Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Thanks Tek! Now if I can just figure out how to keep it!! LOL
Hope you were able to take advantage.
I think we're setting up for a good move higher.
New position cob tomm. is 60/40 SI.
New position effective tomm.
40/35/25 GSI
Okay, CPI numbers are out and are a little hot. May not sound like a good thing for the market, but it definitely provides clarity moving forward.
Another quarter point rate hike is all but certain and probably priced into the market at this point. We are in extreme oversold conditions and due for a bounce, but I expect some volatility in any event.
Will probably add to my position in stox today.
Stay nimble.
This market has been brutal.
Decided to take a position of 60/20/20 GSI effective tomm.
Not bottom picking, but am comfortable with a modest stake at this point. Will maintain my G holdings at 60% until market gets some clarity with respect to interest rates and inflation.
Funny how quiet the board gets in a down market.
Currently 100% G (since last Tuesday), but not before dropping about 6%.
Ben has another couple of speaking engagements this week. As if he needs help, his fed partners keep echoing his hawkish stance on inflation. Works for me...this is getting to be a great buying opp. These don't come around too often anymore.
I bought some CDE this morning. Thanks again for the tip!!! It looks real good right now.
Thanks Frenchee, looks like a good trade.
A lot of volatility in the markets with emphasis to the downside of late (swift and painful). Not sure what to expect in the ST.
Dollar is still struggling, but if the fed continues to raise rates the dollar should regain some measure of stability (in theory). Unfortunatley, stox can't continue to absorb those increases without remaining under pressure.
The fed is caught between maintaining growth in the economy and keeping a lid on inflation. With the tremendous amount of liquidity generated for the last several years, thanks to the housing boom and cash infusions into the economy, I don't see how the fed can pause in their rate hikes and still expect to hold inflation in check.
I'm starting to think it may be time to maintain some cash reserves and reduce exposure to the market. Money market rates aren't so shabby any more (G Fund even better) and if we've seen the top of this current market for awhile, it could be a sound strategy in the LT.
Just some thoughts.
As seems to be almost tradition with new Fed chairs, "Helicopter drop" Ben is getting his market meltdown check in the box.
With the dollar in free-fall the I fund is probably a good place to sit for the ST. It's like a train doing 80mph. It's probably not going to stop on a dime.
It will be interesting to see where the dollar finally finds support. The FOMC meeting Tuesday has the potential to be a big market mover with respect to currency and equities.
Judging from the dollar's action of late, it would seem the market is betting the fed pauses.
I went 30/70 SI on Friday, but may pull back 50% Monday until after Tuesday. I'm afraid this may be a case of buy the rumor and sell the news.
Good luck all.
Nice move. Paid off very well.
Hey Frenchee, I've been thinking about what may constitute a good entry point into the I fund (assuming it relents sometime this year...LOL).
My thought is this...
It seems to me that the dramatic drop in the dollar is masking the true selling pressure that international stocks in the EFA saw in the past week or so. If a lot of selling already occured we may not see much of a drop in the EFA valuation as it currently stands.
This is also assuming the dollar doesn't make significant gains in the ST (another reason to be cautious).
Any thoughts?
I'm pretty sure that part of the "discrepancy" is because the EFA closes earlier than our domestic markets (Between 1 and 2pm). Since the dip came after that time we ended up with a gain.
I'm betting that today's big uptick will not be the closing gain we see (about 1.4%), but closer to .9%, thus factoring in the drop in the market yesterday (not to mention any "fair valuation" computations).
http://www.msci.com/equity/index2.html
You did well to hold on to the I fund this week. The dollar just kept dropping like a rock. Sure surprised me.
This was a good month for me too. Let's hope we can keep partyin' for awhile yet.
Been real choppy action this week. Making a change of allocation today to 50/50 GS.
The four hour delay, while a hinderance, only prevents true day trading. It does not prevent us from successfully trading our account to maximize gains or avoid a major correction.
Thanks Frenchee. Just goes to show how much currency plays a part in the valuation of share price.
I cannot believe that the weakening dollar today was enough to completely offset the nikkei and euroland markets and end up with a gain. And on a down day for US equities.
Talk about strength.
Staying G for now.
