MrBowl's Account Talk

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I'm still 100% S and I really don't want to waste an IFT on selling for a loss. Most of the time patience wins out and dips like this are quickly forgotten. I've fallen further and further back in times when I jumped to safety and watched stocks rise and I only want to exit with a clear topping signal.

I continue to hold on to the belief that during a QE dips/corrections are held to 3-5%, and this idea may be tested soon. However, that applies to the S&P 500 not the W4500, so I will likely have to stomach a bigger dip in the S funda and I'll be loading up on Tums, I suspect.

I still think that although market internals are currently ugly we are not seeing the market bubble pop and there is no oncoming credit crisis right now, so for the past 3-4 weeks we've been zig-zagging as "weak hands" finally reach their "I'm selling when the market hits..." -level, followed by dip buyers pushing the market to slightly higher highs. Will we run out of weak hands or dip buyers first?

I think the late day plunge under 1550 was due to the N Korea situation, as that confused country tries to make an island out of S Korea. News events such as this are always brief and quickly forgotten. So what I see otherwise is a fairly tight range of 1550-1573 for 3-4 weeks with gradually ascending highs and lows.

So at this point I plan to stay in. It could be that I'm completely wrong and in a couple of weeks I'll be writing from the bottom of the Tracker. Time will tell.
 
As of yesterday, this was still Ben's market (in a big way). So I suspect you are correct. I'm anticipating that the current downside action is going to be short term, unless that Fed Put disappears. And as I mentioned already, it's still in play as of yesterday. I did reign in 50% of my position prior to this weakness, but fully intend to hold the rest in C and S unless something changes. I still have 1 IFT left and I'd much prefer to ramp my stock position back up this early in the month. But we do need to be mindful that the sell in May crowd is out there, so while I'm bullish, I'm also wary.

MrBowl said:
I'm still 100% S and I really don't want to waste an IFT on selling for a loss. Most of the time patience wins out and dips like this are quickly forgotten. I've fallen further and further back in times when I jumped to safety and watched stocks rise and I only want to exit with a clear topping signal.

I continue to hold on to the belief that during a QE dips/corrections are held to 3-5%, and this idea may be tested soon. However, that applies to the S&P 500 not the W4500, so I will likely have to stomach a bigger dip in the S funda and I'll be loading up on Tums, I suspect.

I still think that although market internals are currently ugly we are not seeing the market bubble pop and there is no oncoming credit crisis right now, so for the past 3-4 weeks we've been zig-zagging as "weak hands" finally reach their "I'm selling when the market hits..." -level, followed by dip buyers pushing the market to slightly higher highs. Will we run out of weak hands or dip buyers first?

I think the late day plunge under 1550 was due to the N Korea situation, as that confused country tries to make an island out of S Korea. News events such as this are always brief and quickly forgotten. So what I see otherwise is a fairly tight range of 1550-1573 for 3-4 weeks with gradually ascending highs and lows.

So at this point I plan to stay in. It could be that I'm completely wrong and in a couple of weeks I'll be writing from the bottom of the Tracker. Time will tell.
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It's going to be a wild day...already is. Who knows, the market may even finish flat or up. Anyone who buys in on a day like today thinking they are jumping in on a dip may end up cursing our needless 4 hr lag time that the TSP folks impose on us.

That employment number guarantees we'll see plenty of Ben this month. Today's the kind of day he dons the cape and mask.
 
With the nearly constant stream of employment and economic statistics swaying the market up and down and prompting over-confident economists to make predictions on the market its important to note the difference between an economist and an investor.

Jim Cramer, in his show last night, made a good comment about this difference. An investor is only (or should only be) concerned about making gains, whereas a typical economist looks at tons of data and talks about the stats that support his/her position. I see this from some of the most famous and media-friendly economists. Note the recent back and forth between Stockman and Krugman.

Don't get me wrong, I try to soak up as many differing opinions as I can find. But over and over I see economists recommendations or predictions thrown into the Loss column, even though the data they are based on is correct.

A close friend of mine is not permitted to do his own trading due to his job so he uses a fund management company. The company makes 1 move per month, on the 1st business day, then sits on that position until the first of the next month.

They are up 12% this year and currently (for April) are long 140% in a mixture of small and large caps - using leveraged ETFs in order to exceed a 100% position. I've seen them go against the grain of the experts month after month and come out winners. Not every time, but they are well ahead over the long run.

Remember Jan-March of 2012? The talking heads and economists were all warning about the imminent collapse of Europe and how a correction must be right about to happen any minute now. The fund management company remained long and aggressive and made fantastic gains. I remember my friend and I just couldn't believe they'd stay in with a correction about to happen. How reckless!

I'd do a lot better here if I followed their plan and looked away.

My favorite quote regarding statistics:
Statistics are like a bikini - what they show is important, but what they hide is crucial
 
I haven't posted in awhile because I haven't had much to say. One of my goals since the 2008 crash has been to be able to see corrections before they happen and move to the G or F Fund in advance, then jump back into equities at the bottom of the trough. Of course that's easier said than done, and studies show that the smaller the dip the harder it is to identify them ahead of time. Plus, you can do almost as well by just trying to identify the big corrections and riding out the small ones.

