MrJohnRoss' Account Talk

[MrJohnRoss]

Congrats MJR. It looks like you timed your entry perfectly$$$

Unfortunately I listened to the talking heads and bailed a few days to soon. I'm not totally disappointed though as I was able to get back into positive territory, so for the time being, I'm on the sidelines waiting for that next entry.

Good luck and congrats again!!!

Thanks ravensfan. Sometimes it's better to be lucky than smart. Perhaps I got a little of both on that last move. It could have gone either way!

JR

 

[MrJohnRoss]

Except for the four days just prior to the election, we're right back into the 4% box that the S&P has been in since July 8th:




The Dow and Mr Tran have skyrocketed to new highs, as have bond yields. Check out the benchmark 10-year Treasury yield chart:




We're now at the highest yield all year. It sure looks to me like it's due for a pullback. I wouldn't be surprised to see an island reversal in the very near future.

So with the S&P and the Nasdaq going nowhere the last few days, interest rates and the dollar shooting higher, what's going to happen with stocks?

My guess is that there is a massive rotation going on, but generally speaking, I think stocks will stay strong, perhaps through the rest of the year, since we're entering the seasonally strong period for stocks anyhow.

Obviously there are going to be pockets of poor performers (tech, bonds, emerging markets), and good performers (financials, infrastructure, health care). Luckily for TSP participants, the S Fund (Wilshire 4500) is doing exceptionally well right now.

Keep your eye on WTIC. If it falls much further from it's current level, it could spell trouble. My composite system continues to register a full bore +3 buy reading, so I'll stay the course. Market internals continue to look good. With the S&P performance remaining relatively tame, there doesn't appear to be any excessive overbought conditions, which is good. Slow and steady may be just what the doctor ordered.

Good luck!

 

[MrJohnRoss]

Very near a breakout to new highs in the S&P:




It would be great to finally break out of the 4% "box" that we've been in for so long. Maybe this time it will finally happen. There sure is some good mojo in it's favor right now. I'd say the odds are pretty good for a continuation of this rally. RSI is only at 65, and the PPO only at 0.435, so we're nowhere near overbought territory... yet. Sure we could see a day or two of consolidation, but momentum sure looks like it could carry this market higher for at least a little while longer.

One of the things I like to look at is the BPI (Bullish Percent Index) for the S&P and Nasdaq. Both look very strong right now. Here's the BPI chart for the Nasdaq:




Definitely a "V" shaped recovery from the pre-election low. We're approaching 62%, so we may not get too much higher, but it could stay elevated for quite some time if the Nasdaq continues to advance.

All three of my indicators remain positive, so the composite remains at a bullish +3 reading. I'll continue to hold the S Fund until I see evidence of a weakening of the internal momentum indicators.

Good luck!

 

[MrJohnRoss]

Great to see the market continue it's climb higher today. The bullish trend continues. Quite impressed with Mr Tran, but also the Dow, S&P and the Nasdaq at record highs. Very nice rally indeed.

With the market doing so well, it's good to take a look at the relative performance of the S Fund vs the C Fund. As you can see from the chart below, since Trump's victory, the S Fund's performance has skyrocketed ahead of the S&P 500, which has done quite well on it's own merits.




The energy sector is really helping to pull the market higher lately. The chart of WTIC (below) shows prices bouncing right off of the uptrend line last week. Oil had a big 4% gain today, which helped the energy sector, which led the market.




Mr VIX is now below 13, a huge drop from the 23 level it was at just prior to the election. I'm expecting the markets to do well this holiday week, but at some point we may get a pullback, or at least an area of consolidation, perhaps once the calendar changes. I also think we could see a very nice Santa/Trump rally in the later part of the year which could take the market to new highs.

Composite system remains at a bullish +3. Chief, if you're listening, keep on spreading that bull manure, it's working.

Good luck!

 

[MrJohnRoss]

Another record setting day for small caps (RUT), the Dow, Mr Tran, and the S&P 500. In the meantime, interest sensitive stocks are getting creamed. One look at the Utilities Index will show that.

With the dollar rising along with interest rates since Trump's win, rotation has been away from bonds and safe havens, and towards higher risk stocks, esp small caps.

Rather than show more charts of how well some of the indices are doing, I also like to look at how some of the poor performers are doing.

The F Fund is looking terrible. I was thinking it might be forming a bottom a few days ago, but it just keeps dropping. See chart below:




Another big 35 basis point drop today. RSI is very oversold, but it may not matter. My guess is that AGG won't find support until it reaches strong support in the 105-106 area, which is another 2% lower from here. Death cross is about to occur as well.

