Nordic's Account Talk

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Shouldn't be surprised

This pullback should not be a surprise to anyone, the only question is how far it will go....personally I'm looking at the 1460-1440 area as a possible re-entry point. Rising dollar, increasing VIX, and bearish PMO crossover were warning signs that we were due for some weakness in equities. It's been a helluva run over the past few months, time for a breather.


"Injections: For some time now, every month the Fed has been injecting $85 billion into the bond market. The problem? The money is not real, it is artificial. It does not exist. As the highlighted shows, the injections are nothing more than building up a market artificially."


Pullback Begins For The Market - Seeking Alpha
 
Re: Shouldn't be surprised

I agree. I retired Dec.31, so I am being extremely conservative. 100% G. When this market reaches a significant bottom, I will get in. That may be later next month after the dust settles over the sequester and who knows what else. It's annoying to let money slip thru one's hands, but it's horrible to lose money. Patience is the name of the game. The market's time scales are sometimes days, more often weeks and months. Humans want things to happen in days or at most a week or two. One has to overcome that.
 
Re: Shouldn't be surprised

polarbear said:
I agree. I retired Dec.31, so I am being extremely conservative. 100% G. When this market reaches a significant bottom, I will get in. That may be later next month after the dust settles over the sequester and who knows what else. It's annoying to let money slip thru one's hands, but it's horrible to lose money. Patience is the name of the game. The market's time scales are sometimes days, more often weeks and months. Humans want things to happen in days or at most a week or two. One has to overcome that.
Click to expand...

Indeed, patience is something I continue to struggle with. I'm trying to look a little longer term, but it can be difficult. With DC and Europe continuing to make the headlines it's hard for me to remain invested for long periods of time, at least for now.
 
overview

An Overview of The Markets | Puru Saxena | Safehaven.com

"According to our methodology, Wall Street is currently in correction mode and this is not the time to invest fresh capital in stocks. It is notable that although major US indices advanced on Tuesday and Wednesday, volume was very low and this warrants caution. Moreover, volume picked up during Thursday's late stage sell-off and this negative action suggests that the ongoing stock market pullback may continue.

Once again, although it is very difficult to make accurate predictions, it does appear as though the US Dollar is likely to strength over the following months and it is conceivable that we may be in the early stages of a multi-year rally. After all, the US Dollar Index fell by over 40% between 2001 and 2008 and today, most people are convinced that the world's reserve currency is a lost cause. Thus, bearing in mind the magnitude of the previous downtrend and the lopsided bearish sentiment, the stage may now be set for a big rally in the Federal Reserve's currency."


Intermediate and long term, we are at a high point in the cycle, and with all the uncertainty in DC I'm inclined to sit on the sidelines a bit longer until the direction becomes more clear.
 
Buy the dip

"Warne advises clients to buy stocks on the dip, expecting any decline to be short-lived. A steadily growing economy and strong corporate profits should ensure that stocks remain attractive."

Buy the dip, stocks still better than treasurys, investment gurus argue after lousy jobs report - The Tell - MarketWatch


After being out of stocks for the better part of a month, I decided to jump into the I fund today. Dollar looks prime for a pullback, and I fund has been outperforming C and S recently. This may end up being a very short term move for me to capture some April gains.
 
Re: EFA breakout?

I took advantage of today's I fund gain and went to the sidelines for the rest of the month. All time highs in both the Dow and S&P 500, it will be interesting to see where they go from here.
 
H&S in the leaders

Head and shoulders patterns in both of these charts.


041713d.gif



041713c.gif
 
Re: H&S in the leaders

I was watching for this in the W4500, but it didn't turn out as clean. I wish I had been following these two. Lesson learned - watch more charts. Thanks!

Nordic said:
Head and shoulders patterns in both of these charts.


041713d.gif



041713c.gif
Click to expand...
 
Higher still?

Well, I haven't posted since I bailed to G fund about 5 weeks ago. With "Sell in May and go away" and "Sell high" convincing me to hit the sidelines in mid-April, this rocket ship of a market has been most impressive. Win some, lose some. Congrats to those who have hung in there and taken advantage of the bullishness. I'm inclined to continue to wait it out at this point in the game.

Carl Swenlin has some Kool-Aid for y'all to drink:

Decision Point ®: Long-Term Breakout - Chart Spotlight

"Conclusion: The S&P 500 is in uncharted territory, and the only resistance is the top of the rising trend channel, at which point we would expect a consolidation or correction toward the point of breakout to begin. The long-term breakout implies that prices are going to go higher, and the parabolic nature of the advance implies that it is likely to accelerate."
 
Market turmoil

"In my opinion, it's still early in the turmoil in global financial markets. The cannons are indeed still increasing their rate of fire."

Market turmoil hasn't peaked yet - 1 - - MSN Money


I know the markets don't like to hear it, but I personally look forward to the day that the Fed doesn't have to continue to buy bonds to keep the markets afloat. Feels like market welfare to me...forget that, let's get back to sound fundamentals and rising markets based on corporate success.

The obvious question is how much of a rebound will we get, and when would the entry point be?
 
Notes on the week

"The harsh reaction (quite a bit more than I expected, especially with such a tepid adjustment to the expected trajectory) is great evidence of how over-dependent the market is on the view that the Fed's support makes losses extremely difficult. And, I will say again, this would be so much easier if the Fed wasn't telegraphing everything, because then investors would have invested with much more caution. The reaction this week was partly due to the shock of actually hearing the Fed mention a date for the first time."

Quick Notes on the Week | Michael Ashton | Safehaven.com
 
pullback in November?

"In fact our technical analysis tells us that the market has a little higher to go before it experiences a 5 to 8 percent decline in November. With Apple (AAPL) slated to release earnings on Monday and the FOMC rate decision on Wednesday, there is probably just enough expected good news to keep the market from falling over the next few days, but if the trading patterns line up according to our current combined midterm analysis we expect the market to conduct its own tapering thereafter." Traders get ready for a great November- MSN Money
 
more November prognosticating

"My best guess continues to be that stocks will extend this consolidation on Friday and then deliver one more push higher into the FOMC meeting next week. I expect the Fed will confirm no tapering which will likely trigger a big rally and probably reversal as smart money traders sell into the emotional move. Barring an immediate Fed intervention, that should give us the drop down into the half cycle low." Time to Sit on the Sidelines | Toby Connor | Safehaven.com
 
Dollar trend possibilities

"The next few months will be critical. In fact, the data for October could also reflect the government shutdown. As a result, the Federal Reserve should wait until the first six months of next year to decrease the quantity of Treasury purchases. The US dollar index could rise to around 81.60 before December's decision and then decline toward 78.00 by year's end." US Dollar: Will It Increase Short-Term? | Angelo Airaghi | Safehaven.com
 
futures

So futures are mixed this morning after the release of the jobs report shows stronger payroll data. Why? Because this means the Fed may start scaling back it's welfare program before the end of the year. I'm obviously not an economist, but that's a bizarre mentality for average folk to grasp. Hey Wall St, let's get back to sound economic fundamentals and actually cheer a strong jobs report. Enough of the Fed manipulation already.
 
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