Not What I Was Expecting

Well, I wasn't surprised that we saw some selling pressure today as I did point out in yesterday's blog that TRIN and TRINQ were both suggesting an overbought market, which means a pullback is likely. But after such a strong rally on what appeared to be a possible key reversal day I certainly didn't think we'd see the market take out Monday's lows so soon. Especially given that market character had typically seen a market run in one direction for days at a time on an initial burst of strength (or weakness depending on the type of reversal). But then, QE2 was far from complete during those days. Now it's just a couple of weeks from ending, with no read on where the Fed goes from there. And the Eurozone isn't helping, nor our own economic data. But given the bearish sentiment, bearish data could eventually set the table for a significant rally. Apparently, we aren't there yet.

But it's just one day, and OPEX can be a volatile week.

In any event, today's action dropped the S&P 500 to a three month low and it's now with spitting distance of its 200-day moving average. And it's about 8% down from it's May high.

So what's the excuse for the selling this time? Nothing new really, just more concern over fiscal instability and social unrest in Greece. The Euro got hammered as a result and if you hadn't noticed, the I fund really took a beating as the dollar rallied in large measure on the Euro's weakness.

On the domestic front, the May CPI reading showed a 0.2% increase, which was just a bit higher than economists expectations, while core CPI was up 0.3%, which was also higher than expected.

June's Empire Manufacturing Survey came in at -7.8, which was much lower than the 10.0 that economists were looking for. Also, May industrial production increased a 0.1%, which once again was lower than estimates.

Treasuries bounced back on today's rout of equities, which saw the yield on the 10-year Note drop back below 3.00%.



Back to sells for NAMO and NYMO. The good news is that they didn't tag new lows.



NAHL and NYHL also flipped back to sells.



Yesterday, TRIN and TRINQ predicted selling pressure due to an overbought condition. Today, they are both saying we're oversold, which (if we're still in a bull market) should translate into another rally very soon.



No relief for the bulls here. BPCOMPQ continues its slide and remains on a sell.

So after seeing 6 buy signals yesterday, all signals have now flipped back to sells, but the system remains in a sell condition regardless.

I'm not backing off my expectation from yesterday's blog comments just yet. Today was a big curve ball, no doubt, but I'm still thinking the low comes very soon and some measure of a rally will materialize. That's my pre-FOMC announcement outlook. What happens after that is anyone's guess right now.

 

[Guest]

I have 15% in GENERAL, the rest in I, C, and S (65%). Not doing anything but making sure nt bi-weekly purchases are S, C and I. Ut's great that we have a buring opportunity

 

[coolhand]

I'm 100% S except for my last contributions which are still sitting in G. I agree with you, this is probably a buying opportunity.

I have 15% in GENERAL, the rest in I, C, and S (65%). Not doing anything but making sure nt bi-weekly purchases are S, C and I. Ut's great that we have a buring opportunity

 

[Guest]

I'd managed to get out near the May tops and sat safely in the G fund until Monday the 13th, at which point I went 50% C/S. I figured we'd get a run up into the 1295-1305 trading area, then get out. Was pretty proud of myself for getting in just in time to catch a great bounce on Tuesday. At Tuesday's close my account was at an all time high. I told my trading partner Tuesday afternoon that our plan was to take the S fund money out on Wednesday (thinking it would go up a little bit more before another turn around). The early morning moderate pull-back solidified that decision, so we pulled the S fund. Got out with a very small gain there...hardly worth the loss of a move this month; today's slight bounce kind of rubs my nose in it. Not sure what to do with the 50% still in C since it seems like oversold, overly bearish, etc, just isn't enough to give any kind of bounce. Feels to me like the downside risk is much greater here than the upside.

Point for me is that the Market continues to punish you when you pat yourself on the back for a good move by taking it away right then.

This voliatility and our restrictions are just too frustrating. I'd corresponded with a reporter from Federal News Radio or some such thing a couple of years ago and complained of these restrictions; he told me that the TSP was going to offer some kind of managed funds that weren't just lock-step bound to the major indexes. I thought he said in 2011. No sign of such a change in anything I've seen...has anyone else heard this rumr?

 

[coolhand]

This volatility has been tough for a long time now. It was bad enough trying to recalibrate my trading strategy after we were limited to two IFTs, but now we've got these wild swings that come and go to deal with too.

Haven't heard anything about managed funds. I'll have to check it out.

I'd managed to get out near the May tops and sat safely in the G fund until Monday the 13th, at which point I went 50% C/S. I figured we'd get a run up into the 1295-1305 trading area, then get out. Was pretty proud of myself for getting in just in time to catch a great bounce on Tuesday. At Tuesday's close my account was at an all time high. I told my trading partner Tuesday afternoon that our plan was to take the S fund money out on Wednesday (thinking it would go up a little bit more before another turn around). The early morning moderate pull-back solidified that decision, so we pulled the S fund. Got out with a very small gain there...hardly worth the loss of a move this month; today's slight bounce kind of rubs my nose in it. Not sure what to do with the 50% still in C since it seems like oversold, overly bearish, etc, just isn't enough to give any kind of bounce. Feels to me like the downside risk is much greater here than the upside.

Point for me is that the Market continues to punish you when you pat yourself on the back for a good move by taking it away right then.

This voliatility and our restrictions are just too frustrating. I'd corresponded with a reporter from Federal News Radio or some such thing a couple of years ago and complained of these restrictions; he told me that the TSP was going to offer some kind of managed funds that weren't just lock-step bound to the major indexes. I thought he said in 2011. No sign of such a change in anything I've seen...has anyone else heard this rumr?