Sensei's account talk

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Just as a reference, I'm getting out at SPX 1404. I don't expect to sit out long, but here are my reasons for the IFT:
  • I looked at 20 day SMA/EMA, and both are over 2% below the current price. Feels like nosebleed territory.
  • S&P has now closed positive 6 of last 7 sessions.
  • While our Sentiment Survey stayed on a hold, it was very bullish - and a "hold" signal on the SS seems to be a coin toss.
  • As of yesterday, top 50 were 96% in stocks, bottom 50 were 91% cash & bonds. Seems ripe for a rebalance.

One more IFT to get me back in. If next week proves me wrong, I won't be too proud to eat a loss to get back on the bull train. I'm seeing too many members sit in defiance on the sidelines and miss out on all the gains of this bull.
 
There is now a possibility of a large reallocation out of low yielding bonds and into stocks - you don't want to miss this flood. U.S. profits can grow in a period if not fantastic, but OK, GDP growth. Margins will go to levels we haven't seen in 50 to 60 years. I say be prepared for a +300 point up day.
 
So how are thing after the earthquake/sunami and the volcano tossing rocks and stuff?
 
Birchtree said:
There is now a possibility of a large reallocation out of low yielding bonds and into stocks - you don't want to miss this flood. U.S. profits can grow in a period if not fantastic, but OK, GDP growth. Margins will go to levels we haven't seen in 50 to 60 years. I say be prepared for a +300 point up day.
Click to expand...

If we get a 300 point gain this week or next I'll treat you to lunch at Costco here.
 
nasa1974 said:
So how are thing after the earthquake/sunami and the volcano tossing rocks and stuff?
Click to expand...
Was there another earthquake? Earlier in the week they had a 6 point-something up in Mainland, but we don't feel them down here in Oki. There's a lot on TV about "what if" the big one hits Tokyo. And my wife says Fuji might erupt again some day. Sounds pretty exciting, eh?
 
Sensei said:
Just as a reference, I'm getting out at SPX 1404. I don't expect to sit out long, but here are my reasons for the IFT:
  • I looked at 20 day SMA/EMA, and both are over 2% below the current price. Feels like nosebleed territory.
  • S&P has now closed positive 6 of last 7 sessions.
  • While our Sentiment Survey stayed on a hold, it was very bullish - and a "hold" signal on the SS seems to be a coin toss.
  • As of yesterday, top 50 were 96% in stocks, bottom 50 were 91% cash & bonds. Seems ripe for a rebalance.

One more IFT to get me back in. If next week proves me wrong, I won't be too proud to eat a loss to get back on the bull train. I'm seeing too many members sit in defiance on the sidelines and miss out on all the gains of this bull.
Click to expand...

So I'm in G, as in "my Goose is cooked" because this market defies gravity. I shoulda stuck to my plan of waiting for a close below the 20 before selling. If this goes up another several percent and I'm on the sidelines, I might as well have bought and held until losing about 2%. Ah well, at least I have an 11.49% gain so far this year. As soon as I see a red day, I'll probably buy back in. What a sucka!
 
Sensei said:
So I'm in G, as in "my Goose is cooked" because this market defies gravity. I shoulda stuck to my plan of waiting for a close below the 20 before selling. If this goes up another several percent and I'm on the sidelines, I might as well have bought and held until losing about 2%. Ah well, at least I have an 11.49% gain so far this year. As soon as I see a red day, I'll probably buy back in. What a sucka!
Click to expand...


11.49% is great for 3 months of the year. Be happy. You might get a chance to get back in today, if you have any IFT's left.
 
jkenjohnson said:
11.49% is great for 3 months of the year. Be happy. You might get a chance to get back in today, if you have any IFT's left.
Click to expand...

I do have one more ITF. If I had 2, I'd probably buy in at 50% today. I'll have to decide whether to buy back in today or wait and see. Always a tough call.
 
Everyone should remain afraid of the I fund - it's not for the weak of heart. But I'm content with my 80% position and will hold the line.
 
Thanks for the visits while I slept. :)

Now that I'm awake and the deed (IFT) is done, here are my thoughts:

  • DAX found support at the 20 day SMA.
  • Dow Transports found support at the 20 SMA.
  • S&P still has some daylight above the 20 SMA, but going back to January, the pullbacks have been shallow and haven't often needed to go that low.
  • We've had 3 red days in a row in the S&P. Only once have we had 4 throughout this bull market, and the last day wasn't nearly as bad as the first three.

On to what worries me:

  • There's still daylight below the S&P.
  • The VIX hasn't gone up that much over the last few days. Still lots of potential volatility ahead.

Finally, for reference:
I sold at SPX 1404. Bought back at SPX 1392. Small steps.
 
It will be interesting to see what the European markets do. If the DAX makes a move u p off the 20 I'd feel more confident the S&P would also hold the 20. If the DAX loses the 20 it could be a real ugly open and I'm sure many eyes will be on an S&P test of the 20. Tom always says that he looks for at least 3 days to confirm a direction change. It's pretty clear momentum is waning but I still think the trend is our friend.

This sucker's gonna break one way or another, so at this point allocation is all about one's risk tolerance.
 
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