S&P Sell Signal

What did usay? wrote:

Blowing.Rock Master wrote:

Do what you want with this info, but I am closing all my long term stock positions tomorrow.

Thank you very much. You and the other panic sellers will help draw the market down even lower. I'll definitey be positioning myself to buy in the coming days. A year from now I'll have the last laugh.

Buy stocks that will be rapidly declining in value? Genius.

It is best to be among the first sellers during panic sales

The New UncleB wrote:

It is best to be among the first sellers during panic sales

No, it is best to be a buyer during panic sales.

Off the Grid wrote:]

Momentum outperforms the US market by 3%/yr. In the case of the FTSE, 8%.

Oh no you dint wrote:

Thanks for the links. Did you read them?

"Amid the ebb and flow of the market cycles investors will experience, a detailed view of momentum's rocky track record..."

actually, I did

For anyone interested, here's a chart comparing Buy & Hold, versus Coach D's 19-39 Weekly Exponential Moving Average Cross and the 10-40 Weekly Exponential Moving Average Crossusing the S&P 500.

http://tinyurl.com/3cuqemx

The chart begins on 4/14/1975, very near the lowest point for the stock market in 12 years. The chart only shows the point gains, it does not show the value of a monetary investment. If it did, the 19-39 and 10-40 systems would be even farther ahead of Buy & Hold.

Bruce McNall wrote:

Vanguard.

"Over the next decade, Mr. Bogle said stocks are likely to generate an average annual return, including dividends, of around 7%. "Your money will double in 10 years," he said. "How bad is that? People ought to get over the illusion [of higher expectations] and realize that they may have to invest for longer time periods, start earlier and save more."

Worth noting from your article: "Mr. Bogle's own portfolio consists of roughly 80% bonds, mostly tax-free, and about 20% stocks. All of his stock funds consist of holdings traded on U.S. exchanges."

always a bull mkt somewhere wrote:

Worth noting from your article: "Mr. Bogle's own portfolio consists of roughly 80% bonds, mostly tax-free, and about 20% stocks. All of his stock funds consist of holdings traded on U.S. exchanges."

Well he is 82 after all. I doubt he would recommend a similar mix for someone younger.

In the very long run, trend following returns are about double those from buy-and-hold. The period between 1983 and 1999 is a statistical anomaly with returns not seen any other time in the history of the US stock market.

That said, we are thus far better off NOT taking the sell signal (yet). At least with 19wk/39wk, there has always been a rally following a sell signal to approximately the 40 week EMA, where it failed and the new trend (short) comes into place. Over the next few weeks, the 40 week EMA will be in the 1250-1260, which is just at the start of the congestion from 1250-1300 which by traditional technical analysis should be expected to be major resistance.

We also should factor in that the market decline which set off trend following sell signals is a POLITICAL event rather than a market or economic event: The debt crisis brought on by the Tea Party spoiled children. If there are no similar crises and the Europeans stop looking like they are going to collapse any day, there ARE positive factors like corporate profits and mutual fund cash which could make this sell signal false.

No reason not to wait to see if the market fails at the expected place.

Actually, I hope you're right and I'm wrong. I'd rather get back in in a few weeks and continue riding the market up, even if I miss out on 5%-10%. That'd be better than sitting on the side line making 0.1% for 2 years.

You should have thought of that before you sold during a panic.

So.... coach d is a 19wk/39wk trend follower, except when he isn't. Is that right? His system has now issued a sell signal (last week?) yet he is not following it... because he has identified this drop as political and not "market or economic". Wow, I wonder how his backtests distinguished between the two different kind of drops. lol.

Pay attention wrote:

A lot has changed since 2007. Look forward, not back.

Dick Fuld wrote:

???

*NOTHING* has changed since then. These banks are as messed up as ever. Clearly laws are no better.

Obviously, nothing has changed at banks. They want less regulation, and yet continue to drop a couple billion here and there because of negligence, fraud, or worse.