Meanwhile, EFA (I Fund) is also looking very poorly (see chart below):




It's been all downhill since September. Prices are now below the 50 and 200 DMA. PPO is flatlining in the negative zone like a patient in cardiac arrest. Possible support in the 54 area, about 2% lower from here.

I would not want to be a buyer of either one of these funds at this point, but that's just me. No signs of a turnaround at this point in time. Their day will come, it's just not today, IMHO.

Meanwhile, my composite system remains at +3, but my VIX system is getting closer to a possible turn-around, as Mr VIX looks like it may bounce around the bottom a little before turning back up. However, cycle analysis suggests an intermediate term rise in stocks possibly through mid January of next year. That certainly would be nice.

Hope everyone reading this has a wonderful Thanksgiving with family and friends. No matter what your circumstances, or how many problems you have, (and believe me, we all have problems) don't forget to count your blessings.

JR

 

[MrJohnRoss]

A little shakeout today, which I think was much needed. With interest rates and the dollar falling a bit, Utilities got a nice bump. Most other indicies had a minor drop. They had come too far, too fast, IMHO.

The DJIA still has an RSI reading over 72, which is pretty rare. See chart below.




$EMW also has an RSI over 70, but the S&P and the Nasdaq are below it. The question now is, does this drop continue, or is it just a minor step lower on the path higher? Both the Nasdaq and S&P BPI's continue higher, so that's a good sign. Momentum indicators also continued higher today as well. I'm thinking that (at least at this point) we shouldn't have to worry about any large moves lower.

As expected, my most sensitive indicator (Mr VIX) did trigger a sell signal today. The other indicators remain positive, so that puts my composite at +1+1-1 = +1, a hold long position. I will continue to hold at this point, and see what the rest of the week brings.

Good luck!

 

[MrJohnRoss]

Well, quite an interesting day for the last day of November. The big surprise was the (supposed) OPEC agreement, which sent oil prices (and energy shares) skyrocketing.

XLE Energy ETF up 5.1%
XOI Oil up 5.5%
XNG Nat Gas up 6.2%
UGA Gasoline up 6.9%
USO Crude Oil up 8.7%

But there were plenty of other developments as well. With oil prices jumping, we also saw a corresponding jump in bond yields, as well as the dollar. This continues to hurt the PM's and miners, which have been battered. Higher yields caused utilities to fall, but financials to rise.

The chart that stood out to me tonight was the Nasdaq:




That's a big bearish engulfing candle today. Also note the rapidly falling momentum indicators; PMO and Stoch. Possible short term support at the 50 DMA, about 1% lower from here.

Mr Tran isn't looking that much better:




Even though it was up 43 basis points on the day, the momentum indicators are falling here as well. Note the RSI is still above 76, so the engine still needs a cool down. Also note where the 50 DMA is... it's a long way down, about 8%.

There are other signs of a short term top... The Dow printed a gravestone doji today, indicating a failure to stay above water. Biotechs got slaughtered. The BPI for the Nasdaq is looking toppy, and heading lower (but the BPI for the S&P climbed nicely). S Fund is looking like it's topping, as is the S&P. All in all, the bull may have ingested too much, too fast, and is now feeling indigestion, and is getting wobbly, even with the big run-up in the price of oil, which is usually tonic for the stock market.

Dow futures are up 28 as of this post, but if we have another down day, it could cause some of my indicators to trigger a sell, especially my PMO system. November was a good month for equities, no doubt about it. I'll be watching closely to see what the doorway into December brings.

Good luck!

 

[MrJohnRoss]

Dow and Mr Tran headed higher today, but the bad news is most everything else headed lower. Here's a look at $EMW, a proxy for the S Fund:




It's been a great ride higher since the election, but all good things must come to an end (or at least a pause). RSI had gotten too high, so it's time to cool it down. Stoch and PPO are heading lower, and prices are now firmly below the 5 DMA.

The S&P is looking very similar. The Nasdaq is taking a beating.

As expected, my PPO system generated a sell signal today, which puts the composite system at -1. As such, I will exit my equities position and move to cash for the time being.

100% G Fund as of COB 12/2/16.

 

[MrJohnRoss]

A massive decline in the VIX today, down 14%. The dollar looks like it's (finally) starting to top after the big Trump rally. Bond yields look like they might be forming a top, and vice versa, bond prices may be forming a bottom. The Dow and Mr Tran continue their path higher. Nasdaq had a nice 1% bounce. S&P gapped higher at the open, so it will want to get filled.

