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Old_Skeet's Market Barometer ... Spring & Summer Reporting ... and, My Positioning
All my needs are met by the following 1) usually invested at 99+% mostly bond OEFs. In the last 10 years I was only 4-5 weeks at 99+% cash. Another 6-7 weeks at 30-40% cash. 2) Trading riskier assets several times annually for hours to days and back to bond funds 3) Be flexible at all times. That could be any trade, be in cash, whatever I need to meet my goals. 4) Be in only 2-4 funds because it's easy to follow and trade. All my funds must do well at all times otherwise will be replaced. 5) I compare the above to buy and hold of several portfolios and I come ahead. 6) I never believed in income as my first criteria, I always look for risk/reward which is selecting the best performing funds with the best SD, Max Draw, Sortino, Sharpe, more. 7) I never believed in wide diversification. In the last several years I mainly invest in US LC no SC/international...or..I mainly used HY Munis + MBS bonds and so on.
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In the last 3 days, the VIX started to go up from around 31 to 37. If it goes over 40 it's a warning sign. Q2 started with -2.6% loss, we will find out soon if the next leg down started. Some of the good news is behind us. Huge fiscal and monetary support. The coronavirus cases are going down. Earnings are not as bad because the first 2 months of Q1 were normal.
But, Q2 started with 30 million unemployed, a bad economy, and bad earnings. How long can the stock market disregard it?
Thank you for your question(s). Through April 30, 2020 my year-to-date total return was -7.6%. Funds that I have put new money into over the past twelve months are many. They follow in no certain order. They are CTFAX ... DIFAX ... DWGAX ... EADIX ... FBLAX ... INUTX ... ISFAX ... LBNDX ... IDIVX ... PONAX ... KAUAX ... AZNAX ... LCEAX ... BLADX ... JGIAX ... FLAAX ... FRINX ... FKASX ... PCOXX ... TTOXX ... AMAXX ... plus my CD Ladder ... and, I may have missed a couple. Yes, ABALX, AMCPX & SMCWX.
Generally, mutual fund distributions, at the option of the shareholder, can be reinvested within the same family of funds, of the fund making the distribution, at nav or taken in cash. I consider mutual fund distributions as new money as these distributions are taxable if generated inside a taxable investment account.
Hi guys. With Friday's stock market decline the S&P 500 pullbacked 81 points, from 2912 to 2831, resulting in a 2.8% loss. With this, there was a numerical reading change, in the barometer's metrics, from 136 to 138. However, this still leaves the Index overbought on the barometer's scale. When the barometer moves off of ... Overbought ... I'll make another post.
A review: There are three main data feeds used in the barometer. They are an earnings feed, a breadth feed and a technical score feed. In addition, there are a few other data influnces that are often times used as well to produce (or confirm) a reading.
virus data may not be that deadly after all the precautions measures implemented. Some predict maybe 0.45-0.9% death rate now instead of 4-10% initially, (1-3 millions death feb20 if antibodies tests statistics are somewhat predictative). Hopefully the 2nd rebounds are limited, many studies may found new virus cure/drugs/protocols to limitloss of valuable lives, and may allow surging V shape recovery. I have been more optimistic and have been buying [especially weigh more toward enery oil.] May take least one two months/quarters for oil to stabilize and hopefully recover once more states/cities/counties countries open up more
But you never know, may pundits predicting may take anther 20_40%loss these coming months/quater and maybe massive depressions..
Hi guys: Today, I received an earnings update for the S&P 500 Index and made changes in the earnings data used in the barometer. In addition, changes have taken place in the two other primary feeds from market movement. The barometer now scores the Index as ... extremely overbought ... with a reading of 130 with todays market close and with the Index having a value of 2843.
@Derf. S&P revised their TTM earnings projections for the S&P 500 Index moving form the mid 130's to the mid 110's. Since, the barometer is comprised of both fundamental and technical feeds the earnings revision changed the readings within the barometer's metrics. Remember, the Fed's have recently injected large amounts of money into the financial system. With this, I'm sure some of it has found its way into the stock market as it looks for a home. Perhaps, not directly ... but, indirectly. I'm thinking that this is a Fed induced rally which just might wane. I'm still with my thoughts that stocks will go soft through the summer months and rally in the fall as the earnings outlook improves. For now, based upon the metrics of the barometer it is now producing an extermely overbought reading of 130.
