XL-entLady's Account Talk

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As of close of SPX today, we've crossed both the 5-day and 10-day simple moving averages. :) Still 98 points below the 20-day SMA, so keep your powder dry.

Lady
 
I've started reading Jason Kelly's comments lately. He's not shrill or high volume, and he gets good marks from the "review the commentator" sites. For example, Kelly's 60% on http://www.cxoadvisory.com/gurus/ and the highest score is a 68%.

Here is something Kelly wrote about where he thinks we are now in the markets, from The Kelly Letter.

"....Since we adopted a cautious stance in mid-August, we've been eyeing October as a time for the market to find a bottom and for us to put money to work. I don't see any developments so far that are inconsistent with that plan. Events are falling in place along those lines.

Now, if the Oct. 10 lows don't hold, we don't find support until all the way back down at the dot com bust lows of 2002 and 2003, which are a heck of a long drop from here. Let's call that the worst case scenario with hope in our hearts, because if THOSE levels don't hold we're strapping on the rappelling gear for a drop back to the early 1990s.

Worst case scenario dot com bust support awaits at:

Russell 2000: 345 (34% down from here)
S&P Midcap 400: 389 (30% down from here)
S&P 500: 800 (15% down from here)

According to MACD and RSI, we are already much more oversold than we were at the dot com bust lows, indeed than we've ever been before, so the chances of dropping another 15% or 30% look unlikely. Hence I'm calling it the worst case scenario.

Here's the comparison:

Russell 2000 dot com low: -12 MACD, 40 RSI (now -49 and 36)
S&P Midcap 400 dot com low: -9 MACD, 33 RSI (now -58 and 33)
S&P 500 dot com low: -21 MACD, 36 RSI (now -76 and 36)

Unless everything has come unglued and all measurements that worked before are broken, technical analysis says we should get a rising market soon.

At this point in the discussion, somebody is bound to raise the specter of the Great Depression. All comparisons go back to it because we're supposedly facing an economy that's the worst we've seen since the 1930s. Maybe, but there's quite a gap between that economy and ours today.

In the Great Depression, unemployment exceeded 25% in 1933. We still haven't hit 7% now. Bank runs were a chief concern during the Great Depression, but they've been kept at bay now by government guarantees and increased FDIC insurance coverage. People of the Great Depression lost faith in the financial system. People today have not.

However, even if things get as bad as they were in the Great Depression, we can still make money in stocks. From its 1932 bottom to its 1937 high, the Dow gained 333%. It then fell 47% over the next year, gained 57% in the next nine months, dropped 35% over the next three years to January 1942 when it finally embarked on the multi-decade bull that saw it rise 869% by 1965. Buying through the depression was the right move.



So, to recap, we expected a bottom in October and we look to be getting it:
  • The market is more oversold now than it has ever been.
  • The charts are drawing a young W-shaped bottom.
  • The economy, while bad, is nowhere near that of the 1930s.
  • The stock market turns up before the economy.
We planned to buy near the October bottom......"


http://jasonkelly.com/

Lady
 
It's interesting stuff Lady and who knows??

I would say that no group of individuals is more convinced that a bottom is near; that we are at the bottom; or that things are on the verge of taking off more than this group. I seriously do not mean this as a slam to our group - but this site is largely focused on 'quick trades' and seizing timely situations.

When I listen to independent Market Briefs - I get a totally different picture. None of them see the Markets stabilizing (and all the more being solid and taking off) until October of 2009 minimum. There has been too much that has transpired over the past several months and way too much ongoing right now for me to think we are on the brink of a sustainded "Bull Market".

Anyway - I know you've largely been in Safety and I hope the very best for you; but watch out for anyone telling you "things are good"
 
Steadygain said:
It's interesting stuff Lady and who knows?? .... I know you've largely been in Safety and I hope the very best for you; but watch out for anyone telling you "things are good"
Click to expand...
Thanks for your comments, Steady. Honestly, I don't think things are good. I think we're going to test the S&P 800 level. (Alevin, when you said that a few months ago, it sounded so pessimistic, and NOW that's the optimistic version. Wow!) If we break through that 800 support level, then I think we're going to get our butts handed to us on a platter.

And again honestly, if I could ensure an up day, I'd probably sell the 15% I have in various equities and wait out the storm in G. But with the daily timeframe we have to make our IFT requests in and the daily volitility of the markets, it's too hard to pick that up day to sell into.

My current trading plan is to hold the equities I have now until the volatility of daily ups and downs quits. But that 800 level is my stop, and if we break through that then I'm going to sell and take the hit, because I'm not going to eat my seed corn.

That's my plan. Comments from others will be gratefully accepted!

Lady
 
XL-entLady said:
Thanks for your comments, Steady. Honestly, I don't think things are good. I think we're going to test the S&P 800 level. (Alevin, when you said that a few months ago, it sounded so pessimistic, and NOW that's the optimistic version. Wow!) If we break through that 800 support level, then I think we're going to get our butts handed to us on a platter.

And again honestly, if I could ensure an up day, I'd probably sell the 15% I have in various equities and wait out the storm in G. But with the daily timeframe we have to make our IFT requests in and the daily volitility of the markets, it's too hard to pick that up day to sell into.

