Market Timing – Weekly Stock Market Strategy – September 2011

Weekly stock market strategy updates that went out to subscribers during September 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 09/05/11

The big economic number this past week was the employment situation. The private sector added zero jobs in July. This economy is a long way from being in recovery. There are no big economic numbers in this holiday-abbreviated week. We will see if jobless claims can show a sub 400k print. That has happened only once in the last 20 something weeks.

Last week I mentioned a bear flag formation and was hoping to see some closes over 120. We did manage to get 4 closes over 120 before closing out the week at 117.85. I don’t think the bear flag formation can be dismissed yet. The shape of the flag is different but still there. We will start the week in a short-term oversold position. If the market is truly trying to shake of its bear legs we will need to see a change in the short-term direction by Wednesday. Another possibility is the market may still need to get a closer test of the early August lows. If the SPY manages more than two closes under 110, look out below.

Weekly Market Update 09/10/11

There were not many economic reports this past week. The only one worth commenting on is the Jobless Claims. Jobless Claims again came in over 400k.
In fact the 4-week moving average of claims is now over 414k and has been rising the last four weeks. This coming week has a lot more economic releases. The more significant releases will be PPI and Retail Sales on Wednesday. Thursday is CPI and the Philadelphia Fed Survey. The Fed Survey saw a huge drop last month. It will be interesting to see if that trend continues. On Friday we have Consumer Sentiment. This number also saw a rather large drop last month.

Technically the bearish flag formation I mentioned a few weeks ago is still forming and is still a real possibility. So much so that I am concerned a close below 112 on the SPY would more likely mean the beginning of a new down leg. Previously I had left open the possibility of a closer test of the early August lows. International stocks heavily represent our Quarterly ETF Portfolio, and three of the four ETF’s have taken out there August lows. The Quarterly ETF Portfolio has been the weakest link in our overall portfolio. Unfortunately the strategy calls for us to keep the positions until the end of the quarter. I will ride these positions until the end of the quarter. I would not blame you if you decided to exit these positions now. They are substantially under water and are not likely to get close to even before the first week in October.

Weekly Market Update 09/18/11

A quick summary of all the economic reports this past week. Year over year the Producer Price Index is up 6.5% and less food and energy PPI is up 2.5%. Year over year Consumer Price Index is up 3.8% and less food and fuel up 2.0%. Retail Sales have now been flat for the past two months. Both the Philadelphia Fed Survey and Empire State Manufacturing index concur that business is contracting in that region. Last but not least jobless claims came in at 428k. The 4-week average is 9k higher than it was a month ago. Consumer Sentiment stabilized after last months plunge. Overall, nothing positive came of this weeks reports.

Stocks finished the week with the second best weekly performance in a year. I am asking myself, “Is the “risk on” trade back in play?” I am reading not widely published reports that a European bank bailout will be US dollar denominated. Which really means the Fed will print more dollars to bailout Europe. I am not sure why this is not getting more coverage. If it is true it could explain the move back into some riskier assets such as stocks. Technically the move this week did nothing to negate the negative outlook we have discussed the past few weeks. The market is currently short term overbought and near the top of the recent range.

Weekly Market Update 09/25/11

Last weeks economic releases had a couple points of interest. Existing home sales were up 18.6% on year over year basis. This is about as good as news has gotten lately. However we are a long, long way from a healthy housing market. Jobless claims came in at 423k and revised the prior weeks number from 428k to 432k. The Fed announced “Operation Twist” to target longer term yields. This may not have been the QE3 that the market was hoping for. That along with more bad news out of Europe was enough to reverse last week’s nice gains. The number I am interested in seeing this week is GDP. I suspect this number will come in below consensus of 1.2% and I think there is a real possibility this number misses badly.