At the end of March the barometer produced a reading of 180 indicating that the Index was extremely oversold. Fiar value resides at the 150 mark. Within about a four week period the Index has gained about 27% and has gone from exptemely oversold to extremely overbought during this range of price movement on the barometer's scale.
With this movement ... Old_Skeet is now more of a seller than he is a buyer since I bought equities in the downdraft. And, since we are about midpoint 2810 between the 52 week high of 3386 and low of 2237 ... I'm thinking that the back 50% is going to come much more slowly than the front 50% came. I'm staying with my rebalance stratey and within the confines of my asset allocation model. And, in doing this ... this conforms to a buy low sell high strategy.
Hi guys ... The S&P 500 Index keeps climbing and as of today's close of 2930 puts it up about 31% from its 52 week low and down 13.5% from its 52 week high. For the barometer, it keeps dropping and scores the Index as extremely overbought based upon its metrics. Can the Index keep going higher while the barometer keeps falling? Remember, this is a Fed induced rally with large amounts of money having been injected into the financial system. With this, I'm now thinking that the market can rally on. And, when the barometer starts rising again ...Well, this may be a signal for more volatility ahead. Much like the restaurants, bars & grills in the Carolinas make a last call shout out about a half an hour before closing time.
Last call = more volatility coming. With this I changed the wording. And, last call is a term used by many restruants and bars in the Carolinas for patrons to order their final drinks, ususally about a half hour, before closing. I'm also thinking the market has gotten ahead of itself and the barometer will make (a sort of) last call when its reading reverses and starts upward.
Currently, based upon the metrics of Old_Skeet's market barometer it scores the S&P 500 Index as extremely overbought with a reading of 120. With this, I'm not putting any new money to work on the equity side of my portfolio. I'm thinking that momentum will still carry the market higher as there are currently 95% of the stocks in the 500 Index above their 50 day moving average while there are only about 45% above the 200. With this, I'm thinking there is more upside to come.
I did open a position in BCSAX this week which is a commodity strategy fund.
Currently, based upon the metrics of Old_Skeet's market barometer it scores the S&P 500 Index as extremely overbought with a reading of 120. With this, I'm not putting any new money to work on the equity side of my portfolio. I'm thinking that momentum will still carry the market higher as there are currently 95% of the stocks in the 500 Index above their 50 day moving average while there are only about 45% above the 200. With this, I'm thinking there is more upside to come.
I did open a position in BCSAX this week which is a commodity strategy fund.
Enjoy your summer.
Old_Skeet
Old Skeet, BCASX is a loaded fund. Did you buy it loaded?
It was a nav buy for me. There are other share classes available, plus the A shares can be purchased with no sales load on some mutual fund platforms. I believe you can buy it commission free and without a transaction fee at Fidelaity. I'm not sure about Charles Schwab.
It was a nav buy for me. There are other share classes available, plus the A shares can be purchased with no sales load on some mutual fund platforms. I believe you can buy it commission free and without a transaction fee at Fidelaity. I'm not sure about Charles Schwab.
Thanks @Old_Skeet. Based on sectors analysis on the 50 day just about every sector is overbought. Im most interested right now on if the rally in financials and cyclicals continues. I bought JPM and IYG about 2 weeks ago. JPM is up about 12%
Hi guys: With the stock market activity that we had this week I thought I'd post an update with this weeks barometer reading. For the month I have the S&P 500 Index about flat, thus far, with a barometer reading of 131 as we opened the month and currently with a reading of 132 as I write which indicates that the Index is extremely overbought at this time.
Please note that the barometer is not a long term forward looking model that another poster (Junkster) referenced it to, the Zweig Thrust Indicator. Perhaps, Junskter did not have a good understanding of how the barometer works. Interesting, though, this post (along with some of his other post) have now been removed from the discussion area prior to me making this edit.
I use the barometer to assist me in adjusting my equity allocation when felt approperiate. When the barometer reflects that the Index is oversold I increase my equity allocation and when the barometer indicates that the Index is overbought I generally reduce my equity allocation. Pretty simple ... but, effective as this method tends to having me buying equity ballast at low prices and then selling it off at a higher price.
When there is a meaningful barometer reading change I'll update the thread.
Have a good weekend ... and, I wish all "Good Investing.