Other than about 1 of every 5 or 6 years (like '01, '02, or '08) you can do very well be remaining in stocks 90% of the time and just stepping aside when big corrections appear likely. Still not easy, but a lot less work, and it means you would only need to make 4-6 IFTs per year.

So, I didn't see this (so far) small one coming and now my plan is to ride it out. S Funders this month barely touched the green side last Thursday and now we're looking at about 4% under water for the month. It sucks, but many of my big mistakes took place when I sat on the sidelines and watched the market return to previous highs, and I would've been much better off just riding out the dip.

I still hold on to the idea that during a QE the corrections only reach 3-5%, but since this QE is eternal then we will someday rech a point where QE loses its effectiveness. So, therefore, I should treat each sell signal as the real deal and just get back in quickly if it was a false alarm. That's what I will do, unless I don't see the top :-)

The big questions in my mind are
1) will the 50 dma and my QE theory hold, or not?
2) Is the U.S. economy still strengthening or is it weakening?

I see a lot of arguments for both sides of #2, and the answer to #2 may give the answer to #1. The reason I haven't posted much lately is because I don't really know the answers at this point.

So, because I have gambler's blood in my veins and I'll probably never retire I will stay the course - willing to stomach a further fall while welcoming a sweet upswing that just may commence soon.
 
Lateral moves off a strong move higher get people very bearish almost instantaneously given the back and forth action which ultimately serves to ratchet up bearish sentiment and provides the short fuel for the next leg higher. In a bull market that's just common sense - but never easy to believe. Lateral moves make bears out of many previous bulls and make normal bears become super bears. The necessary energy needed to punch through resistance is being built up in our lateral bases which will need a trigger - like further lowering of interest rates somewhere in the global economy. A gap up/out would serve to trap a lot of short interest. Be in to win.
 
I'm moving 100% to the G Fund COB today. A few reasons why:

1) economic news continues to be poor and this seems to sap all upward momentum at this level

2) Tweet crash yesterday - a personal rule of thumb says such a crash foreshadows upcoming market move, with market ending up below flash crash low before too long

3) Having IFTs left gives me flexibility - I can get back in as early as tomorrow if I'm wrong or if the market falls enough

4) I'm still a bit negative for the month (like all in the S Fund) and I think it might be easier to grab the next 1-2% by buying lower soon rather than a staying for a 1-2% upward move from here

5) That May issue haunts me. I racked up big negative numbers on all of the previous 3 Mays. If I end up out of the market longer I will buy on a dip in May and hopefully break my May losing streak

I still feel all dips will be 5% or less during QE, and longer-term I am bullish and want to spend more time in stocks than out.
 
I still have a move left this month, and with the close today I'm less that 1% down for April.

I can get back in as early as COB Thursday. I most likely will wait till the S&P approaches the 50 dma again. I want to ladder up in this zig zag pattern in order to reach my goals.
 
MrBowl said:
I'm moving 100% to the G Fund COB today. A few reasons why:

1) economic news continues to be poor and this seems to sap all upward momentum at this level

2) Tweet crash yesterday - a personal rule of thumb says such a crash foreshadows upcoming market move, with market ending up below flash crash low before too long

3) Having IFTs left gives me flexibility - I can get back in as early as tomorrow if I'm wrong or if the market falls enough

4) I'm still a bit negative for the month (like all in the S Fund) and I think it might be easier to grab the next 1-2% by buying lower soon rather than a staying for a 1-2% upward move from here

5) That May issue haunts me. I racked up big negative numbers on all of the previous 3 Mays. If I end up out of the market longer I will buy on a dip in May and hopefully break my May losing streak

I still feel all dips will be 5% or less during QE, and longer-term I am bullish and want to spend more time in stocks than out.
Click to expand...


OK, turned out that was not the winning move. It wasn't too long before I was looking for a dip to return. That really juicy dip was Wednesday, and I didn't jump in. In all fairness to myself, the market wasn't down so much at our ridiculous early deadline.

Right now I'm having my best May ever...+0.016%. I'm not sure if I want to risk these gains by jumping into stocks ;). When I do, maybe next week I may go part way into the I fund since it's been a winner lately and the S fund which probably has some catching up still to do from the poor April.
 
MrBowl said:
maybe next week I may go part way into the I fund since it's been a winner lately and the S fund which probably has some catching up still to do from the poor April.
Click to expand...

I'm not sure that is a winning move either. Why, there's a new moon on May 9th and the earth will be at a distance extreme from Mercury. You'll be going in when the lunatics are getting out. ;) :laugh:
 
jpcavin said:
I'm not sure that is a winning move either. Why, there's a new moon on May 9th and the earth will be at a distance extreme from Mercury. You'll be going in when the lunatics are getting out. ;) :laugh:
Click to expand...

Hey, you're talking to a lunatic! :)

I jumped in today. A slightly up day can sometimes be the equivalent to a dip when the bull market is running at full speed. Basically, I didn't have a good reason to remain out and I want to run with the leaders, or at least not lose ground anymore.
 
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