My current trading plan is to hold the equities I have now until the volatility of daily ups and downs quits. But that 800 level is my stop, and if we break through that then I'm going to sell and take the hit, because I'm not going to eat my seed corn.

That's my plan. Comments from others will be gratefully accepted!

Lady
Click to expand...

Lady,

I would be happy with 3 moderate trading days in a slightly positive move and then I would jump back to G for the rest of October, even with a 20% decrease in my TSP. Wish I had some shares in the F fund right now. :) The market seems to drop big on low volume. So the question is, "who is manipulating the market"?:confused:
 
Happiness Is A Journey...
-- Father Alfred D'Souza


For a long time is seemed to me that life was about to begin -- real life.
But there was always some obstacle in the way, something to be gotten through first,
some unfinished business, time still to be served, a debt to be paid.
At last it dawned on me that these obstacles were my life.
This perspective has helped me to see there is no way to happiness.
Happiness is the way.
So treasure every moment you have and remember that time waits for no one.
Happiness is a journey, not a destination.
 
XL-entLady said:
Happiness Is A Journey...
-- Father Alfred D'Souza


For a long time is seemed to me that life was about to begin -- real life.
But there was always some obstacle in the way, something to be gotten through first,
some unfinished business, time still to be served, a debt to be paid.

At last it dawned on me that these obstacles were my life.

This perspective has helped me to see there is no way to happiness.
Happiness is the way.
So treasure every moment you have and remember that time waits for no one.
Happiness is a journey, not a destination.
Click to expand...

OR perhaps we could say:
Happiness is not something you find - it is something that finds you

it is a quality that is discovered - that is all emcompassing, refreshing and exhilerating

it is losing attachments to things and finding even greater attachments in the sacred bonds of love and friendship

it is being absorped in the swirling clouds of the brightest and purest of white light with blue spects as the diamond is formed
 
I think tomorrow might be an up day. It doesn't matter whether it is or not. I'm selling some more of my tiny portion of equities.

I've been thinking about posts I've read with hard evidence that it's going to be a steep slope. And my gut has been telling me we're going to test 800. Now my buddy James has just posted the nudge I need to revise my trading plan:

http://www.tsptalk.com/mb/reputation.php?p=189830

If the charts look like we're going down to 875 near-term, and if I think we're going to go 10% more than that in the intermediate term, and if I know that starting this weekend I'm not going to have time to study the markets for at least two weeks, then why am I holding on to that last 15% in equities right now?

Man, I've been writing too many "Whereas ... Therefore" statements lately! :blink:

So I'm planning to unload some more of my C Fund and the rest of my S and I Funds tomorrow. By close of business tomorrow, I'll either be 91% G, 4% F and 5% C, OR I'll be 96% G and 4% F. Got to think about that.

For what it's worth,

Lady
 
When I posted my "tired of tsunami surfing" IFT comment in the tracker this morning, I didn't know I had a mind link to Greenspan! :laugh:


Greenspan: It's a 'credit tsunami'

Former Fed chairman says crisis will pass, and U.S. will end up with 'far sounder financial system.'

By Aaron Smith, CNNMoney.com staff writer
Last Updated: October 23, 2008: 10:26 AM ET
NEW YORK (CNNMoney.com) -- Former Federal Reserve Chairman Alan Greenspan told a House committee Thursday that the nation will emerge from the current credit crisis with a "far sounder financial system."
"We are in the midst of a once-in-a century credit tsunami," Greenspan told the House Oversight and Reform Committee.


http://money.cnn.com/2008/10/23/news/economy/committee_regulatory/index.htm?cnn=yes

Lady
 
XL-entLady said:
When I posted my "tired of tsunami surfing" IFT comment in the tracker this morning, I didn't know I had a mind link to Greenspan! :laugh:


Greenspan: It's a 'credit tsunami'

Lady, this doesn't surprise those of us who know how bright and intuitive you are!
Click to expand...
 
Well gang, I've been saying it for a while but now it's time to pack and go on my latest project. I'll be lurking as I can, but probably can't actively post until mid-November.

I'm 96% G and 4% F as of COB today. As I said when I posted my IFT this morning, I'm glad to be out of the tsunami.

You all take care of each other while I'm gone, okay? And play nice. We get too many bruises from the rest of the world, we don't need to get them from each other.

Lady
 
Have a great and safe trip. Sorry you can't play with us for a while.


Everyone....PLAY NICE!!!!!

C ya Lady, Until the next intellectual oasis encounter!:cool:
 
Everytime you go away

............you take a piece of me with you.


Wow!! I will really miss you Lady.


but I hope everything goes well.
 
A quick post because Jason Kelly is good and I thought his comments interesting.

BTW, I'm 96% G Fund and watching carefully. Don't eat your seed corn.

[SIZE=+2]The Nikkei Commits Seppuku[/SIZE]
October 24, 2008

The situation here in Japan has finally become so bad that non-financial people are chattering about it. That's a bigger moment than it is in America, because a much smaller percentage of Japanese than Americans follows markets and the economy. ....