As I stated last week, the markets positive performance did nothing to negate the bearish outlook for the market. This week the market took back everything it gave the previous week and then some. Unless there is some real resolution to the issues that plague Europe and, I don’t mean another bandage when an amputation is required, we could see a continuation of the sell off. The only possible positive outcome I can see is that maybe we are just retesting the August lows. I think this is a slim possibility at best. I think the Fed said it best this week when they said there is “significant downside risk.”

Market Timing – Weekly Stock Market Strategy – February 2011

Weekly stock market strategy updates that went out to subscribers during February 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 2/6/11

The big economic number this past week was the employment situation. The headline number was the unemployment rate dropping from 9.4% to 9.0%, which sounds like good news. However, the articles I read did not explain that the main reason for the drop was 500,000 people stopped looking for a job and were no longer considered part of the workforce. When things are so bad that that many people stop looking for jobs, that is bad news. The nonfarm payroll number showed a gain of 36,000 jobs, unfortunately that was 100,000 under the consensus estimate. So at best one might say the economy is flat lining and that is probably being generous.

But don’t let bad economic figures worry you the markets bounced back nicely this week. Technically we may be out of the woods for the time being. This coming week is pretty quiet in terms of economic reports. So any surprises would most likely have to be external. I am going to wait at least one more week before I move our stop on the SPY.

Weekly Market Update 2/13/11

It was a relatively quiet week on the economic front this past week. The market struggled on the open Wednesday thru Friday. However, news of Mubarak’s resignation took the markets from a weak opening to a very strong close on Friday. This coming week should be a little more interesting on the economic front. There are several economic numbers being released this week that have the potential to move the markets.

I refuse to fight the strong trend we are witnessing in the U.S. stock markets. However, there are a few things I would like to point out that you should be aware of so as not to get to complacent in this bull market. Yields on 10 year treasuries have risen from 2.4% to around 3.6% since October. I know that this is still a relatively low rate but it is also a 50% jump in yield. 1987 saw a similar directional move in the stock and bonds prior to the crash that year. Mutual Fund cash levels are at levels that usually coincide with market underperformance going forward. Penny stocks have seen a rise in volume that indicates your average investor has forgotten all about the May 6th flash crash and is getting a little to comfortable with stocks.

I came across an article this week that gives a very persuasive argument about expected future returns in the stock market. It goes into detail how we could see negative real returns for the stock market over the next ten years. If that is true, we all need to keep a close eye on our investments and remember that the buy and hold philosophy, for now, is probably dead. If you have the time you should read the article I have the link below.

I am moving our stop on the SPY to 127.25.

http://globaleconomicanalysis.blogspot.com/2011/02/negative-annualized-stock-market.html

Weekly Market Update 2/20/11

There is not much to report this week the markets continue to move higher. The economic reports that came out this week were somewhat bearish but not enough to keep the markets down.

I did come across another article this week that again discussed the probability of low market returns over the coming decade. I have included a link for you.

http://www.hussmanfunds.com/wmc/wmc110214.htm

Midweek Update for 2/24/11

The market has had a decent sell off over the last three days. The good news is so far it has been an orderly decline. In other words nothing resembling the May 6th flash crash. I have a technical setup that indicates a buy above Thursday’s high in the SPY. However something feels very different this time. With all the turmoil in the oil-producing region we have seen little flight to quality in the US dollar. Even during the Greece riots the first week in May 2010, we saw a strong flight to the dollar. Of course a lot of that had to do with the Euro tanking at the time. But still, I have to wonder if there is something bigger going on here.

With the market PE as high as it is right now I cannot recommend adding to current positions. If the market does bounce off these levels I will be moving our stop up to just below recent lows. I could be wrong this time but the risk levels are just to high.

Weekly Market Update 2/27/11

So far the correction has been orderly and a bounce on Friday
was expected. What the next few weeks brings will be the
critical for intermediate term picture. Will the markets
hold Thursday’s low? Will we be able to make new highs? I
think any attempt to test the highs on the SPY near 135 will
be a good place to lighten our exposure to the markets. The
uncertainty of events in the Middle East and the
corresponding increase in oil and gas prices I think could
be a real problem for the markets going forward. Rising
commodity prices were already going to squeeze company
margins. Increasing fuel costs will surely dampen any
economic recovery that may have been occurring. I will be
moving our stop to 128.75.

