JTH's Account Talk

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Warrenlm said:
Has "smart money" ever been known to behave as amateurs and "chase returns"? :notrust:
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In general, when both the PVI/NVI are rising, if the NVI dips below the 255 MA it is a faily good signal indicating the end of a bull market. For the S&P 500, this is a strange case where only the NVI is rising. In a bull market (created by institutional investors), they can't afford to be outperformed by the S&P 500.

Bond yields put in an all-time bottom in Dec 2008 and with interest rates at 0%, when they do eventually raise the rates, bonds have nowhere to go but down. This could potentially create an extended bull market in stocks disbelieved by many but true nevertheless.

I myself think Emerging markets are the place to be over the next 10 years, too bad TSP doesn't have this option.
 
Can you feel the tension on the tape - the anxiety is going to pop some bear heads real soon. The spirit of the remaining fence sitters is being destroyed and they are missing this train and I could really care less. In many ways, the rally off the recent lows of 1042 are the most impressive part of the entire 12 month rally. Later on mom and pop investors will return to this market in greater numbers - repeating the pattern of previous bull markets - build the bull arena and they will come.
 
JTH said:
Birchtree, I would feel better about these markets if I knew why the large caps are lagging when compared to the other indexes, do you know why this is the case?
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I posed this question as well a little while back. It's been a little frustrating this year. I opened the year with a significant percentage in C, mostly as a defense because it also doesn't lose ground as quickly as the S. In the meantime with its performance I might as well have parked it in G. I moved a little of it to S today.
 
You have to have patience. Small caps routinely lead out of a cyclical bear bottom but don't have the stamina for the second leg - we are now approaching the second leg and the larger institutions will gravitate towards the large caps. I wouldn't want to be holding a large S fund position come the next consolidation - by the time the 4 year nesting rolls around I'll only be holding C fund.
 
JTH said:
Birchtree, I would feel better about these markets if I knew why the large caps are lagging when compared to the other indexes, do you know why this is the case?
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Small caps historically do better after a recession:

Cumulative returns following a recession
GetImage.dyn

Once rates start going up, this may change.
 
tsptalk said:
Once rates start going up, this may change.
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It could be that once rates start going up, large financial institutions will start lending MORE to small/mid-caps because they'll lessen their treasury carriage trade and move elsewhere to make the money. Also, i think the big caps are lagging because even though we just left a value phase for both big & small caps, the big caps aren't perceived as having the growth engine that mid/small caps do. Like Exxon, the other commodity dependent traditional energy companies have to acquire new companies to diversify and more importantly, grow for the investor... and like the acquisition of XTO, the acquistion has bogged down XOM but positions itself better for several years down the road.
 
Birchtree said:
You have to have patience. Small caps routinely lead out of a cyclical bear bottom but don't have the stamina for the second leg - we are now approaching the second leg and the larger institutions will gravitate towards the large caps. I wouldn't want to be holding a large S fund position come the next consolidation - by the time the 4 year nesting rolls around I'll only be holding C fund.
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I have a plan in place in our Roth's and regular brokerage to pull out of my small stock ETF positions gradually over the rest of March-April.

From there I don't think we'll have a real peg on a mid-summer correction/consolidation. To make up for the volatility factor I will spend May through November DCAing the cash on a monthly basis into a group of 15-20 individual stocks.

... yes, Birchtree, there will be several dividend paying large caps among the crowd. Large caps will also have a dominant position in the group. I'll post my purchases along the way.
 
If one were to speculate in this market, I would recommend they limit their investing solely to the S Fund. The algos can't push around the big stocks like they can the little ones.
 
Thanks everyone for your inputs and Tom, thanks for posting the chart. I've learned there are things I may never fully understand, but I can accept as fact. This is one of those things, but as long as I can accept it, I can benefit from knowing it to be true.
 
I-Fund
Market Snapshot
​




When evaluating the I-Fund, sometimes it's a good idea to create the comparison chart EFA vs. USD. With this chart you can see prices have pulled ahead of the critical 50% retracement level, and the 20EMA has crossed above the 200EMA.





On the Daily EFA chart prices have pushed into the 61.8% Fibonacci green zone and we are just shy of the 20EMA crossing above the 50EMA. We have buy signals with the TSI, PVI, & NVI indicators.





The Nikkei, FTSE-100, CAC-40, & DAX have their 20EMA > 50EMA > 200EMA. All 4 are trading above the 61.8% Fibonacci green zone.





The Swiss ETF & Sydney are trading in unison with the previous mentioned 4 charts. You may recall is was the weakness in the PIIGS which injected weakness into the overseas markets. PIGGS members Spain & Italy's ETFs put in short-term double bottoms. Both have 8 closes above the 20EMA and 1 close above the 50EMA. They are both still weak, but at least they have made some progress. I'm waiting for their reaction to the 200EMA.





The Dollar is trading at the bottom of it's rising long-term regression channel and close to the bottom of the declining short-term channel. This may be the area we get a bounce, or we could get a bounce at the 50EMA just below. The EURO is still within the Fibonacci red zone but does appear ready for a test of the 50EMA just at the 23.6% retracement. Against the dollar, the Yen has held up best, but is recovering against recent weakness. The Pound poked the 20EMA on Friday but wasn't able to close above or pierce through.

 
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JTH said:
The Dollar is trading at the bottom of it's rising long-term regression channel and close to the bottom of the declining short-term channel. This may be the area we get a bounce, or we could get a bounce at the 50EMA just below.
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Looks like the dollar decided to participate today and smother stocks with it's mightly green goobers... :cheesy:
 
I cannot think of a time in my short life where I have been more saddened by our elected leaders lack of representation and blatant disregard for what the role of government is supposed to be. Never mind the fact we are fighting 2 worthless wars and our economy is propped up on hype. Oh here's the greatest idea of all! Let's spend more money and while we're at it increase your taxes all while silently using your social security money to secure our debt. I really am upset about this and I find the thought of it distressing when I think about the future we have left for our children.

View attachment 8729



Anyways, like usual, I'm looking for direction in the dollar to tell us where stocks are going.

View attachment 8730
 
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