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Fear & Greed Trader
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Independent Financial Advisor / Professional Investor- with over 25 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
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  • Market Update 10/8 10 comments
    Oct 8, 2013 6:17 PM | about stocks: CVX, TGT, XOM, C

    The market hates uncertainty, and we have a lot of it . The government shutdown garners all of the headlines, the bigger concern however is the debt ceiling circus being played out in DC.

    Markets will likely continue to trade in a volatile fashion until some sort of positive news comes out of Washington. The bias is now to the downside, but any potential budget deal could spark a rally. We're now in a very news-driven tape, be nimble here . My best guess would be a retest of the 1620- 1630 area , I have already put some cash to work as mentioned in this blog and my nibble a bit more if we do get to those levels.

    It sounds "scary" , but it sounded "scary" last year at this time when it set-up to be a good buying opportunity. We did have a spike in the volatility index today as it got over 20 for the first time since it visited this area last June when we had a pullback. Last June it spiked to 22 and quickly reversed. I will be watching to see if it will play out the same way this time.

    Keeping all things in context we are just 4% off of all time highs and another 4-6% would be in the context of a "normal" ,healthy correction. That would take us to 1560-1570 on the S & P , and at present would be my worst case scenario as we continue into the 4th quarter.Let's not worry about that now ...

    First things first, Earnings season may have a big voice in where we go from here..

    From my stock universe - Relative strength indicators are flashing oversold on these names. (Under 20 is considered oversold) We never know how long they will be oversold , but at these levels one can start to accumulate as I did on CVX,TGT & XOM.

    CVX @ 5.8

    TGT @ 15

    XOM @ 15

    C @ 17

    GS @ 13

    CSCO @ 15

    LEG @ 17

    MCD @19

    CAT @ 16

    The DJIA sits @ 15

    Good Luck !

    Disclosure: I am long CVX, TGT, XOM.

    Additional disclosure: I am long numerous stock positions - full list can be seen here on this blog.. I am short Gold via DZZ

    Stocks: CVX, TGT, XOM, C
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Comments (10)
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  • Fear & Greed Trader
    , contributor
    Comments (10756) | Send Message
    Author’s reply » While all are fixated on DC, Alcoa reported earnings last night. While they certainly are not a "market mover", the results & more importantly the commentary by the CEO were meaningful.. Specifically their positive view on the global economy..


    Shut out the noise and check out the fundamentals .....


    9 Oct 2013, 09:14 AM Reply Like
  • User 7415181
    , contributor
    Comments (1039) | Send Message


    Good Lord you're really cranking out these posts! Always helpful to have a reminder of what seems to be buying opportunities that seem to pop up this time of year for the last several years.
    9 Oct 2013, 10:37 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (10756) | Send Message
    Author’s reply » user,


    with a sloppy market i have plenty of time to think -- sometimes way too much -- LOL,
    9 Oct 2013, 11:22 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (9186) | Send Message


    What's the thought on today's news? Time to buy in for a while? Or more down before 17th (as politicians drag it out & play games), so there'll be other opportunities to put cash to work?


    Tapering is coming, but will it be a mover by then?
    10 Oct 2013, 09:49 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (10756) | Send Message
    Author’s reply » Curls,
    I think it will be more of the same , some days up ,some down,,as the volitality continues until this debt ceiling stuff is finally put to rest. As earnings season gets going it may offer a clue as to where the market will go in the 4th quarter.


    You have to pick your spots with good quality stocks , this constant game that the politicians play shouldn't affect your views, in the end this will surely pass. Meanwhile it will drive most investors crazy ..


    The stocks i mentioned recently are IMO all good choices, Take a look at CVX , selling off again on news of lower earnings.. It's a div artistocrat that is now on sale. i added last week, and if it gets down to 112- area I will pull the trigger again ..
    10 Oct 2013, 10:21 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (9186) | Send Message
    @ FG


    Thanks! I'm going to start back in with a lot of my money into indices, since I dont' have strong skills/sense of stock picking yet. So the overall movements matter -- for my timing on getting back in. While lot term it's irrelevant, short term, it'd drive me crazy to get in then watch a drop. Or miss this next rally of 5% a waiting. 5% is a lot!


    I'm & definitely will be checking out your stock picks! Obviously I can put together something like the index but add in what I like,and leave out a few things... I like those aristrocats that go on sale off a poor quarter. They do pop later at least a bit, every time...
    10 Oct 2013, 10:54 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (9186) | Send Message
    On another note... something I've been wondering... is a hedge fund in essence much different from a managed mutual fund? Seems to me they are both someone managing money that comes in, and you put your money in, or put it out.


    The rules on the managers will be a little different. Funds tend to state a purpose & focus on it. Hedge may or may be more open ended up to the manager's discretion.


    Am I missing something?
    10 Oct 2013, 10:00 AM Reply Like
  • Fear & Greed Trader
    , contributor
    Comments (10756) | Send Message
    Author’s reply » Hedge funds are different from manager that run mutual funds..


    Keeping it simple, holdings in Mutual funds are typically "long" only.


    Hedge fund managers do just what their name implies, they put on long position and hedge with options. They of course also have straight "short" positions in their holdings.. Most of these hedge funds have underperformed the market this year simply because the 'hedge" that they may have employed to limit risk , has dragged down their 'long" position performance.
    10 Oct 2013, 10:26 AM Reply Like
  • Tack
    , contributor
    Comments (16557) | Send Message
    Another big difference:


    Mutual funds generally carry fees that range from less than 1% to 3% per annum. Hedge funds often run on the "2 & 20" rule, i.e., they charge 2% of assets annually, plus take 20% of all gains achieved. Not exactly a deal, especially if the fund isn't substantially beating the market on a regular basis.
    10 Oct 2013, 10:51 AM Reply Like
  • Land of Milk and Honey
    , contributor
    Comments (9186) | Send Message
    Ahh, that explains a lot. Thanks! Well, round & round the market goes. Hope you had happy clients today with the rally!
    10 Oct 2013, 10:31 PM Reply Like
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