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Fear & Greed Trader
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INDEPENDENT Financial Advisor / Professional Investor- with over 30 years of navigating the Stock market's "fear and greed" cycles that challenge the average investor. Investment strategies that combine Theory, Practice and Experience to produce Portfolios focused on achieving positive... More
My company:
RTR LLC
My blog:
Stocks4Income.com
  • Market Update 9/22 - So The Fed Didn't Taper - Don't Fret 5 comments
    Sep 22, 2013 4:00 PM | about stocks: SPY, DIA, QQQ

    I commented during this past week that although we had a knee jerk reaction from the markets with both the Dow 30 & the Dow transports vaulting to new highs.. I remained wary because the markets were signaling a very overbought condition. That was demonstrated with a chart of the S & P showing what has taken place after the previous 2 Dow Theory Buy signals.

    http://seekingalpha.com/instablog/706857-fear-greedtrader/2236882-market-update-another-dow-theory-buy-signal

    I mentioned that I would need to see a follow thru before I was convinced we would resume with another leg higher. Both Thursdays action and the negative results on Friday seemed to have confirmed my doubts.

    Add the overbought condition that prevails, the DC crowd (as i mentioned least week) entering the room and we could very well see the weakness that everyone expected at the start of Sept.. take place in the next few weeks.

    No need to elaborate on the fed's decision but to simply say my initial thought of a no taper in Sept. played out. I like everyone else started to get caught up in the "hype".. and wavered at the end thinking they would in fact cut back purchases.

    However the bottom line is that the Fed did what the Fed said the Fed would do. Unemployment is above the stated threshold and inflation is below - thus, no taper. Why is this so mystifying to everyone? Are we that untrusting of people's word that we can't take a single thing at face value anymore? The fed simply stayed to its stated plan, the experts were wrong again.

    The reactions portray the general disgust with Fed policy since the 2009 bottom that has left many on the sidelines and the bears disgruntled. That remains "their" problem...

    I was going to write commentary as to what exactly this means for the markets, but stumbled upon a great article here on SA by Jeff Miller .

    http://seekingalpha.com/article/1702152-after-the-fed-decision-three-things-investors-need-to-know

    The article captures everything that I had on my mind after the announcement. A must read..

    Plenty of talk now about the economy, Its weaker than we thought, its this, it's that (more noise). So I decided to elaborate on something that caught my attention. Something that is often overlooked-- The Leading Economic Indicators Index. No one pays much attention anymore but they do show a nice picture . This indicator has shown to be negative in times of recession and has turned up during every growth cycle , so they haven't done a bad job in forecasting where we are regarding the state of the economy . As of August, they were up over 4% from a year ago, and that is consistent with a growing economy. All in all, it looks like economic conditions are gradually improving. Businesses need to regain more confidence so that they are more willing to invest in new plant and equipment and hire more workers, and a good way to help businesses regain confidence would be for regulatory and tax burdens to be lightened. If only Congress and the President would get out of the way .

    (click to enlarge)

    The chart above shows the level of the index, and it shows how similar the past 13 years have been to the period from 1965 to 1982, during which time the stock market woefully underperformed. After that long base building period the market broke out and if you overlay the S & P over this chart that green line depicted above from 1982 to 2000 saw the S & P go from 140 to 1500..

    Fast forward to the 2000 - 2013 timeframe. Another lackluster period for the market , another base building period , and now in '13 a breakout in stocks to new all time highs from that base. As the leading indicators continue to show improvement a similar trajectory may take place like it did from '82 to 2000.. Now Im not suggesting that we will see the same type of percentage gains from that period, but I am of the belief that this represents another piece of evidence to support my secular bull market theory.

    Getting back to the more immediate market situation , this coming Oct - Nov timeframe may just play out like it did last year. If Fridays sparing between the incompetent Congress and the president are any indication of what is to come, it may rattle the markets. I have already heard rhetoric like 'the Gov't will be shut down and put us in recession" to another threat of a debt downgrade --

    This may create some hesitancy among would-be buyers or some increased hedging activity in the immediate days ahead, but any pullbacks will be opportunities, given that from what I have seen most major players (Underperforming fund managers, Pensions funds selling bonds) still appear to be overall underweight equities and looking for entry points. But that doesn't mean we need to chase any of the overbought stocks that are on our radar screens..

    Bottom Line - weakness over the "noise" will be a buying opportunity.

    So maybe we will in fact see better entry points for favorites that I have on my Buy List.

    Tickers to keep your eye on if you don't already own --

    Stocks I already own and may add to those positions:

    JPM,CVX,QCOM,AAPL,AFL

    A few names I would like to add to the holdings :

    TGT, GS, C, SNDK,FFIV, AZN, JOY,LLL

    My Entire portfolio can be seen here ,it was updated today :

    http://seekingalpha.com/instablog/706857-fear-greedtrader/2054052-core-holdings-portfolio

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Comments (5)
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  • User 7415181
    , contributor
    Comments (722) | Send Message
     
    Hope you're right. I continue to be committed to the long-term-swing trading approach with index funds that I started dabbling in last spring. I currently like these charts (if they will show up for you properly meaning with a 300 day sma):

     

    http://bit.ly/18m81Gq
    http://bit.ly/17X79F4

     

    I suppose I'm kind of weird that I pick individual cefs and preferreds for income and would rather go for index funds for stocks. Anywho, I enjoy your blogs so far.
    23 Sep 2013, 11:46 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5150) | Send Message
     
    Author’s reply » UPDATE :

     

    Watching TGT , broke some minor support here today @ 63, no follow thru in the next few days could bring the stock to around 60 ..

     

    Aggressive Investors & those that may have little exposure or just entering the market can nibble here in the 63 range , (2.7% yield) I am waiting to see if i can get a real bargain and holding out for the 60 -61 level.. Please keep in mind I choose to do that since i still have a lot of chips on the table...

     

    Choose whatever path based on you individual situation..
    25 Sep 2013, 05:39 PM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5150) | Send Message
     
    Author’s reply » S & P down 10 Dow down 104 as I write this-- TGT is up on the day ,, I believe the stock has indeed put in the bottom and I am looking for this level to hold.. I added TGT @ 63.80.

     

    Also note the financials --C & JPM are up on a down tape ,, I may be adding here at the close..
    27 Sep 2013, 10:10 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (5150) | Send Message
     
    Author’s reply » Added JPM @ 52.24 , Many negative headlines recently but Stock has bounced off of 200 day MA yesterday and is up on a bad market day ..
    I opened 1/2 half of my position, leaving room to add if we get more market weakness.
    27 Sep 2013, 03:49 PM Reply Like
  • maykiljil
    , contributor
    Comments (340) | Send Message
     
    I read it all. I liked it. Thank you. BR.
    28 Sep 2013, 01:43 AM Reply Like
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