The Art of Deception

Not surprisingly, today's action retraced some of yesterday's impressive gains. At the close the DOW and Nasdaq posted modest gains, while the S&P 500 was modestly lower. Small and Mid-Caps took the brunt of the selling pressure in today's action.

Perhaps notable on the day was that treasuries were hit hard, with the yield on the 10 year note hitting a multi-month high of 2.25%. Gold was down better than $50 as well. These are suppose to be safe havens so it's a bit interesting to see this action one day after the Fed announced it was keeping rates at current levels for an extended period of time. I'm not reading too much into this right now, but that kind of action has the potential to be bullish for stocks.



The Seven Sentinels officially remain in an intermediate term sell condition. The system did trigger an unconfirmed buy signal yesterday, but NYMO still needs to tag a 28 day trading high to confirm it.

Make no mistake, this market is doing its level best to deceive the masses. The bearish arguments are compelling. There are no shortage of downside indicators either. Most of you have probably read Tom's commentary, so you should be aware of some of those downside risks. I would think most bulls would be at least a little nervous right now, and the bears have to be feeling somewhat insecure too. In spite of the new highs achieved by the broader market yesterday, caution is still readily seen on the MBs. How will sentiment continue to react? So far it's been supportive of upside action just when the downside looks the most promising.

As uneasy as I am about the downside, I am also still wary of this bull.

 

[crispy]

Only my 2nd yr on here. Was 3 or 4 percent above the S last year until July/August. Then started making impatient moves and the whipsawing killed me. Trying to practice patience this year but right now its killing me. Thinking the risk for the market to go up is lot more than than getting out and waiting on a dip. Yet I'm still 100% S.

 

[coolhand]

Only my 2nd yr on here. Was 3 or 4 percent above the S last year until July/August. Then started making impatient moves and the whipsawing killed me. Trying to practice patience this year but right now its killing me. Thinking the risk for the market to go up is lot more than than getting out and waiting on a dip. Yet I'm still 100% S.

Whipsaws for us are even more hard to take given the delays to initiate transfers, so it's a real concern. The speed of some of those moves in a whipsaw environment can hurt us on both sides of the trade too. That's partly why I chose to ramp up my IRA contributions and lower the one's in TSP. The IRA gives me much more flexibility.

 

[crispy]

I don't have the luxury of an IRA unfortunately. Single father, two boys, working for the BOP. Got n in 98'..but divorce and not knowing enuff has limited my gains. 85k as of today for tsp total. 9 yrs to retirement. Contributing 10%. Buy and hold has not worked for me so far, and in my judgment cant see how it does for anyone that would choose to n todays market, so I'm trying to facilitate it a bit. Just not for sure how. Trying to pick up as much info as posssible off here and the media to make the right calls. Lol house is paid n 4 more years so I will be able to up it then. Guess my question for now is it time to start putting back some of the 85k or keep trying to time the market with all of it?

 

[coolhand]

I don't have the luxury of an IRA unfortunately. Single father, two boys, working for the BOP. Got n in 98'..but divorce and not knowing enuff has limited my gains. 85k as of today for tsp total. 9 yrs to retirement. Contributing 10%. Buy and hold has not worked for me so far, and in my judgment cant see how it does for anyone that would choose to n todays market, so I'm trying to facilitate it a bit. Just not for sure how. Trying to pick up as much info as posssible off here and the media to make the right calls. Lol house is paid n 4 more years so I will be able to up it then. Guess my question for now is it time to start putting back some of the 85k or keep trying to time the market with all of it?

I understand your situation. I've also been through a divorce and I know what the financial ramifications of that can be.

I think many main street folks like us realize that buy and hold is not a viable approach in general and we're searching for a way to take more control of that element of our retirement. This is a common theme that I hear often. But you're at least trying to understand the playing field, which is key.

I've spent almost 8 years learning about the market on this board as well as other boards and I've also subscribed to numerous professional services in that time. The professional advice helped a lot, but it is still a challenging game for many people (including me).

The best I can do is offer some measure of education, which is a big part of my focus in this blog. Tom (TSP Talk) does the same thing and his analysis is among the best I have seen. So continue your education, it'll help you in the long run in ways you may not recognize today.

 

[crispy]

Thanks, I appreciate your comments and time.

 

[Guest]

Funny how all the idiots on CNBC have been saying for months that maybe it's not a good idea to be in the markets and now after it's been up so much they're now asking "should you get in"? Seriously, I really wish ill will on all of them. We'res a good earthquake over lower Manhattan during trading hours when you need one? Come on Mayans, make my day!

Anyway, I have made about 12% so far this year in the S Fund (currently on the sidelines) and hope to God Tom is right about a sell off after a new high which was again posted on TSP yesterday. Hopefully starting next week & maybe if all goes well it's started by a Mayan doomsday event! Wooo, that felt good to let out some steam. Appreciate all you've done Cool Hand to try to make sense out of a sense less market.

Anyone here day trade? Am I alone or does anyone experience this scenario. You by a stock that's rising, it immediately reverses. You sell one, same thing, reverses. You buy and hold, it goes up and then down further then you bought it at and keeps going. You buy and sell for a small profit, it keeps going up. Can't seem to get in right anymore.

My gut says that today was the day the FED was suppose to release the bank stress tests but JP Morgan leaked it on Tuesday as to get ahead of the herd. Also Wall St. had to keep pushing Apple just to get to S&P 1400 (today). Without retail, how the heck are they ever going to keep it going? Pullback next week? WTF?