JTH's Account Talk

[JTH]

Hourly potential of H&S a break of the neckline could bode well for stocks (or not.) I'm noticing the the CNBC folks are excited...

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[ballnoutacontrol]

Hey JTH, what do you think about the F fund continuing to show strength? Usually it moves inverse to C and S. Is this the people who believe we are going further down buying safety? If so theres a lot of them. I'll feel more confident about the up swing once this activity eases up.

balln

 

[Happy_Trails]

That chart of AGG looks somewhat ominous, at least in the short-term. That would make me nervous if holding F.

 

[jkenjohnson]

That chart of AGG looks somewhat ominous, at least in the short-term. That would make me nervous if holding F.

I have never been able to make any money in the F or I fund. Therefore, out of ignornace and/or experience, I ignore them.

 

[JTH]

Hey JTH, what do you think about the F fund continuing to show strength? Usually it moves inverse to C and S.balln

It is the seasonal time to be in bonds till November, the F-Fund trades with stocks about 1/3rd of the time, I would only advise the F-Fund if you were a long-term buyer, because short-term trades can work against you rather easily. 10 days of slow gains can be erased in 1 day of downside action.

That chart of AGG looks somewhat ominous, at least in the short-term. That would make me nervous if holding F.

Could end up being a fakeout bounce off the previous shelf.

I have never been able to make any money in the F or I fund. Therefore, out of ignornace and/or experience, I ignore them.

Short term plays in the F-Fund have been mixed for me. I don't mind using the F-Fund but it's better for the long-term holders than it is for a short-term holder such as myself.

 

[JTH]

I should point out that a Golden Cross almost never gives you the ideal entry point. In general this is usually about 2-8 weeks prior to the crossover. In this case it's about a 6 week delay.

The same goes for the ideal exit on a Death Cross, only it's usually a much longer delay, like you should have exited 8-12 weeks earlier.

I still believe it's a good system and I've been able to prove it consistenly beats the markets over a long period of time, but I also believe you can do better than a golden cross system if you add some additional rules. The biggest lession to be learned is that it can protect you form a severe bear market, and after all without capital preservation you have nothing...

My TSP account trades are sucking wind, you should short-me. Here's a 6-month view with Fibonacci levels in place to give you an idea of where we stand within the retracements. Although today was a great day (one I missed) we are not out of the woods yet. 50/200 SMA Bearish Death Crosses consistently outperform this index, long-term traders should be respect that. The shortest crosses average about 20 days long, we'll have to see how this one plays out. I am just days away from declaring a Bear market, pending confirmation from other indexes such as the Transports, at that point I get more conservative.

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[FAB1]

So we have made the death cross yesterday or today? I think it has a physiological effect on us too.. hope im wrong but my powers are at a low ebb

 

[JTH]

So we have made the death cross yesterday or today? I think it has a physiological effect on us too.. hope im wrong but my powers are at a low ebb

It's mixed, the S&P 100, S&P 500, Wilshire 4500 have crossed over. The Transports, NASDAQ 100, and S&P 400 have not.

 

[Sensei]

Hi - I've been on vacation, and just now read your blog from 8/9. You & Boghie suggest upping contributions when the market is down like this, and that sounds good in theory. But am I missing something? The only way I know to change my contribution is through EBIS, and it takes at least 2 pay periods (4 weeks) for the change to kick in. 4 weeks from now, the market could look entirely different.

 

[SteelSaving]

So plan four weeks in advance.

I think it's about where you put your contributions, which fund. I did an IFT to G and F but all my contributions are going to CSI. You should alway aim to up your contribution amount (at least to receive full matching), after that it's up to you, put more in TSP or consider putting more in an IRA.

 

[JTH]

Hi - I've been on vacation, and just now read your blog from 8/9. You & Boghie suggest upping contributions when the market is down like this, and that sounds good in theory. But am I missing something? The only way I know to change my contribution is through EBIS, and it takes at least 2 pay periods (4 weeks) for the change to kick in. 4 weeks from now, the market could look entirely different.

This isn't a short-term pullback, this is a long-term correction of which I might expect a minimum of 1-3 months before we re-reach the previous top.

 

[JTH]

From a previous blog Long-Term warning, the bearish 20/50 EMA Death Cross

Good question!

