SPY Off 1% This Past Week But Little Sentiment To Sell

Charles

SPY actually down a bit each day this week but Thursday.

But light volume each day.

Attribute it to dog days of summer

No distribution days (decline on above average volume) since July 2. Longest such period all year. Last time we had stretch this long was about this time last year.



Here's how SPY looks longer term on Schwab performance chart against 3 and 10 month averages:



All US sectors remain above both 50 and 200 day averages except real estate and gold.

Here's summary from Seeking Alpha:

Ted

Dear Charles: Don't sell, this markets going higher ! S&P to 1900 !
Regards,
Ted
http://slant.investorplace.com/2013/08/sp-price-target/print

PRESSmUP

I firmly believe the market will be higher by year-end, and also 1 year from now. However, I also firmly believe there will be several pull-backs along the way. When folks start piling into equities is when I will start to lighten up.

A good read:

http://www.ritholtz.com/blog/2013/08/stocks-cheap-or-expensive/

Ted

Reply to @PRESSmUP: If there's a pull-back and you lighten up, at what point will you get back in ? This is a buy-and hold market with buying on dips.
Regards,
Ted

PRESSmUP

Perhaps I wasn't clear Ted as I agree with you...I would not lighten up on pull-backs, as that is when I tend to add to equity holdings during a general up-market trend. I will lighten up when the fund flows indicate folks are piling into equities. People tend to do the wrong thing at the worst possible time...and I prefer to take advantage of that.

Desota

I'm fully invested in my equity/income fund all the time. I earn dividends plus I don't believe you can't (edit) time the market.

Old_Skeet

I am at the equity party too, I am just not enthused about it as some. At these, or near these, all time high price levels my thinking is that caution is warranted. This is why I employ a systematic sell process as equities continue their advancement upward. In this way, when a pull back does come I will have already position my equity allocation within my portfolio by having kept it form ballooning and have maintained a more right sized equity allocation inline with my risk tolerance.

My systematic sell process is simply. For every 25 points the S&P 500 Index advances I reduce my equity allocation by about one percent. Here is how it has worked. The Index started the year at 1426 and when it reached a closing high of 1500 I reduced by equity allocation by about one percent leaving the residual eight tents of a percent to ride. So, as the Index has moved form 1426 to 1700 there has now been eleven sell steps at which I reduced equities by about one percent at each step leaving the residuals left to ride thus increasing the dollar amount of equities held along the way but keeping the percentage of equities held within their target range. One might say this is a systematic bull market rebalancing process.

Nope, I will not be seeking a big exit as some might be when equities begin a pull back because my portfolio has been maintained in a right size fashion so to speak.

I am linking below Jeff Saut’s weekly commentary for those that might be interested in reading it. It is titled “The One Chip Rule." Mr. Saut is the market strategist for Raymond James Investments. http://www.raymondjames.com/inv_strat.htm

Again, I am on board the equity train; but, I am harvesting some equity profit along the way as this equity train moves upward to higher and higher elevations. Hey at some point we all know it has to make a decent. We just don’t know when though. Therefore, I have chosen to harvest some profit along the way.

And, here is another perspective from Mike O'Rourke Market Strategist of Jones Trading.
http://www.cnbc.com/id/100952689?__source=yahoo|finance|headline|headline|story&par=yahoo&doc=100952689|S&P 500 headed to '1,500

Have a great weekend … and, I wish all … “Good Investing.”

Skeeter

scott

I'm not buying anything more at this point, but am not selling anything either. Reinvesting divs. I will add a bit more to current holdings, but the market would have to be a good deal lower than it is currently for me to consider doing so.

hank

S&P gained 13% in 2012 and is up 18.6% this year. Dow gained 7% in 2012 and is up 17.71% this year. Healthy gains - but not outsized or unheard of in bull markets. What seems remarkable is the steadiness of the assent. Can't recall any 1,000+ point dips on the Dow over the past 12-18 months. At current levels that would amount to only about a 7% pullback. November's election results and again Cyprus did jolt the markets a little - but 1000 points? Probably not. So, during this period a fully invested approach likely worked better than trying to hedge.

I think there's merit in all the various approaches presented in recent days. But, I don't think anyone - not Skeeter, Ted, Catch, MJG, or anyone else - is going to throw away a time-worn and finely tuned plan (which meets their own individual needs) based solely on a couple years' market performance.

hank

Reply to @PRESSmUP: Link: "Record inflow into U.S. equity funds in July - Trim Tabs"
http://www.reuters.com/article/2013/08/04/trimtabs-equity-idUSL1N0G50DF20130804

ron

I have been using Schwab-SCHB for my total market fund. Also has lowest ER and no commission to buy/sell at Schwab. I think you have to have a Schwab account for no com.
I also use SCHD and SCHA.