due to triple witching. That would fit my mid-December prognostication. Charts are looking to me like C-fund (safer than S&I with a little room to go to top of channel.)

 

[Griffin]

When I say market - I mean the S&P 500 (SPX), I see it as the driver, everything else follows.

View attachment 1242

Would you call the increases you mentioned - significant or sideways? If I am interpreting this correctly, you are thinking the S&P will make a move above 1415 this week? that would definitely be in defiance of seasonality, possibly leading to a sell off when we should be looking for a rally next week.

That would make today or tomorrow the day to get back in.

As I mentioned before, I am not liking seasonality trends at all this year, and I am tempted to bet against them - and move today. The other side of that coin is the 1415 line, today is the fifth day in a row the S&P has bumped against that ceiling.

View attachment 1243

The smart thing is probably to get in for the rest of the year, but I would like to catch up to the I-fund a tad more. Haven't made up my mind yet.

 

[FundSurfer]

I'm thinking a possible 1%-1.5% move up in the C-fund before things could get very dicey. In the bottom graph shown below, I like not where we are headed. The top graph shows where I see us in short term mid-channel.

I think the seasonality trend continues this week but after this week people will be nervous and protective of this years gains.
View attachment 1244

 

[Griffin]

I just moved to the F-fund,

I believe the Fed will suggest that inflation is stabilizing, but I doubt they will indicate a potential rate drop.

I think the "end of year hold onto what you got" mentality is insightful and probably correct.

Even if I don't beat the I-fund, I still think I will be able to chalk this year up as a success.

 

[Griffin]

The slightly negative bias to the market leading up to the fed is not very encouraging for the bulls. Yesterday, Greenspan suggested the dollar is going to continue to be weak for the next couple of years, also not particularly encouraging. If the market were to have a positive reaction to the fed, that could push the Dow to a new all time high, triggering a sell.

The bulls are arguing the economy is strong, so why do they need a confirmation from the Fed? Six days against the 1415 line for the S&P. What does the fed have to say to make it go higher? are words enough, or does the fed have to give a hike to get the bulls moving?

My feeling is that the market needs an injection of optimism to spur it forward and it ain't going to get that this month. Anything short of that and the market does nothing, until the reality of doing nothing kicks in and it sells.

Anyway, you slice it, I see a buying opportunity coming.

 

[350zCommTech]

My feeling is that the market needs an injection of optimism to spur it forward and it ain't going to get that this month. Anything short of that and the market does nothing, until the reality of doing nothing kicks in and it sells.

Anyway, you slice it, I see a buying opportunity coming.

With the yields down right now, I can see the markets being disappointed if there's no change in the fed speech.

 

[Griffin]

Talk about missing the forest through the trees, I almost missed the set-up (again :notrust: ) on the S-fund. This is definitely a short play (one day more then likely).