Good Evening,
Another bounce on low volume. You could have copied the same message for a newsletter for the past several years. It favors the buy and hold crowd and anyone that knows me knows how much I hate that strategy even when it works. It takes no talent and little imagination. It makes everyone look like a genius. That is, until it takes a real dive. The key to this market is simple. You must not become complacent even though the action encourages it. You must remain vigilant, ready to take action when it is needed and believe me that day will come. Secondly, you must not get involved in the top calling game. Yes I am guilty of that myself this year, I just didn’t see how it could go on, but it did. It is best to remain with the trend as long as it lasts. The profits will almost always outweigh the loses incurred when the market really does turn down. It’s frustrating for experienced traders, but we must recognize that these conditions exist and go with them while they last. Rev Shark talked about it in his afternoon comments. I have included them here if for no other reason than to let you know that we are not the only ones to struggle with this market.
James DePorre
“In recent years one of the most annoying things about this market is that the pullbacks and corrections are so fast and so shallow that there isn’t much of a chance to trade them. We have a brief on day dip, like yesterday, that looks rather ugly but then we immediately recover the next day as if nothing at all had occurred. There isn’t enough downside momentum to create good entry points. More often than not we bounce back on declining volume and make good entries even harder.The buy-and-hold bulls love this sort of market behavior as they never have to suffer any anxiety for very long. Many of them laugh at the poor active traders who spin their wheels trying to catch extremely short lived volatility. There are markets that favor buy-and-hold and markets that favor trading and there is little question which sort of market this is.End of the quarter window dressing is probably helping the bullish cause but what continues to drive the upside bias more than anything is fear of being left behind. The nervous bulls who sold yesterday are trying to put that money back to work today which is why we tend to have V-shaped action.The action today is very typical of what has happened numerous times in recent years. The bears think they are finally going to see some downside as an extended market takes a hit but the correction is over in a blink and suddenly they are forced to cover shorts as underinvested bulls struggle to put money to work. Fund managers can’t produce relative performance so they chase things in hopes of not lagging too much.As I said yesterday it was premature to be overly bearish but it is still is irksome that we don’t have a higher level of volatility to trade. The action was positive today but the intraday range was extremely tight and there was little in the way of new opportunity.Momentum always lasts longer than seems reasonable and action like today proves that point.”
Rebound! Stocks head back up
The day’s bounce left us with the following signals: C-Buy, S-Buy, I-Neutral, F-Neutral. We are currently invested at 25/C, 75/S. Our allocation is now -3.62% on the year not including today’s results. Here are the latest posted results:
| 06/24/14 | |||||
| Fund | G Fund | F Fund | C Fund | S Fund | I Fund |
| Price | 14.4487 | 16.3597 | 25.4476 | 35.2185 | 26.8985 |
| $ Change | 0.0009 | 0.0243 | -0.1620 | -0.3289 | -0.0492 |
| % Change day | +0.01% | +0.15% | -0.63% | -0.93% | -0.18% |
| % Change week | +0.02% | +0.17% | -0.64% | -1.03% | -0.36% |
| % Change month | +0.15% | -0.28% | +1.51% | +2.86% | +1.14% |
| % Change year | +1.13% | +3.93% | +6.59% | +4.60% | +5.22% |
| L INC | L 2020 | L 2030 | L 2040 | L 2050 | |
| Price | 17.2034 | 22.6295 | 24.5154 | 26.0638 | 14.818 |
| $ Change | -0.0171 | -0.0620 | -0.0885 | -0.1112 | -0.0713 |
| % Change day | -0.10% | -0.27% | -0.36% | -0.42% | -0.48% |
| % Change week | -0.10% | -0.30% | -0.40% | -0.48% | -0.55% |
| % Change month | +0.42% | +0.89% | +1.13% | +1.31% | +1.46% |
| % Change year | +2.30% | +3.83% | +4.50% | +4.95% | +5.37% |
Tthere’s simply no new way to describe this market. It continues to melt up with occasional pullbacks that don’t amount to anything and then rebounds in a V-Shaped manner on low volume. We are invested in equities and will remain there until we get the strongest possible sell signal. That’s all for tonight. Have a nice evening.