Market Timing – Weekly Stock Market Strategy – September 2010

Weekly stock market strategy updates that went out to subscribers during September 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 9/5/10

The market must have run out of sellers because the economic numbers I saw surely would not have caused a rally one or two weeks ago. The market started the rally on Wednesday based on positive economic data out of China. Does anyone else find that odd? China makes the stuff we buy not vice versa. So what likely happened was there was a lack of any new sellers willing to come to market prior to the holiday weekend.

This rally has successfully pushed us up against resistance and I would be very surprised if we saw another day like the last three. At most I think we have one or two moderate up days before this move tops out. If we do manage a close over 113 on SPY, I will have to reevaluate my position. We are light on domestic economic reports this week. The monetary policy announcements from Canada and England could shed light on the prospects for their economies going forward. President Obama has said he plans to announce a new economic stimulus plan this week. If this is another spending plan I doubt the markets will like it.

Weekly Market Update 9/12/10

Instead of one or two moderate up days like I expected, we ended up with a moderate week. The DJIA, Nasdaq and, S&P 500 were all up less than one percent for the week.

The markets yawned off the new proposed economic stimulus package. After all, it is only a measly $50 billion.

I am feeling like a glass is half empty kind of guy right now. I am just not buying the positive spin on some of these economic numbers. Normally a reduced trade deficit would sound like a good thing right? However when we import nearly everything that tells me we aren’t buying as much as we used to. Exports were up in the report but imports declined 2.1% from the prior month. We will see what the Retail Sales number looks like on Tuesday. Maybe those numbers will make the glass look half full.

We are right up against resistance at 113 again this week. Retail participation in the market has been seasonally week. Any breakout above 113 without retail participation would be suspect. I will be monitoring the market and sending a email out if I make any changes to the intermediate term forecast.

Midweek Update for 9/20/10

Well the SPY managed to close decisively over 113. I am going to have
to bite the bullet and make our intermediate term call bullish. I
recommend making a buy position in SPY for 25% of your portfolio on
the open Tuesday morning.

There are times when things just don’t add up, but you must go with
trend. I would prefer to be adding on a pullback, and I will be
adding to this position if we get one. The market is currently
overbought. However that does not mean a pullback is imminent. That
is why we are opening a position now.

Weekly Market Update 9/19/10

The SPY did manage two closes over 113 and the 14 period RSI did manage 3 closes over 60. Normally I would have to consider moving the short-term call to bullish. However, we have some conflicting signals going on. The QQQQ has decisively closed above the mid June and early August highs. The SPY and the DJIA have not been able to make a convincing close above their mid June and early August highs. In addition to that the volume has been week in the SPY and DJIA. A look at the On Balance Volume also shows the Nasdaq 100 is the only index that has made new highs with good volume.

The economic reports that came out this week were very neutral A New York newspaper is reporting that poll workers are having to file tax withholding forms for the first time ever. If poll workers are required to do this in all states this could give the employment numbers, that come out in October, an artificial boost.

I am waiting to see a couple convincing closes on the SPY before I will change the intermediate term call to bullish. I will send out a mid-week email if that occurs.

Market Timing – Weekly Stock Market Strategy – August 2010

Weekly stock market strategy updates that went out to subscribers during August 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 8/1/10

The market finished the week basically where it started. The bulls and bears are in a tug of war, and the outcome has yet to be determined. I would say that positive earnings are what is driving the bulls. While weak economic numbers and, a unclear future, are what is guiding the bears. I am leaning slightly toward the bear camp. If the SPY can manage a couple closes over 112, I would have to reconsider my stance. Right now I am happy watching the tug of war from the sidelines.

