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SPY, Trading Sideways, Is 1% Off Record High While Market Sentiment Continues Recovery

Kirk Lindstrom profile picture
Kirk Lindstrom


  • In late August through early September 2015, my sentiment charts were screaming BUY.
  • I took profits as the markets rallied through the end of 2015 and sentiment rose.
  • Sentiment indicators in February again correctly indicated a tradable low and I added to positions.
  • My portfolios are at record highs and I continue to take profits as SPY soars and sentiment turns more bullish.
  • I’m also looking for another buying opportunity after sentiment pulls back from recent bullishness.

In my July 7th, 2016 sentiment article I wrote, "It appears recent 4% & 6% declines may have been enough for another rally to a new high." That decline for NYSEARCA:SPY was enough for sentiment to "reset" for an advance to record highs on August 11, 2016 for three of the four major US markets for the first time since December 31, 1999. Two trading days later, on August 15, 2016, the Dow, S&P500 and Nasdaq again closed at record highs.

Currently, SPY adjusted for dividends is up 8.18% YTD and is only 0.8% below its record high intraday price.

SPY Dividend History here

The time to buy stocks is when there is "blood in the streets" while others are fearful and selling. In late August through early September of 2015, my investor sentiment charts were screaming BUY and I added to many positions during this time. I took profits as the market rose into the end of the year.

The markets fell again in early 2016 with SPY and the S&P500 testing their 2015 lows while the Russell 2000 and Nasdaq went even lower. I added again to positions. Then as the markets and my stocks recovered, I took profits.

I take profits after my stocks go up after buying opportunities. I also collect dividends so I have cash to put back into the markets when my stocks go down again and sentiment charts suggest it is time to buy again.

TABLE 1: Current Market Levels Compared with Benchmarks

On 2/11/16, on an intraday basis the S&P500 was down 14.4% from its record high. Today it is up 19.0% from that low, thus the period around 2/11/16 was a great time to buy!

Chart 1: S&P500 Price & Yield ($SPX & !YLDSPX) with SPY Over Time

On Feb. 11, 2016 in"

This article was written by

Kirk Lindstrom profile picture
Started my newsletter Explore Portfolio with $100,000 on 09/30/98.  By 12/31/20 that portfolio, with 60% stocks reached $1,270,794, a 12.1% APR.  Better performance with far less risk than 100% in S&P500 which only did 8.0% APR.  ----Awarded "Timer Digest 2017 Timer of the Year" and "Timer Digest 2013 Bond Timer of the Year" (both shared awards). ----More at http://kirklindstrom.com/Newsletter.html  ----------  2017 Market Timer of the Year  ------------------------------------------------------Starting as a summer intern in 1978, Kirk worked for 20 years as a scientist and engineer at Hewlett Packard's research and development department (R&D) designing solid state devices and components for optical communication. While he was at HP, Kirk invested ten to twenty percent per year of his salary. He made some mistakes early on (starting with paying high fees for "expert" advice that under performed) but soon he learned to invest his own money well enough to afford a life of "semi-retirement" to work for himself. In a way, since leaving HP in 1998, Kirk became his own "angel investor" using his his own money and investing success to finance his lifestyle in Los Altos, California to invest in a new career on the internet helping others do the same.  More at http://kirklindstrom.com/About.html

Analyst’s Disclosure: I am/we are long SPY. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (5)

neal weintraub profile picture
I LIKE New York in June.
But I do not like a single naked position.
Check and see if you can short some of these indices.
There will be an outside event that will shake things up.
And your greed will melt to fear.
But I do not brag. So when it happens your indicator will tell you after the fact.
I see you stopped showing the fear and greed index.
Kirk Lindstrom profile picture
I tried to make the article shorter and easier to write and follow. One plan was to break it into two articles and cover fear and greed in the Mon or Tue sentiment update then have CPC, AAII and II in the Thur/Fri article but time constraints have limited me.

I'm not sure if it is temporary, but the fear and greed page is dead for me this AM: http://tinyurl.com/o7r...
Kirk Lindstrom profile picture
I get a chuckle that some think fear rises with price. It makes a nice catch phrase but clearly isn't true. The charts in my article clearly show bears turn bullish near market tops which is what brings their money into the market and helps form a top.

Major market tops usually come when ski resorts, golf clubs and bars at local restaurants have CNBC on rather than sports.... and "everyone" knows what stock will make you rich. That is because there really isn't much more $ to go into the market, especially since companies stop buying back shares with cash and use stock rather than cash to buy other companies.
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