Old_Skeet
Additional comment. I'm now back to building cash since my rebalance process is mostly complete. With this, I have reduced my equity allocation from 49% to 45% as equities have had a strong upward run of late and were trimmed. This rebalance now positions me overweight in both my income and equity areas by 5% each with about 10% in cash. From my base allocation of 20/40/40 I am now 10/45/45 as I can overweight each area (the income side and the equity side) of my portfolio by up to 5%. These overweights are due mostly to low cash yields. My overweight on the equity side is in good dividend paying equity mutual funds that produce qualified dividends and on the income side in multi sector and hybrid income funds which produce dividends as well. I'm thinking that by the end of the year, if valuations remain relative to what they are now, my cash allocation will build and bubble in the 15% range coming from income generation from inside my portfolio. At yearend, I may elect to do another rebalance as I usually rebalance by the calendar two times per year and other times if felt warranted.
With stocks going soft this past week there has been a reading change in the barometer to a reading of 135 which reflects that the S&P 500 Index has moved from extremely overbought to overbought.
As for my positioning I am currently 10% cash, 45% income and 45% equity. I have reduced cash from my normal 20% range to 10% range because of it's low yield and raised both by income and equity area allocations from 40% to 45% each. Within equities I am overweight in good equity dividend paying funds that produce qualified dividends and on the income side I split the overweight between multi sector income and hybrid income type funds. With this, I'm now back to a cash build mode where all income generated within the portfolio will be used to restore my cash allocation. I'm estimating that by year end, should asset valuations remain close to what they are presently, my cash area will bubble somewhere around the 15% range.
Remember stocks usually go soft during the summer months and with this year being a Presidential election year I'm looking for stock market volatility to continue. Hopefully, a business friendly President will be elected which will be good for both the economy and the stock market. I remember after the last Presidential election there was a big jump in the stock market as a business friendly President was elected.
When there is a meaningful change in the barometer reading I will make post of it.
As for me, I'm still deploying cash opportunitstically for the long haul across my accounts to buy stuff I want on 'sale' ... in terms of investment holdings, I'm still >90% in equities, most of which are quality dividend payers set to DRIP themselves for a looooooong time.
Comments
1) usually invested at 99+% mostly bond OEFs. In the last 10 years I was only 4-5 weeks at 99+% cash. Another 6-7 weeks at 30-40% cash.
2) Trading riskier assets several times annually for hours to days and back to bond funds
3) Be flexible at all times. That could be any trade, be in cash, whatever I need to meet my goals.
4) Be in only 2-4 funds because it's easy to follow and trade. All my funds must do well at all times otherwise will be replaced.
5) I compare the above to buy and hold of several portfolios and I come ahead.
6) I never believed in income as my first criteria, I always look for risk/reward which is selecting the best performing funds with the best SD, Max Draw, Sortino, Sharpe, more.
7) I never believed in wide diversification. In the last several years I mainly invest in US LC no SC/international...or..I mainly used HY Munis + MBS bonds and so on.
==================
In the last 3 days, the VIX started to go up from around 31 to 37. If it goes over 40 it's a warning sign. Q2 started with -2.6% loss, we will find out soon if the next leg down started. Some of the good news is behind us. Huge fiscal and monetary support. The coronavirus cases are going down. Earnings are not as bad because the first 2 months of Q1 were normal.
But, Q2 started with 30 million unemployed, a bad economy, and bad earnings. How long can the stock market disregard it?
Thank you for your question(s). Through April 30, 2020 my year-to-date total return was -7.6%. Funds that I have put new money into over the past twelve months are many. They follow in no certain order. They are CTFAX ... DIFAX ... DWGAX ... EADIX ... FBLAX ... INUTX ... ISFAX ... LBNDX ... IDIVX ... PONAX ... KAUAX ... AZNAX ... LCEAX ... BLADX ... JGIAX ... FLAAX ... FRINX ... FKASX ... PCOXX ... TTOXX ... AMAXX ... plus my CD Ladder ... and, I may have missed a couple. Yes, ABALX, AMCPX & SMCWX.
Generally, mutual fund distributions, at the option of the shareholder, can be reinvested within the same family of funds, of the fund making the distribution, at nav or taken in cash. I consider mutual fund distributions as new money as these distributions are taxable if generated inside a taxable investment account.
A review: There are three main data feeds used in the barometer. They are an earnings feed, a breadth feed and a technical score feed. In addition, there are a few other data influnces that are often times used as well to produce (or confirm) a reading.