I have no problem trading 100%. I've made a habit of locking in gains when I get them, but I don't usually move completely in or out in one trade.
I am quite comfortable with allowing some measure of a drawdown in my portfolio as very few can predict a top or bottom with consistent results. A couple weeks ago I let 50% of my I fund holdings draw down from a share price of 19.72 to 19.30. The other half I pulled at or near the top. It allows me to see what the market is going to do without completely sitting on the sidelines or unnecessarily exposing myself to a market that is becoming higher risk.
That last runnup we had in the I fund was big, so I pulled a major portion out in one move (80%) and allow 20% to ride. We got a little more upside after a couple of days and that's when one of my rules kicked in...don't get greedy.
We may very well move higher from here in the ST, but our domestic market is not moving higher the way the international market is, so it's unlikely the I fund can continue to move up relentlessly.
The dollar appears to be showing a downward bias right now, therefore I'll probably continue to play the I fund exclusively for the time being. It's been the biggest winner of the 3 equity indices we have.
I was talking about share price. You still 50% I?
When I saw gold/silver I thought the same thing...that equities may follow. Well, I put my last 20% I into the G fund today at 20.04.
Locked and loaded for another round. lol
How bout that I fund! Went 80/20 gi yesterday when it hit 19.96.
I used to think that without the US economy the global market would grind to a halt, but after seeing the numbers of new market participants since 2000 (1.5 Billion people) I now recognize that globalization (through technology) has released an imposing force.
Countries such as India, China, Russia and former satellites of the former Soviet Union are collaborating on a global scale. And they want the same lifestyle we already enjoy.
I'm about half-way through "The World is Flat" and while I know you've read summaries and snipets of its content, if you haven't read the book I highly recommend you do.
I'm all I fund as of today.
Well, a mixed bag today, but at least we didn't have an across-the-board follow through from Friday. I don't mind this action at the moment. It's helped sentiment.
Bonds had a bit a of a rally, especially longer maturity bonds, and that helped keep the market propped up. Too much more bond selling before the next FOMC meeting and we could see a significant slide in equities. I am hoping bonds begin to range right now.
Hopefully metals and oil will back off soon as well.
I'm still 50/50 GI and optimistic for a move higher in the short term.
frenchee,
Certainly the long bond is bearish. I tend to watch the 10 year note due to it's association with mortgage rates.
Before I go on I'd like to caveat this post by saying that I am not a market guru and have a lot yet to learn about the market. I am wondering however, what you mean by some not taking the bearish long bond trend seriously?
It's true that bonds have historically signaled inflation concerns when yields are rising. Inflation is bad for bonds and stox. But I don't think interest rates are so high yet as to warrant a bearish outlook on stox. I see it as a transitory process. Opionions vary widely and as you are aware economics is a dismal science. The market does not follow a script, however we certainly need to be aware of market signals and recognize what the risk premium is for a given position in the stock market.
Market manipulation by the market makers, the Fed, foreign central banks, and government to name some of the major factors, can influence market activity to the point where historical perspective can become quite skewed.
Since our domestic market appears to be chugging along fairly well, (I don't put much stock in government released data, but it is what it is) I would say that there's still some room for a couple more interest rate hikes (not that I want them). Besides inflation concerns we also have a big problem with our twin deficits. Foreign inflows to our bond market have largely been supporting our out-of-control government spending. That risk premium is increasing.
Historically, the Fed tends to push rate hikes for too long and sends the economy into recession. I don't believe there is a particular point where this occurs due to the extemely dynamic nature of the global economy. But of course we need to be aware that this happens all too often in any event.
Until the market shows a trend to the contrary, I fully expect it to continue to move upward in spite of rate hikes.
This is all JMVHO.
Now that the 10 Year bond is at 4.98%, which is the upper range of what I was looking for, I think we should be aware that should the yield exceed 5.00% (a psychological level) it's possible we could see some panic selling on both sides of the market.
While I fully expected to go 100% G today (well before the market opened), I had to reconsider once I saw the morning action. I do not like selling into a sell-off, especially when it could be a knee jerk reaction to market data (in this case the jobs report).