Today, the Nikkei collapsed almost 10% to 7649, a level even lower than its dot com bust bottom at 7700 in April 2003. To see today's level on the historical chart, we have to go all the way back to the early 1980s when the index was on its ascent to the bubble top of 39,000 in 1989. It looks like Sony's bad earnings report shamed the Nikkei into committing seppuku.



The news here has been overwhelmingly bleak:
  • Japan's trade surplus fell 94% last month.
  • For the second quarter in a row, Sony (SNE) cut its profit forecast and the stock dropped 14% today to a 13-year low.
  • The yen hit 95 per dollar, the strongest it's been in 13 years.
What to do? ....

There's always an opportunity.

What this means for U.S. stocks is that bad news is making progress. The flaying of confidence worldwide is well underway. When even Japanese housewives know the Nikkei's closing level, the name of the U.S. Federal Reserve chairman, and that the yen better stop strengthening if their export economy is to have a prayer, you can be sure that better informed Americans are close to maximum pessimism.

And you know what they say about that moment. "
http://jasonkelly.com/

Lady
 
XL-entLady said:
A quick post because Jason Kelly is good and I thought his comments interesting.

BTW, I'm 96% G Fund and watching carefully. Don't eat your seed corn.

[SIZE=+2]The Nikkei Commits Seppuku[/SIZE]
October 24, 2008

The situation here in Japan has finally become so bad that non-financial people are chattering about it. That's a bigger moment than it is in America, because a much smaller percentage of Japanese than Americans follows markets and the economy. ....

Today, the Nikkei collapsed almost 10% to 7649, a level even lower than its dot com bust bottom at 7700 in April 2003. To see today's level on the historical chart, we have to go all the way back to the early 1980s when the index was on its ascent to the bubble top of 39,000 in 1989. It looks like Sony's bad earnings report shamed the Nikkei into committing seppuku.



The news here has been overwhelmingly bleak:
  • Japan's trade surplus fell 94% last month.
  • For the second quarter in a row, Sony (SNE) cut its profit forecast and the stock dropped 14% today to a 13-year low.
  • The yen hit 95 per dollar, the strongest it's been in 13 years.
What to do? ....

There's always an opportunity.

What this means for U.S. stocks is that bad news is making progress. The flaying of confidence worldwide is well underway. When even Japanese housewives know the Nikkei's closing level, the name of the U.S. Federal Reserve chairman, and that the yen better stop strengthening if their export economy is to have a prayer, you can be sure that better informed Americans are close to maximum pessimism.

And you know what they say about that moment. "
http://jasonkelly.com/

Lady
Click to expand...

Lady,

Be sure to stay in touch as much as ya can, cause your comments and presence sure will be missed.

CB
 
Hi gang,

I'm still on my business trip but since it's the weekend we're only having to work half-days, so I have a chance to catch up with my MB family again. I've missed you!

I haven't posted the chart comparing the current fund prices against the simple moving averages lately. That's because I ran out of Tums! :laugh: But there is a little green in among all that red again. So I thought I'd give you the numbers in case you're interested.

I don't think we've hit "the" bottom yet. I'm trying to decide whether to burn an IFT to get into the market for election day. Is it going to be a 'buy the rumor, sell the news' thing? Or will it be worth being in for a few days? Hm-m-m. Probably not. But I'm thinking .... I'm thinking.

I know that we're still going to have to be nimble, but November will be a much better month than October, IMO. Of course, in comparison to last month, any month is probably going to be a good one .... :rolleyes: :laugh:

Y'all take care,

Lady


,,,,,,,,,,,,,,,,,,,G Fund,,,F Fund,,,C Fund,,,S Fund,,,I Fund
10 day SMA: ,,,+0.0%,,,-0.9%,,,,,2.4%,,,,,,2.8%,,,,,2.2%
20 day SMA: ,,,+0.1%,,,-0.9%,,,,,2.8%,,,,,,1.5%,,,,,1.0%
50 day SMA: ,,,+0.3%,,,-2.5%,,,-13.8%,,,-18.5%,,,-16.7%
100 day SMA: ,+0.7%,,-2.5%,,,-19.8%,,,-24.9%,,,-25.8%
200 day SMA: ,+1.4%,,-2.7%,,,-24.8%,,,-28.7%,,,-32.6%

The above numbers are the differences from the simple moving averages (SMAs) for each
fund, based on Thrift Fund share prices and simplified by being recorded only once a week.
Because I'm trying to look at trends I've highlighted any changes < or > 0.5%. Follow the
column down in order to see how a TSP Fund is trending long-term.
 
Last edited:
I'm watching sentiment to gauge what the weeks election might do to the markets. That will give us some idea of what "da boyz" will do. I'm pretty sure they'll be using the emotional aspect of this election to spike the VIX and create some whipsaw action.

I'm 100% C going into it. If I had daily trades I could be much more flexible, but in this environment that's impossible. I will say that I think a rally is looking good. I suspect there's more risk to be out than in at the moment. I'll be looking to post some info in my thread over weekend to hopefully provide some idea of how the market's set-up.

I am expecting some selling on Monday, though. But not a lot of it.
 
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