For the S&P 500

1960-2010, 20/50 SMA, 139 crossovers. average crossovers 2.78 yearly. Total profit 246.23%, average yearly profit 4.92%. Maximum drawdown -34.82%, Average winning trade 8.75%, average losing trade -3.45%, average trade 1.22%

1960-2010, 20/50 EMA, 113 crossovers. average crossovers 2.26 yearly. Total profit 1065.98%, average yearly profit 21.31%. Maximum drawdown -26.77%, Average winning trade 10.55%, average losing trade -2.89%, average trade 2.58%

These number are crunched without adding the IFT limitations or TSP's End of Day criteria.

 

[Appatite]

I love the stuff you post Jason.

Keep up the hard work. I'm learning everyday, I think.

Went 90%G COB. Something isn't right anymore.

 

[amoeba]

It's mixed, the S&P 100, S&P 500, Wilshire 4500 have crossed over. The Transports, NASDAQ 100, and S&P 400 have not.

I-fund crossed on august 8. I have the ema's of S to still not yet crossed (665-50 vs. 662-200), but that could happen very soon. Someone, perhaps Boghie, told me not to put undue faith into the death cross unless it occurs broadly. Pretty close, however.

You'd need to be pretty darn brave to jump into a retest. Not to say that a whole buncha money couldn't be made real quick, but just as easily lost. I'm glad to be out of IFT's, for once.

 

[k0nkuzh0n]

The interesting part of it is how the statistics show that using EMA's is more profitable than SMA, which the difference being EMA weighs more recent data....but we are talking about 70 years of data. So maybe we should also put more stock in how the two (SMA vs EMA) have fared recently (past 10-20 years) than it has 30+ years ago.

I'd be interested to see the data if the occurrences were weighted similarly to how the EMA is weighted.

 

[JTH]

Just wondering,

I always thought the "death cross" was when the 50 day MA crosses below the 200 day MA? Never heard of it having anything to do with the 20 day MA.

I double checked online and verifeid that here: http://www.traderslog.com/death-cross/


But maybe there is another death cross using the 20 and 50 day MA's? Wasn't sure...maybe you could shed some light on this. Thanks.

You caught me, I'm really just making this stuff up as I go along. I use those terms with all moving average crossovers, that's why I always state what periods I use. Some folks use the term "bow tie" for the shorter periods, to me it's just numbers with the word Golden Cross implying a positive crossover and the word Death Cross a Negative Cross Under.

 

[JTH]

The interesting part of it is how the statistics show that using EMA's is more profitable than SMA, which the difference being EMA weighs more recent data....but we are talking about 70 years of data. So maybe we should also put more stock in how the two (SMA vs EMA) have fared recently (past 10-20 years) than it has 30+ years ago.

I'd be interested to see the data if the occurrences were weighted similarly to how the EMA is weighted.

When you've done as many scans as I have, it's all the same to me, I could cherry pick and manipulate any outcome I want. I often find that on the shorter timeframes an inverted crossover works better, particularly in a trending market.

 

[clester]

CNBC.com Article: Don't Fear the 'Death Cross' in This Fast-Moving Market

There's some buzz around about the "death cross" and whether it's appearance signals a bear market, but Cantor Fitzgerald technical analyst Marc Pado says pay it no mind.

Full Story:
http://www.cnbc.com/id/44166154

 

[jpcavin]

CNBC.com Article: Don't Fear the 'Death Cross' in This Fast-Moving Market

There's some buzz around about the "death cross" and whether it's appearance signals a bear market, but Cantor Fitzgerald technical analyst Marc Pado says pay it no mind.

Full Story:
http://www.cnbc.com/id/44166154

I read several articles regarding the subject and what I took out of it is that it's all a crap shoot. Give the death cross the respect that it deserves but don't use it as your indicator because it could go either direction."

 

[JTH]

CNBC.com Article: Don't Fear the 'Death Cross' in This Fast-Moving Market

There's some buzz around about the "death cross" and whether it's appearance signals a bear market, but Cantor Fitzgerald technical analyst Marc Pado says pay it no mind.

Full Story:
http://www.cnbc.com/id/44166154

Yes he is correct, during the last Death Cross you would have missed a 154 point rally and not gained 15.24%, however he failed to mention during the death cross previous to that you would have avoided a 588.24 point 39.62% decline, he's cherry picking.

I read several articles regarding the subject and what I took out of it is that it's all a crap shoot. Give the death cross the respect that it deserves but don't use it as your indicator because it could go either direction."

I don't understand why there's an impression this crossover isn't important. from 2001-2011 had you gone long on each of the 6 Golden Crosses you would have had 5 winning trades, a 70% profit, that's 7% a year, that ain't bad. Had you gone both long & short you'd have 7 of 11 winning trades and be up 113.39% with a 11.3% year average.