USO had a bearish engulfing right at prior resistance. The chart of WTIC shows how strong this resistance has been all year:




PPO looks healthy, so we may bust through that resistance. The question is, how far above $50 will we go? I'm not so sure we'll get too far. Maybe 55. Either way, it should be good for stocks, esp the energy sector.

Interestingly, my oscillators are very near neutral on the PPO and PMO systems, but the VIX signaled a buy. Composite reading is technically at +1 (just barely), but another strong up day could move it even further north. That would mean Friday's sell signal was merely a whipsaw, and I could be almost immediately back into stocks. Harumph. That would only be good if the rally lasted through the rest of the month. The worst case scenario would have me go back in, only to see another sell signal materialize right away, and I would have to go back into cash as my last move for the month, and THEN have the market move higher as I sit in cash. Let's hope that doesn't happen. If it does, it's out of my control.

Good luck!

 

[ravensfan]

Patience Grasshopper. We've still got that nasty FOMC meeting to deal with on the 14th,,,:nuts:

 

[pmaloney]

Hopefully Santa will come too. Last year it was the third week instead of the last. :smile:

 

[Whipsaw]

Did somebody say Whipsaw?! Call me an optimist, and this isn't based on anything, maybe the Santa Rally is already starting... = I'm probably wrong, and likely to get bit, but so far so good. The weakness purportedly starts day after tomorrow, I'm on the road so I may have to ride it through the end of the year.

 

[MrJohnRoss]

Patience Grasshopper. We've still got that nasty FOMC meeting to deal with on the 14th,,,:nuts:

Ravensfan, this is true, but most everyone knows the odds of a rate hike are like 99%. I'm thinking it's already baked in to stock prices, so there should be no surprises. (Famous last words). We shall see.

 

[MrJohnRoss]

Hopefully Santa will come too. Last year it was the third week instead of the last. :smile:

Pmaloney, Hmmmm... maybe Trump and Santa are one and the same. Either way, I'll take the rally. (wink, wink).

 

[MrJohnRoss]

Did somebody say Whipsaw?! Call me an optimist, and this isn't based on anything, maybe the Santa Rally is already starting... = I'm probably wrong, and likely to get bit, but so far so good. The weakness purportedly starts day after tomorrow, I'm on the road so I may have to ride it through the end of the year.

Whipsaw, I'm hoping you are correct in your prediction of an early Santa Claus rally. We could all use a little year-end boost to the bottom line.

 

[MrJohnRoss]

And yet another day higher for the major averages. Today's positive action sent all my oscillators to the buy side. Whipsawed out, and now going back in. I was hoping we'd get a lower pullback to get back in, but I've learned my lesson for not following my system.

100% S as of COB 12/7/2016.

 

[ravensfan]

And yet another day higher for the major averages. Today's positive action sent all my oscillators to the buy side. Whipsawed out, and now going back in. I was hoping we'd get a lower pullback to get back in, but I've learned my lesson for not following my system.

100% S as of COB 12/7/2016.

I know what you mean MJR. I changed my investment strategy in November and am already out of sync with it. Had I stuck to my guns I would still be invested and very happy with the returns. However I'm sitting on the sidelines patiently waiting to get back in.

Good luck with your decision to get back in. Now go and knock it out of the park.

 

[clester]

I know what you mean MJR. I changed my investment strategy in November and am already out of sync with it. Had I stuck to my guns I would still be invested and very happy with the returns. However I'm sitting on the sidelines patiently waiting to get back in.

Good luck with your decision to get back in. Now go and knock it out of the park.

I expect we will get that pull back before Christmas. Maybe around Fed? IDK, but i'll buy that pull back. Anyway, should be a pull back before Christmas before a rally into January. At least my system has me in 50%. Keeps my psyche positive. I can claim victory or at least some sorta victory.

 

[MrJohnRoss]

I know what you mean MJR. I changed my investment strategy in November and am already out of sync with it. Had I stuck to my guns I would still be invested and very happy with the returns. However I'm sitting on the sidelines patiently waiting to get back in.

Good luck with your decision to get back in. Now go and knock it out of the park.

Thanks ravensfan. As the 'ol saying goes, "Plan your work, and work your plan."

Best of luck to you with your investments as well.

 

[MrJohnRoss]

I expect we will get that pull back before Christmas. Maybe around Fed? IDK, but i'll buy that pull back. Anyway, should be a pull back before Christmas before a rally into January. At least my system has me in 50%. Keeps my psyche positive. I can claim victory or at least some sorta victory.

Clester, very smart of you to keep 1/2 of your account fully invested during this bull run. Let's just hope we don't see any big bad bear runs anytime soon to spoil that strategy.