I don’t post much because I don’t think I have much expertise to offer, but I figured I get these thoughts out of my head and maybe they will help somebody else or get a response to something I’ve missed.
One thing first. The G fund to me is not a place to make money. It is a place to avoid losing money. It works for me. I don’t trust Bonds because the manipulation can wipe out a month of gains in a day or two. Not that the markets can’t, but well I just don't like bonds.
Now on to what I wanted to post in the first place.
So, I sat on the sidelines through that October run up. I just couldn’t see the risk/reward as worthwhile on any given day. Not happy about it, but it’s in the rear view mirror (sort of) now. This coming week could be interesting. One of the scenarios I've been looking at could start and give the C or S fund a possible play. Will we get a small leg back up approaching the 200 dma (SPY) and then a fall for a new low for the year? Or will we just keep plodding lower into the new low? Or find a new trading range?
Personally, anything approaching a Bullish run up to the end of the year just doesn't make any sense to me. I don’t care what Santa says, take a look at the jpg link below and think about it. I do like contrarian ideas, but still... if it does rise and I bite, then I’d jump near the 200 dma. Of course maybe everyone else might think this too.
One play I'd love to make is with the “I fund”, but it still has a way to spiral IMHO. But a magic rabbit could be found hiding in somebody’s European press conference and give us a week or two of pop. I don’t think that will happen till some key meetings in early-mid December. This would be taking a big risk to get ahead of the herd though. Euro politics and power grabbing are just as bad as ours, if not worse. Could this be the way Germany finally conquers Europe?
The I fund has a 24% weighting in financials and that makes the following extremely relevant for price:
The US Dollar is on an upswing (DXYO 79.83). One article I read said this Bullish Dollar could go on for about 17 weeks total. Was a trending/cycle thing. Out of my league on that one.
Europe is snapping a strand at a time. Last week we saw Belgium downgrade ala Dexia SA, Italy/Spain Bond prices, and Germany unable to find buyers. Sure I missed some other important developments.
- Belgium, Slovenia, Spain, Italy, Ireland, Portugal, Cyprus and Greece have all had their credit rating cut this year, and Japan is being looked at as well now. Hungary to Junk status.
Not all of these are countries that directly relate to EFA but they all weigh in on the mess.
EFA is sitting at 0.16 above the low it set back on 7 June of 2010. The next lower low was in July of 2009.
Tasty prices, but when it finally bottoms it could be a nice ride up.
As for the USA…this jpg sums up our reality till 2013 and maybe beyond.
http://www.marketoracle.co.uk/images/2011/Nov/or33__01__600.jpg
I don’t argue politics because for me it’s a waste of time. I follow this board for insights for my TSP. And duly appreciate CH and Tom’s blogs, much thanks to both of you.