Weekly Market Update 8/8/10

The SPY managed a couple closes over 112 this week. These higher closes were able to get the 14 period RSI to close over 60 on the daily charts. This triggered my RSI buy setup that will move our intermediate term market call to bullish if the SPY can close at 113 or higher.

Except for Friday’s price action most of the week was spent trading between 112 and 113 on the SPY. Friday’s action showed some early weakness on the monthly employment figures, but manage to recover most of the day’s losses near the close. The inaction early in the week was a result of traders waiting on Friday’s employment data. The hesitation in the market is due to uncertainty as to weather we will see a “V” or a “W” shaped recovery. A “W” shaped recovery is a double dip and seems like the most likely outcome. This is not a forgone conclusion though and has a great deal to due with the current market uncertainty. Traders will be looking to various economic reports to give signals as to which type of recovery is most likely. Increased volatility in the coming months is almost a certainty.

Weekly Market Update 8/15/10

Talk about pennies from heaven. The SPY closed Monday at 112.99, literally a penny from where I thought I would have to turn my intermediate term call to bullish. I don’t know if that was dumb luck or not but I am glad we did not go long before the sell-off began. The indices took a hit this week, losing 3-5%. The market is now oversold going into the weekend. The question is, are we oversold enough to find support or, will this level just be a speed bump on the way to lower prices? If we do not start seeing some positive economic numbers, I will be leaning toward the speed bump scenario.

Weekly Market Update 8/22/10

The markets were mixed this week. On a short-term basis we have found a range between 107 and 111 on SPY. The 107 level has become a kind of line in the sand. If the market cannot hold this level the July lows near 102 will be tested. On the other hand we are somewhat oversold here so anything is possible. We may have to see how the economic reports come out this week. Lately they have pointed toward a weaker economy.

Weekly Market Update 8/29/10

The 107 level on the SPY was breached on Tuesday. It looks like the 104 level is going to act as support. I thought that since that level was broke in early July it might not act as support this time around. Judging by Friday’s price action I guess I was wrong.

The stock market is oversold on many levels but, one thing is bothering me. We haven’t had a high volume capitulation like sell-off. When everyone seems to have given up then we can start to look for at least a bounce. Friday’s unemployment numbers has the potential to set the trend for the next few weeks. Just keep in mind the initial move is sometimes corrected by the end of the day.

Market Timing – Weekly Stock Market Update

The following emails went out over the last several weeks to our subscribers. If you would like to receive more timely market updates, go to the FREE TRIAL page and enter your name and e-mail address where it says join BuyandHoldisDead.com.

Due to the volatility in the markets I have included the current Market Update that went out to subscribers.

Weekly Market Update 10/3/09

Our profit margin took a hit this week. I have moved the stop for all long SPY positions to 101.49. This stop was sent out in a mid-week update. If we get stopped out we are sitting pretty close to break-even.

The Volatility Index or VXO as spiked higher and generated a sell signal for the SPY. This is part of the reason I am leaving our stop right below Fridays low. I don’t want to get caught long if the market decides to sell off sharply. The RSI, which is one of my favorite indicators, is very close to indicating a change in trend. On Friday the 14 period RSI closed at 43.17. If the RSI closes below 40 for more than a couple days, I would no longer be looking to buy dips.

Mid-Week update sent out 10/2/2009

The market is expected to open down another 1% today. This is on top
of Thursdays sell-off. This is not the time of year I like to see
Sentiment and economic numbers change.
I recommend exiting all long SPY position with a sell stop @ 101.49.
If the market fundamentals improve we can always get back in later.

Weekly Market Update 9/27/09

I am leaving our sell stop at 100.32. We have reached a point in this retracement where it is safe to consider adding to our long position with limited risk on the down side. I am only looking to add an additional 10% to our long position if filled we would be 30% long. I will place a buy stop at 105.46. If the market continues to make lower highs I will be lowering this stop.