OTM Market Update – More of the Same

Prior Week Market Performance:

  • The S&P large caps gained 0.6% last week to 2110.30.
  • The Russell 2000 small caps gained 0.6% last week to 1230.04.
  • Long Bonds (TLT) lost 1.3% last week to 126.54.
  • Asset Allocation Model: Stocks (52.5%); Bonds (27.5%); Discretionary (20%)

 Last Week’s Commentary:  The technical models have clearly been saying that the market is fine.  I have been paying attention to the classic patterns such as triangles and wedges, but should have been paying more attention to the models that I’ve spent so much time building.  In looking for an edge, I end up cutting myself with that knife.  At this point a market analysis is simple:  the market looks healthy.  Leading indicators are still looking good.  Asset allocation is 45/36 stocks to bonds and the remaining 18% is your call. read more

OTM Update – Learning to Fly with Instruments Only

Prior Week Market Performance

  • The S&P large caps gained 1.6% last week to 2088.48.
  • The Russell 2000 small caps gained 0.9% last week to 1216.27.
  • Long Bonds (TLT) lost 1.1% last week to 129.52.
  • Old Asset Allocation Model: 45.5% Stocks (up from 42%), 36.5% Bonds (down from 41%), 0% Cash, 18% Discretionary.

 Last Week’s Commentary:  There is still a black swan lurking in the water.  The difference between the S&P500 and the broad market in general remains.  There continues to be more decliners than advancers in the NASDAQ composite on a day in day out basis as the chart below shows.  We are keeping another week’s lookout on the S&P.  It needs to clear that 2063 resistance point and stay above it the balance of the week.  If it does, the market will run a bit.  If it does not, look for a down week for stocks, an up week for bonds, and more of the same until the swan appears. read more

Sell or Hold CVS

I have exchanged messages with Mark about CVS and did not sell yesterday (and fortunately there was a nice gain).   Per Mark “Everything is green including sector and industry… consider trailing stop loss of $95.02.  See chart below and please vote to either proceed  with sales at market or to hold with a trailing stop loss. read more

OTM Update – Critical Point Week 2

Prior Week Market Performance

  • The S&P large cap index gained 3.0% last week to 2055.
  • The Russell 2000 small cap index gained 3.4% last week to 1205.
  • Long Bonds (TLT) lost 3.6% last week to 130.
  • Asset Allocation Model: slightly changed at  25% (down from 26%) Stocks, 38% (down from 45%) Bonds, 26% Cash, 10% (unchanged) Real Estate.

 Last Week’s Commentary:  I think the Asset Allocation model is right.  I think that it is time to shift some of your wealth toward bonds, and cash.  I think that we are in a risky period here.  The market has not moved substantially yet, and the technical models are still optimistic in the medium and long term periods.  But I keep waiting for that divergence in the AD Line to hit, and the forming Triangle (some would call it a descending wedge, which is a negative sign) is not a good omen on the horizon. read more

OTM Market Update – We are At A Critical Point

Prior Week Market Performance

  • The S&P large cap index lost 2.8% last week to 1994.
  • The Russell 2000 small cap index lost 2.0% last week to 1165.
  • Long Bonds (TLT) gained 0.8% last week to 135.
  • Asset Allocation Model: materially changed at  26% (down from 44%) Stocks, 45% (up from 39%) Bonds, 17% Cash, 10% Real Estate.

 Last Week’s Commentary:  The asset allocation model has predictably moved to bonds in light of the short term weakness in the large cap market.  But personally I’d give this a week to see a confirming signal in the small and medium caps.  Stay put until there is a bit more clarification in direction. read more