Market Timing – Weekly Stock Market Strategy – April 2011

Weekly stock market strategy updates that went out to subscribers during April 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 4/3/11

Unemployment drops again, now at 8.8%. Headlines like this are all probably 90% of the population is aware of, and on the surface it sounds good. What does not sound so good, and is hardly reported is the Labor Force Participation Rate. This number is the percentage of the population that is employed or seeking employment. The Labor Force Participation Rate is now at its lowest level since 1984. There are now 85.5 million Americans not working or seeking employment. Another way to put the employment situation, we would need to create 245,500 jobs per month until the end of 2016, just to reach the employment levels of December 2007. The good news is there are not many economic releases this week.

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/bernanke/LFP%20March.jpg

As I stated last week if the SPY closes near 134 the intermediate term call will need to be changed back to bullish. I still think that close is fairly accurate. I will send out a Midweek Update when a change occurs. I do not like being whipsawed by the markets. On the other hand I am glad we were on the sidelines during the sell-off after the Japanese earthquake. I would also prefer to error on the side of caution these days. The fed continues to print money by monetizing our debt. To me that creates a very dangerous environment for the stock market and our economy.

Weekly Market Update 4/10/11

Just a quick reminder I am making the adjustments to the Quarterly ETF portfolio. See the Second Quarter ETF’s listed above.

I was amazed the SPY could not close over 134 all week. Maybe our Government avoiding a shutdown will be enough to move the SPY to a close above 134.

The Fed released the minutes from the March 15th FOMC meeting this past Tuesday. My interpretation is they will have a difficult time justifying another round of quantitative easy, a.k.a. QE3. That doesn’t mean they won’t but with signs of inflation appearing I think they increase the risk hyperinflation by doing QE3. I still believe that the primary reason for market move since September 2010 is due to QE. If the fed ends the QE program, I feel pretty sure the market will decline. I am not sure what the trigger will be. It is possible the market could begin a decline prior to any announcement. After all, they would need to give the market insiders time to adjust their portfolios.

Weekly Market Update 4/17/11

The only economic news that was much of a surprise was the jump in jobless claims. The number of 412,000 was 32,000 greater than the consensus number and still stubbornly higher than its 4-week moving average. This week should be a quiet one in terms of economic releases.

Technically there is not much to report. The market has been very quiet the last few weeks. Is this the calm before the storm? We are approaching the anniversary of the May 6th flash crash after all. Who knows what May has in store for us? So far I am happy holding mostly cash.

Weekly Market Update 4/25/11

The SPY has managed to work its way back to testing the 134 level. The more that level is tested the more likely the possibility of it being breeched.

Last week was quiet in terms of economic news. This coming week however, there are potential market moving reports scheduled for release every day but Monday. Not much else to report.

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 Strategy – March 2010

Weekly stock market updates that went out to subscribers during March 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 3/7/10

It was a very good week for the markets. The SPY broke through 111.60
on Monday, and finished the week within 1% of the highs for 2010. As
I said last week once 111.60 was taken out the next logical target
would be the highs made in January. I was surprised the move came as
quickly as it did. It pains me to be on the sideline during a week
like this. I think the upside this week is probably limited. The SPY
is extremely overbought. The VIX has reached a level that has not
been seen since May 2008, shortly before the market peaked. The rally
this week came on lower than average volume. I think the rally this
past week was more likely desperate short covering than aggressive
new buyers.

Weekly Market Update 3/14/10

Another good week for the markets and I am on the sidelines. I got a
buy signal on March 4th. Unfortunately I had gotten used to being
able to get in on a retracement after this particular signal is given.
We have yet to see that retracement. My bad and I am sorry we have
missed this move.

This does bring up a good point regarding diversification. It is
never a good idea to have all your eggs in one basket. We usually
think of diversification in terms of having multiple stocks instead
of just a few. This is why I trade ETF’s like the SPY. It can quickly
become a daunting task trying to keep up with enough stocks to get a
fair amount of diversification. However there is another form of
diversification I want to discuss with you and, that is system
diversification. The SPY system I follow did an excellent job of
being out of the markets when things got ugly. But it is one system
and no one system is right 100% of the time. That is why I think it
is best to diversify with multiple systems that have worked well over
time and are not overly optimized.

I have finished the research on a quarterly ETF system that over the
last 10 years would have doubled your money. I will be adding this at
the end of the quarter for some added diversification.

Not much to say on the markets this week. Unfortunately, I cannot in
good conscience recommend buying the market when it is this overbought.
I will be waiting for something to upset this trend. If congress
manages some resolution on health care reform, that could be the
trigger. I will keep you posted.

Weekly Market Update 3/21/10

Well the market finally ended, on a daily basis, its streak of
consecutive up closes. It was a very impressive run. Bullish market
sentiment has reached a level that should limit any advance from
here. The market should be sideways or down over the next few weeks.
If we get a pullback it could give us a buy setup.

The potential market reaction from any health care reform passed is
the real wild card here. Typically the market seems to know all that
is knowable. The exception would be natural and man-made disasters.
The “buy the rumor sell the fact” saying is what keeps coming to
mind. What I mean is the market has rallied to this point. I think
any sense of finality in regards to the healthcare reform, could be
a turning point.

Weekly Market Update 3/28/10

Well the market continued its climb this week. Not even major
healthcare legislation could stop it. Well if I had not been out of
the market yet I would now be looking for an exit. Momentum has
definitely slowed and we are starting to see technical indicators
set up for a sell signal. The MACD has turned negative for the first
time since February 16th. The RSI indicator is showing a bearish
divergence. More and more sentiment indicators are reaching bullish
extremes. I know last week I said the market should be sideways to
down over the coming weeks. Going into this past week I would have
given the market no more than 2% on the upside. I would be very
surprised if the market is up over 1% at any point this coming week,
and I think we will see negative returns for the week.