S&P Sell Signal

Hey, the Dow just dropped below the Aug 21 value.

Point for you.

You're in a better spot right now than the buy-and-holders.

Of course anyone that sold on almost any other day is in an even better spot.

Let's bump this thread at 10,000 or 12,000, whichever comes first.

12,000

(The Dow was below 10,800 at that last post, maybe 10,500)

Now, maybe a good sell signal - when the market is high

But I'm not saying that

The day's rally pushed the S&P 500 into positive territory for the year for the first time since Aug. 4. The broad index is now on track for its best monthly performance since January 1987.

The gains also pushed the Dow above the 12,000 mark for the first time since Aug. 1. The blue chip index is headed for its best month since August 1982.

So, for anyone that BOUGHT when the SELL signal was given - good job!

Opposite George wrote:

http://money.cnn.com/2011/10/27/markets/markets_newyork/index.htm?iid=Lead&hpt=hp_t2

The day's rally pushed the S&P 500 into positive territory for the year for the first time since Aug. 4. The broad index is now on track for its best monthly performance since January 1987.

The gains also pushed the Dow above the 12,000 mark for the first time since Aug. 1. The blue chip index is headed for its best month since August 1982.

So, for anyone that BOUGHT when the SELL signal was given - good job!

Actually, with perfect timing (not likely) you would have bought on 10/3 with a SP500 closing price of 1099.

Events have shown that I was correct to be suspicious of the "sell signal" due to it being triggered by the right-wing spoiled children throwing a debt temper tantrum, and not economic events. Frankly, I can't think of a single instance where comments of Sagarin and similar right-wingers above turned out to be correct (maybe in 2008-2009 when I was also short).

I did what I said earlier in this thread by loading up on gold at fire sale prices at 1600-1620 (multiple buys) and am now long 5 Comex contracts. Also closed my short position from 1173 at 1238 Monday morning after the McClellan Summation Index confirmed the uptrend:

This now appears to be a big correction (see May 2010) as I suspected, but a retest cannot be ruled out. You DO make more money trend following IN THE LONG RUN, but not every signal is correct.

coach d wrote:

This now appears to be a big correction (see May 2010) as I suspected, but a retest cannot be ruled out. You DO make more money trend following IN THE LONG RUN, but not every signal is correct.

A broken clock is right twice a day, too...

Magic 8 Ball wrote:

coach d wrote:

This now appears to be a big correction (see May 2010) as I suspected, but a retest cannot be ruled out. You DO make more money trend following IN THE LONG RUN, but not every signal is correct.

A broken clock is right twice a day, too...

yeah, but sagarin and blowing rock master are not even right that many times a year. And yet they consider themselves "experts" !

Wait until the second rating institution puts a downgrade on the u.s. currency. Wait until there is another debate on the debt ceiling. Wait until china calls debt from the u.s.

Yes folks China is clearly the enemy to the u.s prosperity with there artificially deflated currency. People we need to wake up and start to play hardball with China. The regime there is a huge threat!!

Worth noting that the 19wk/39wk system for the S&P that coach d claimed he followed and was the cat's meow (see page 1) is still bearish.

If you guys really knew which direction the market was moving at any given point in time, you wouldn't be lounging around a letsrun forum about it.

Buy Fear, Sell Greed.

coach d wrote:

Events have shown that I was correct to be suspicious of the "sell signal" due to it being triggered by the right-wing spoiled children throwing a debt temper tantrum, and not economic events.

Who are you kidding? Some of us were making big money (said I was short, just as I got short silver during its big vomit) while you got headfaked by your "timing" signal during that downdraft because the domestic economic data was clearly worsening (regional surveys and national PMIs weakening, with employment indexes suggesting contraction, the Fed acknowledged that we were on the precipice of faltering, the Baltic was rolling down, as was copper, Europe was splintering - and has merely bought more time last night- , and several leading figures confirmed my thesis that we were heading toward a recession). I said the one major caveat was that the Fed still had its bag of shenanigans, with continued POMOs from QE2 and "Operation Twist," and they had plenty of ammo to push the market higher.

Some of the economic data is looking better, but the 4th quarter and/or the first and second quarters of next year could be surprisingly bleak. The credit markets aren't comporting with this rally, though that could change, and business CEO and CFO confidence is plummeting. S&P's downgrade was a formality, not some "trigger." Do you really think US "sovereign debt" deserves the rating it has now? You either make a call based on your system or you don't. You wussed out and hedged your call. That's not a system. This is hot, algorithm-driven money chasing stocks, and equities no longer trade on fundamentals as they used to, though the credit market is far more reliable. In any event, my game is different than yours. I day trade or swing trade, but rarely take anything out overnight. I don't really make market calls anyway. just ruminations about the economic climate and what I think generally. I made over $100,000 in September, and whether you believe that or not, I can live with it.