I have been more optimistic and have been buying [especially weigh more toward enery oil.] May take least one two months/quarters for oil to stabilize and hopefully recover once more states/cities/counties countries open up more
But you never know, may pundits predicting may take anther 20_40%loss these coming months/quater and maybe massive depressions..
Derf
Derf
At the end of March the barometer produced a reading of 180 indicating that the Index was extremely oversold. Fiar value resides at the 150 mark. Within about a four week period the Index has gained about 27% and has gone from exptemely oversold to extremely overbought during this range of price movement on the barometer's scale.
With this movement ... Old_Skeet is now more of a seller than he is a buyer since I bought equities in the downdraft. And, since we are about midpoint 2810 between the 52 week high of 3386 and low of 2237 ... I'm thinking that the back 50% is going to come much more slowly than the front 50% came. I'm staying with my rebalance stratey and within the confines of my asset allocation model. And, in doing this ... this conforms to a buy low sell high strategy.
Mr. Market on a health upswing so far today.
Stay Safe, Derf
Currently, based upon the metrics of Old_Skeet's market barometer it scores the S&P 500 Index as extremely overbought with a reading of 120. With this, I'm not putting any new money to work on the equity side of my portfolio. I'm thinking that momentum will still carry the market higher as there are currently 95% of the stocks in the 500 Index above their 50 day moving average while there are only about 45% above the 200. With this, I'm thinking there is more upside to come.
I did open a position in BCSAX this week which is a commodity strategy fund.
Enjoy your summer.
Old_Skeet
Derf
My standard review chart.
Links have now been removed.
Please note that the barometer is not a long term forward looking model that another poster (Junkster) referenced it to, the Zweig Thrust Indicator. Perhaps, Junskter did not have a good understanding of how the barometer works. Interesting, though, this post (along with some of his other post) have now been removed from the discussion area prior to me making this edit.
I use the barometer to assist me in adjusting my equity allocation when felt approperiate. When the barometer reflects that the Index is oversold I increase my equity allocation and when the barometer indicates that the Index is overbought I generally reduce my equity allocation. Pretty simple ... but, effective as this method tends to having me buying equity ballast at low prices and then selling it off at a higher price.
When there is a meaningful barometer reading change I'll update the thread.
Have a good weekend ... and, I wish all "Good Investing.
Old_Skeet
Additional comment. I'm now back to building cash since my rebalance process is mostly complete. With this, I have reduced my equity allocation from 49% to 45% as equities have had a strong upward run of late and were trimmed. This rebalance now positions me overweight in both my income and equity areas by 5% each with about 10% in cash. From my base allocation of 20/40/40 I am now 10/45/45 as I can overweight each area (the income side and the equity side) of my portfolio by up to 5%. These overweights are due mostly to low cash yields. My overweight on the equity side is in good dividend paying equity mutual funds that produce qualified dividends and on the income side in multi sector and hybrid income funds which produce dividends as well. I'm thinking that by the end of the year, if valuations remain relative to what they are now, my cash allocation will build and bubble in the 15% range coming from income generation from inside my portfolio. At yearend, I may elect to do another rebalance as I usually rebalance by the calendar two times per year and other times if felt warranted.
As for my positioning I am currently 10% cash, 45% income and 45% equity. I have reduced cash from my normal 20% range to 10% range because of it's low yield and raised both by income and equity area allocations from 40% to 45% each. Within equities I am overweight in good equity dividend paying funds that produce qualified dividends and on the income side I split the overweight between multi sector income and hybrid income type funds. With this, I'm now back to a cash build mode where all income generated within the portfolio will be used to restore my cash allocation. I'm estimating that by year end, should asset valuations remain close to what they are presently, my cash area will bubble somewhere around the 15% range.
Remember stocks usually go soft during the summer months and with this year being a Presidential election year I'm looking for stock market volatility to continue. Hopefully, a business friendly President will be elected which will be good for both the economy and the stock market. I remember after the last Presidential election there was a big jump in the stock market as a business friendly President was elected.
When there is a meaningful change in the barometer reading I will make post of it.
I wish all ... "Good Investing."
Old_Skeet
We did buy more bonds recently in our private accounts past week.
Past few months mostly stocks and index funds buying
Out tsp distributions are still 90/10
As for me, I'm still deploying cash opportunitstically for the long haul across my accounts to buy stuff I want on 'sale' ... in terms of investment holdings, I'm still >90% in equities, most of which are quality dividend payers set to DRIP themselves for a looooooong time.