Year: 2014

OTM Investing Market Update Oct 5 2014 – Trouble in the Air

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If you just look at the S&P 500 chart, you’ll see some volatility but no violation (yet) of long term trend lines.  However, the Russell 2000 begs to disagree, and that is significant. The Russell 2000 is an index composed of the 2000 largest “small cap” stocks.  While it is far more securities than the 500 in the S&P 500, the total capitalization of Russell 2000 companies is only 10% of the S&P 500 large cap stocks.  Historically, small caps lead large caps, both up and down.  And that is where the concern lies. The chart below is a four year picture of the Russell 2000.  The index has dropped below its long term trend line.  It is SELL on all three technical models.  And the index is right at the neck of a head and shoulders pattern, which technically is a strong indication of a meaningful change in direction.   Looking at the Russell 2000 over the more recent, shorter period, you can see the peril in the indicator. The S&P 500 has yet to violate the long term trend lines that I pointed out last week.  But the increased volatility of the near term, coupled with the “divergence” of the Russell compared to the S&P, does raise a number of very serious questions about the strength of the current rally.  Small companies have fallen — will large companies follow suit? Conclusion:  Keep a very close eye on the S&P over the next week or two.  We’ll let the models take us where they take us.  But increased scrutiny is warranted. read more

October 1 2014 Market Update – Keep your powder dry

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The overall technical model still shows a positive view on the S&P500 for the intermediate and long terms.  As you can also see, there are three resistance lines ranging in age from 1 to 5 years that have yet to be pierced. As the asset allocation page shows, it is still wise to remain in market index ETFs and funds.  No need to shift your assets to cash or bonds as a hedge for the intermediate or long term. read more

Ensuring Adequate Retirement Income – 5 steps

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A short, to-the-point article from the Wall Street Journal about the 5 things to do to assure adequate income at retirement.  Good read.

URL Link to Article

How to Ensure Adequate Retirement Income

By JONATHAN CLEMENTS Aug. 30, 2014 8:30 p.m. ET Retirement is hard work these days. How do you generate enough income in a world where the S&P 500 yields roughly 2% and 10-year Treasury notes offer 2½%? Here’s my five-step plan:

1. Delay Social Security.

Suppose you retire at age 65, at which point you’re eligible for $20,000 a year in Social Security retirement benefits. If you put off benefits until age 70, you would miss out on five years of benefits worth $100,000. In the meantime, you’d likely have to cover your living expenses entirely out of savings. read more

Market Update September 1, 2014

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Short, Medium and Long term indicators for the S&P 500 are all favorable.  The index itself is in the middle of an up channel.

Currently the S&P is at 2003.  The channel ranges from 1925 to 2050.  So there are 47 points above and 78 points below the current index value in the channel.  I would prefer a 2:1 ratio of upside potential to downside potential.  At a ratio of 47:78 we do not have that 2:1 target.  So I would wait for a slight pullback to put any additional monies into equity index funds or ETFs. read more