67 replies to this topic

[Rich C]

We're above the 200 day moving average for 3 days, a good sign.  But the market is overbought.  It looks like we're trading on a dovish Fed and progress on the China trade talks, and ignoring weak economic fundamentals.  Housing is slow, factory orders weak, retail sales are light, consumer confidence has been shaken (but rebounded last month, a bit), and the analysts have revised first quarter earnings to a slight decrease vs. the year prior quarter although that won't really get into the market until April 10th and beyond.  Seems to me the market is focused on the wrong thing, although the market doesn't ask me what it is supposed to focus on...  I'm cautious.

Edited by Rich C, 15 February 2019 - 09:39 PM.

[Rich C]

Two weeks on, and I would re-write what I wrote mid-February.  We're overbought short term and up against the double top resistance from last Oct. and Nov. at 2815.  If we can decisively break above that, the complexion would change.  I keep voting "partially long, and neutral" in the daily poll, which is where I am.

[Rich C]

I changed my vote in the daily poll to "partially long" and bearish today.  I bought a very small piece of SDS yesterday for a short term trade.  I don't like to go short in a primary bull market, at least not in a big way.  In my long term topic in the Long-Term Investing forum, my monthly update said I think we remain in a primary bull market.

 

My philosophy is that the most important piece of information in investing is "are we in a primary bull or bear market".  It all starts there, and I think it applies to more than the stock market; it applies to real estate, bonds, gold, you name it.  That is why once a month I take a time out and ask that question about the stock market.

 

So much of what we know about how to operate in a bull market is mirror image opposite in a bear market.  So, it is vital to answer the question, and hopefully you get it right!

[Rich C]

I have been voting partially long and neutral in the daily S&P poll for some time now.  When we got over 2815 for 3 days I started a very small position in SPY, the market tanked the next day and I sold it.  I have a few under water positions I don't want to sell so I sell a covered call once in a while, at my cost for the strike price so if it gets called I don't lose anything and keep the sum of several option premiums by now.  Sounds like a China trade deal won't be here until May or June.  Earnings start is a couple of weeks and expectations are low.  I played some bounces in QCOM and will probably do it again.  The market keeps bouncing around 2815 and for me, nothing is proven until we clearly start living above or below it.  I'm cautious right now, don't see the market roaring up for any reason.  I hold lots of cash and wait for a better time to deploy it.

[Rich C]

I remain cautious.  Once we began to live above 2815, I began to make small daily buys in SPY.  I was in QCOM when the lawsuit settled, made $11 a share on that one, but just luck.  Last week I stopped buying SPY, it's overbought and earnings are sort of ragged, misses from some important industrials.  I sold all my SPY, took profit.  The market can go higher for a while, but the percentages favor some pullback after earnings reports slow down in another week.  I hope to buy back at a lower level and am willing to forego any upside remaining because the odds begin to favor a correction.  A China trade deal is out there, and the market will probably pop higher, but I think much has already been priced in based on Kudlow statements.

[Rich C]

Over the last month, I have remained cautious and holding lots of cash.  The US disappointed on the trade talks, not saying its all our fault, but there is no deal.  The threats keep escalating.  No CEO is going to make any big move on capital spending until this is settled.  Europe is slowing.  China is slowing.  The US GDP at the end of July for Q2 will be interesting, seeing estimates of 1.5% growth, that won't help.  Analysts projection at Factset for Q2 earnings are zero increase over last year, uninspiring.  All my trades are short term right now.  I caught a pop on TGT, sold right after earnings.

[Rich C]

Been a while since I've posted on this topic, so here goes.  I bought in slowly in the June / July runup, but I've been cautious all along.  I think there has been too much focus on the Fed rate cut, a quarter of a point, big deal.  There's also been too much focus on the restart of US - China trade talks, now Trump is threatening a new 10% tariff on $300 billion of imports.  Q2 S&P earnings will be flat Y-O-Y.  I think in August there will be a lot of angst over whether Trump will follow thru on his threat to put the China tariff on for Sept. 1.  I don't see that getting resolved, so I expect it will go on.  Long term it appears the long term bull market remains in effect, so I will be working on a buy list and put some stupid lowball buys out there.  It surprises me when they hit, although clearly most do not.  When the market stabilizes I go adjust those buy orders and see what I can pick up.  I bought a little TLT a few weeks ago in anticipation of the Fed rate cut, and with the market correction it has jumped nicely and when it stops going up I will sell it this month.

[Rich C]

We've had a good run the last month.  I'm going on vacation for a week starting 9/21 and don't want too much in the market.  I am starting to lighten up, sold my IWM 9/30 151 CALL and sold GS today.  The Fed is expected to cut by .25% on the 18th and I don't expect anything too bad before that.  Get into Oct., and if history is repeated the China trade talk will disappoint.  Factset projects earnings for Q3 to be down 3% on the S&P.  I'm bullish today, but not about Oct.

[Rich C]

Oct. has worked out better than I thought in Sept.  Govt. announced a mini-deal with China, which I think is a nothing burger, but it is what it is, positive PR for the moment.  Earnings "beat lowered expectations" and nobody worries that S&P earnings will come in 4% below Q3 last year.  But, for the moment the market wants to go up, so I've been buying in slowly.  I've been doing more individual stocks and selling covered calls, and selling some PUTs that have worked out on BA and XOM.  I bought a chunk of SPY with a close trailing stop.  SPY chart looks good for the short term, until earnings season ends.  Then we'll see.  I'm a cautious bull presently.

[Rich C]

I started to sell today.  The Fed's good news is out and they are going to pause, so no more good news for a while.  The trade deal is a weenie if it happens at all.  Earnings season is passing the peak.  Technically the SPY is approaching overbought.  There does not seem to be anything to drive the market much higher.  Maybe some upside earnings reports for the next couple of weeks, but then again, maybe not.  I'm going to wait for a better entry point.  In the daily poll, I will downgrade my opinion from bullish to neutral.