Market Timing – Weekly Stock Market Strategy – June 2011

Weekly stock market strategy updates that went out to subscribers during June 2011. To receive current weekly update sent to your email, click on the FREE TRIAL link at the top of the page.

Weekly Market Update 6/5/11

Below is a list of last week’s economic releases and how the actual numbers compared to the consensus forecast. Three-fourths of the numbers came in worse than expected. This might have a litlle to do with why the averages were off over 2% this week.

Tuesday –
Chicago PMI – Below Consensus
Consumer Confidence – Below Consensus
Wednesday –
ISM Mfg – Below Consensus
Construction Spending- In Consensus Range
Thursday –
Jobless Claims – Above Consensus (bad)
Productivity and Costs – In Range
Factory Orders – Below Consensus
Friday –
Employment Situation – Below Consensus
ISM Non-Mfg – In Range

This week will be quiet in terms of economic releases.

The markets have reached a support level that should be good for at least a small bounce. If 130 on the SPY cannot hold we are in store for a bigger correction. A waterfall sell-off could be a real possibility if the SPY closes below 130 and that is not far from Friday’s close of 130.42. Friday’s price action was enough to change the intermediate term market call back to bearish. This signal has been whipsawed some lately. I am not ready to give up on this indicator anytime soon since it kept me out of the market for most of 2008.

Weekly Market Update 6/12/11

Well so much for a bounce at 130 on the SPY. The SPY is now off almost 7% from the highs set the first part of May. The only good news is that sentiment has gotten pretty bad. The contrarian in me is starting to keep an eye out for a possible bottom. As I stated a few weeks ago, as soon as things look bad enough for the Fed to justify QE3, we should start to rebound.

There are quite a few more economic releases this week. The market could get volatile this week. The sell-off was fairly significant this past week with very few economic reports.

Technically speaking 127 could act as support. If that level is breached 125 would be the next likely target.

I am taking a family vacation this week so I will not be sending out a Weekly Market Update. However if the market dictates I may send out a Mid-Week Update if necessary.

Weekly Market Update 6/26/11

The SPY has not been able to close higher than previous days high for two consecutive days since the end of May. The market has seen some back and forth over the last two weeks trading between approximately 126 and 130. Is the market trying to form a base or catching its breath before the next leg down. I think the later is the more likely scenario. The only thing the market has going for it right now is market sentiment is so bad it’s bullish. That however is not enough for me to jump back in. I need to see it in the price action and we have not seen it yet. A weekly close above the high of the previous week would be a good start. The announcement of QE3 might be another scenario for getting back in. I do not trade on gut feelings but my gut tells me we could be in for another 2008 like sell-off. That is why I would like to be extra cautious getting back in.

Our only market exposure at this time is the 25% allocated to the Quarterly ETF Portfolio. Unless we see a significant rebound over the next week, we could very well see this portfolio go to all cash for the coming quarter. This portfolio is updated when Barron’s does their Quarter Mutual Fund report. That should be the July 11th issue, which hits the newsstands on the 9th.

Market Timing – Weekly Stock Market Strategy – February 2010

Weekly stock market updates that went out to subscribers during February 2010. To receive current weekly update sent to your email, click on the FREE TRIAL link at the top of the page.

Weekly Market Update 2/6/10

I recommend going 60% long on
the open Monday if the SPY is trading above 106.66 but below 107.73.
Once filled place stop at 104.25.

My thoughts on this week’s market

As expected the market managed a modest bounce early in the week. For
those inclined it set up a nice opportunity to sell on Thursday. That,
however, is not the purpose of this newsletter. The market continued
to sell-off until the final hours of the week. The sell-off that
began on Thursday seemed to be brought on by fears of possible debt
defaults by a few of the smaller members of the European Union, and
fear about pending jobs data. What brought the market from -1.75% to
close with a modest gain on Friday, is a little less certain. It
appears that the rebound was technical in nature. Be that as it may,
it is a positive sign that investors became less fearful of holding
stocks over the weekend. I think the lows put in on Friday could
possibly be at least an intermediate term low, that should hold for
a least a month.

In previous emails I have mentioned my use of the 3-period RSI on
daily charts. I like to use it on the weekly charts as well. The
3-period RSI closed below 20 on Friday. This sets up what I believe
is a good point to buy on the intermediate time frame. The last such
opportunity came in July of last year. I am recommending a buy on
Monday morning if the SPY is trading above Fridays close at 106.66.
There is a real possibility the market could gap open significantly
higher. If the gap up is over 1% or 107.73, I would recommend
waiting for a better entry. Friday’s low of 104.58 should hold if
this pullback is over.

Midweek update 2/8/2010

The follow through I was anticipating has not materialized. If you
place your trades for the close, do not place your trade today. If
you did buy this morning as the SPY traded briefly above 106.66,
exit the trade on your first profitable close.

I apologize I was expecting more follow through on the open. A lack
of follow through changes my outlook.

Weekly Market Update 2/14/10

I had recommended going long
last Monday but the opening was not as strong as I had anticipated.
For that reason I sent out an email Monday suggesting no entry or
getting out on the first profitable close. The first profitable close
would have been Tuesday, so thankfully nobody should have taken a loss.

My thoughts on this week’s market

As you know I had expected some follow through from the market
activity of Friday February 5th. When the Mondays open looked as
though the open would be unchanged to modestly higher, I became
suspect. If the market couldn’t pick up any more believers over the
weekend I figured the upside this week would be limited. That is
exactly what we got. The market has seen some serious technical
damage over the last few weeks. At the very least we should see a
test of the February 5th lows and we could possibly see a move lower.
For that reason I think it is best we sit on the sidelines and wait
for a better entry.

Weekly Market Update 2/20/10

The markets had a good week this week. Even though it looks as
though we may have seen a tradable low, I am not convinced. I don’t
know about you, but I am hearing “trillion dollars,” with a little
too much frequency. This week’s edition came in the form of the Pew
Report. I will some it up for you, our states have a trillion dollar
gap in pension liabilities. The states can’t print money, so they
will have to raise taxes, reduce liabilities or both. Raising taxes
and reducing expenditures do not sound like ways to get out of a
recession.
From a technical standpoint the markets are now overbought. The
question is, is the market in a trading range, overbought in a new
down leg, or still in an uptrend? I think it is one of the first two.
If we are in a trading range it is most probably bound by January
19th high and the February 5th low, and the market would probably be
stuck in that range for 4 to 6 months. I however think it might be a
little more likely that we are currently overbought in a new down
leg. If I am correct we probably won’t see the markets trade much
higher than Fridays close this coming week.

Weekly Market Update 2/27/10

It was a relatively tame week. The SPY’s range for the whole week
was slightly more than the 2%. The highs from last Friday did hold
as predicted. The market has come off overbought levels and where it
goes this week is a little less certain. There is resistance at
111.60; we could test that this week. If we see a close over 111.60
then the January highs near 115.15 would probably be the next target.
On the other hand if the market is unable to close over 111.60 this
week, the February lows are probably going to be the next target.
Overall it is a bit less clear how things will pan out this week.
With a unemployment report coming Friday, it is possible to have
another tame week.