This market has often quickly reversed itself many times in the past. Our inability to sell at selected points makes our decision whether to buy or sell much more dependent on a longer timeline. The only thing worse than being caught in a quick downward move is being out of the market on a quick move up (most recently the I fund).
We can only use the tools at our disposal to gain a sense of where things may be headed with absolutley no guarantee that we will be correct. So I am looking at trends as well as trusted commentary from several sources (which includes T/A).
For quite some time now, when the market has dipped it's been relatively modest by historical standards. So there's an element of risk not only with being in the market when it's moving down, but being out when it moves back up.
Today I decided to split 50/50. I sold another 20% from I to G (yeah, I'm hedging). The magnitude of the sell-off today increased the possibility that the market may bounce on Monday. Plus, bonds are now in the range that I have been expecting so the chance that we could see a bounce in the bond market has also increased (If the bond market bounces I would expect a similar reaction in equities in spite of the historical norm).
I am also very encouraged with the way the I fund held up this week in spite of a rising dollar. That means money is still pouring in. Investors (including us) want to take advantage of a potential double bonus here. Not only did the I fund sell-off, but the dollar strengthened...see where I'm going here??
This is a good basis for what I chose to do today, although I have other reasons.
BTW, the bond market (read F fund) may be playable any time now.
Raised some cash yesterday and went 30/70 GI. Going 100% G today. Good luck everyone!
It would appear that the last 2 rate hikes have finally gotten the attention of the bond market as it is tracking those hikes. Plus, increasing bond yields in some foreign markets are putting pressure on bonds here in the US. The risk premium is going up and if we want to continue to attract foreign bond inflows our yields must rise.
I am looking for a range in the 10 year bond of 4.9 - 5% since that rate hike last week. We are almost there now.
The upward trend of equities in the international market cannot be ignored. I am currently 100% I fund and climbing that "wall of worry".
I agree. I've been convinced for some time that the "I" fund is probably the place to be a some time. Especially given the dollar play.
The problem has been trying to discern when to get in and out of it to boost profit rather than simply buy and hold. But as we've seen recently, when it decides to move it does so in a hurry and downside has been limited.
This just makes me all the more convinced of a longer term upward move, especially with small caps showing so much life.
I'm currently reading the best seller "The World is Flat" and I've come to believe that the term "it's different this time" just may be true with respect to the historcal perspective of the market. Globalization has dramatically changed or at the very least significantly altered market activity on a global scale. This is a new chapter being written and no one knows how it plays out.
One thing's for sure...the printing presses continue to see a whole lot of activity. That probably won't change for the foreseeable future. I won't get into a political dicussion, but our involvement in certain areas of the globe cannot be sustained if our economy goes in the toilet.
Taking a longer view of the market I can not help but see a whole lot more upside, although we'll obviously have profit taking and cosolidation along the way.
Small and Mid caps are still doing well and a rotation into safer equities (large caps) has really not happened.
The Nikkei has been a rocket for a number of months now, a fact that has long since captured the attention of investment institutions.
With all the talk of interest rates being anethema to stox, a point that is well taken of course, but all that talk usually fails to recognize the fact that these paltry quarter point hikes started in the dirt. The question is, at what point does it begin to impact the consumer?? I suspect we can go a little higher yet.
Oil has not been a damper and the consumer seems to be bent on continuing to spend. There is little tangible evidence that our own economy is faltering in any capacity.
The housing bubble??? Big deal, I doubt it "pops" so to speak, but rather levels off in many areas with only the most highly appreciated sectors seeing any large scale drops in resale value. Besides, an event like this takes a lot of time to develop, but articles abound, and have for quite some time that the end is nigh. That's good news cause it keeps some measure of fear in the market.
I also suspect that all that speculative money that's been tied up in real estate for years will slowly find its way into stox.
These are just some thoughts and are only my opinion, but along with using technical analysis I'm trying not to let all those trees keep me from seeing the forest.
Semi's took a turn higher today. May bode very well for the S fund.
Been watching your site for while frenchee. You're market perspective is keen. Appreciate the time you spend keeping it updated. BTW, might I suggest keeping a chart of the dollar on the board since it's a major component of how the I fund is priced? Looking forward to your continued commentary and fund movements. Thanks.
Coolhand