BAC will not be long for this world, at least in its current form

Banks may "want" less regulation, but the reality is that they face significantly more regulation these days.

As for BAC, I think the worst is in the rear view mirror.

ok, huh? wrote:

So.... coach d is a 19wk/39wk trend follower, except when he isn't. Is that right? His system has now issued a sell signal (last week?) yet he is not following it... because he has identified this drop as political and not "market or economic". Wow, I wonder how his backtests distinguished between the two different kind of drops. lol.

Yeah, I think that's pretty weak, but I also know he follows a MACD to confirm, which is smart. Unfortunately, he sees the world through rosy Obama-filled glasses and is hardly objective from that posture, which brings his credibility into question. Technical analysis is hardly a science. It's correct 50% of the time and only in trending, not choppy, sideways markets. The question is, how does the individual manage risk? That's the real key.

Some of us have been shorting from the top. But, as of THIS moment, I think cash (or something like a hard currency) fund is the best place to be until this chop resolves itself, which I personally expect to be to the downside, but we will see.

The problem is the Fed, who I'm quite convinced will either print under the guise of another program or induce others to buy. The question is, are they in there, or do they need to see a real panic set in first? I'm not convinced that this is anything other than a classic short squeeze at this moment, even as the ES almost appears to have put in a double bottom.

If we're dumb enough to follow Japan's misguided liquidity trap or enact another useless stimulus program with massive misallocation of funds, there's going to be hell to pay at some point. Deleveraging, debt restructuring, savings, and appropriate investment needs to be allowed to happen. No more of this Solyndra bull$hit and $250,000+ to create a government job as per the non-partisan CBO.

This is an article that everyone on here should read. While I don't necessarily agree with his views on short-term inflation, I wholeheartedly agree with his sentiments on curve manipulation. This could be worse than Lehman if not handled perfectly, which I don't think it will be, and even then, only postpones the inevitable.

http://advisorperspectives.com/commentaries/millenium_091711.php

Solyndra's overrated, a mistake that occurs continually in venture capital. So, they dropped one, but they saved the car industry and turned the economy around from neg six eight to positive five four. Now the staying power was not there and the jobs picture improved significantly before weakening as governments cut jobs, but that is in part because the stimulus was too focused on tax cuts (1.03/1 in stimulus) and not focused enough on creating jobs directly. A major direct hiring of workers in the millions, as in the Depression, would have had and would now have a very major effect.

Nope, Solyndra is cronyism at its worst, just like Fannie and Freddie (who have their hands out yet again) and the big banks. You conviently forget that it was Bush who was the impetus for "saving" the car companies, even though Honda and Toyota are more "American" than American cars in totality. Obama merely threw the senior secured creditors under the bus and allied with the unions, just as he's preventing Boeing from setting up shop in South Carolina.

Ironically, the car companies are selling more trucks than cars, are not anywhere close to "normal" SAAR levels, and only surfed the tailwind of an inorganic tax credit, just as the Fed "saved" the economy temporarily with their ridiculous quantitative easing and curve manipulation. You didn't read the article, yet again. This isn't a Bush problem or an Obama problem, but it's a serious problem with grave consequences. Kicking the can will only worsen the inevitable, eventual pain.

You call economics the "sorry science," but then assert your liberalism with such confidence, which is a wee-bit hypocritical. Which is it? Gee, I wonder why the "staying power" wasn't there and won't be again when the private, small business sector is starved of oxygen and strangled with a regulatory albatross.

OTG and Sagarin, if you want to read a lighter but very entertaining take on Germany's reaction to the Euro crisis and involvement in the American bank meltdown, Michael Lewis has an article in last month's Vanity Fair, "It's the Economy Dummkopf". He makes several humorous observations about the German character and how those traits caused them to be sucked into this mess despite themselves. Good read.

So it's the one month anniversy of this thread.

And the Dow has not been lower since we were given the signal to sell.