You're still not even following your own signal, jack. Some thesis.

Sagarin wrote:

[quote]coach d wrote:

The credit markets aren't comporting with this rally, though that could change.

Sagarin - what do you mean when you say this - how do you judge the confidence of the credit markets? What are you looking at?

I'm referring to a lack of easing in credit spreads during rallies when we were stuck in the congestion phase as measured by looking at various Moody's Corporate Bond Indices BAA/Moody's Corporate Bond Indices AAA, as well as Moody's Corporate Bond BAA/US Government Generic 10-yr yield, and several proxies of LIBOR rates, which have continued to rise, even in the face of a sharply rising stock market, though conditions may start easing. My general fundamental sense was skepticism toward the rally and continued skepticism until we see credit conditions improve, though we are starting to see fundamental improvement elsewhere in fits and starts.

I made my double dip call before the ECRI or Roubini or Hussman or the Fed's own acknowledgement of "faltering." These guys aren't dummies, but it doesn't mean they'll be correct. We may skirt a recession. The irony is, I've made the point that I can give as much credit to extending the tax cuts for enabling even meager growth as one can give to the "stimulus," wherein both may simply be spurious correlations. Regardless of what happens from here, I think the Fed is playing a very dangerous game. Even Coach d has prognosticated Dow 15,000 by 2012, then Dow 6,000. What's the fundamental basis behind that call? I've acknowledged the Fed is very capable of coercing money into risk and equities and further debasing the dollar. I remain skeptical, but I'm not fighting the tape here.

If we see improving credit conditions, it will reinforce the bullish thesis. The market is clearly overbought here, but sentiment was very bearish and fund managers underinvested, so a fourth quarter chase wouldn't surprise me until we get overbullish. But I remain skeptical until I see credit conditions improve. We may simply have just pushed a major decline further out.

Prince of prussia wrote:

Yes folks China is clearly the enemy to the u.s prosperity with there artificially deflated currency. People we need to wake up and start to play hardball with China. The regime there is a huge threat!!

China is sinking fast. Have you read a newspaper in recent weeks?

I hear you. I generally have been looking at ETFs and how they perform to get a sense of the credit markets. Right now, both high yield and investment grade have come back mighty strong, and the spread between high yield and investment grade has shrunk.

So from where I am, credit markets are showing increased comfort, although we may be talking about different things.

me two wrote:

Opposite George wrote:

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.

Worth noting. Just make sure you check back again in 3 months, and 6 months, and possibly 12 months before you form a conclusion (as if you haven't obviously formed one).

More than 3 months later and it was still a terrible time to sell.

(The Dow had dropped to 11,200 by Black Friday and rallied to 11,500 today)

We'll get bad news from Europe again and it will go down again. Then a good report will come out and send it up. Rinse and repeat.

So BRM, had did this sell signal thingie work out for you?

Opposite George wrote:

me two wrote:

Worth noting. Just make sure you check back again in 3 months, and 6 months, and possibly 12 months before you form a conclusion (as if you haven't obviously formed one).

More than 3 months later and it was still a terrible time to sell.

(The Dow had dropped to 11,200 by Black Friday and rallied to 11,500 today)

We'll get bad news from Europe again and it will go down again. Then a good report will come out and send it up. Rinse and repeat.

Just saw your 3-month post now. I'm still curious to see how the OP's call turns out at the 6 & 12-month marks, so please check back in then.

He said he would sell Aug 22. SPY closed Aug 22nd at $112.73, and is $126.26 today. So by selling, he's missed a 12.0% gain. (It also paid a $0.625 dividend in Sept, but I think it had probably already gone ex-dividend, so he wouldn't have missed out on that). Interest earned on cash would be negligible.

There were only a couple days in early Oct where SPY went lower than his sell point. $109.93 for a closing low. Let's assume since this is a longer-term signal that he didn't get back in there and is still out.

See you in 2.5 months.

So at year end, the S&P has gone from 1,123 to 1,257 and the Dow has gone from 10,800 to 12,200 since this sell signal more than 4 months ago.

12%-13% gain to date, around 35% gain annualized.

Also note the markets went up the week of the signal and there was only one small time period in the last 4+ months that the markets were lower than at the signal.

And of course the markets were much higher a month before the sell signal and high is when you want to sell.

This mid year sell signal came at a time where the markets wound up near their lowest points, before and after the call.

I nominate this thread for the Letsrun worst financial prediction/advise thread of the year for 2011.