I have not posted in some time but have been refining the technical model. It has been subject to about 25 version updates, and I am preparing for a call on what will likely be a material up or down movement in the market. There is a history of such a thing when the market trades for some time in a narrow range, as it has since July.
On an hourly basis, the technical model would have had you buy the S&P at 1967 on March 1. The S&P closed at 2072 on April 1. So were we to play that game, investing using hourly data, then we would be long the market.
On Wednesday March 2nd I presented at the monthly Atlanta Technical Analysis Society meeting. The presentation was on backward and forward testing using Amibroker. But for this audience emphasis was on getting comfortable with the idea of using Amibroker. Presentation is attached.
The best way to understand the market is to look at it in various timeframes.
Below is a picture of the S&P since 1982. The shaded areas are official “recessionary” periods. At a weekly level the technical model is saying Sell in all periods. So we start with the overarching long term trend as downward.
The S&P 500 dropped 0.8% last week and ended at 1864.78.
As I noted last week, don’t be surprised if this market rises a bit again before a further drop. Technically it appears to be rolling over, but these things don’t happen overnight.
The advice from the January 17 post is still in effect. As the S&P 500 toys with 1880 (it closed at 1853 today) you should prepare for a material drop if that 1880 level does not hold. By now you should only have a small equity position.
As noted in prior posts the 1880 mark for the S&P (which is currently at 1940) has proven an important measure. When 1880 holds there is always the likelihood that we might see another leg up in the market. If 1880 fails there is almost certainly going to be a material collapse to the downside.
Again, I apologize for not updating this portfolio more often. I promise to do better. I have dumped nearly all of the former stocks (for example, I dropped DST at 112 a few months ago). But I am retaining AAPL, CELG, ORLY, and SKWS and adding 5 new picks. Here is a round up of my thoughts:
I inadvertently omitted Verizon (VZ). It remains a core holding as it pays an attractive, safe dividend.
I apologize for not updating you on my portfolios. Yes, I have been busy, but also I have been a bit reluctant to speak, given the poor performance of some of my picks. But today, I will go over the Core Portfolio and offer my opinions and updates on each stock: