BenzWorld Senior Member
Date registered: Sep 2008
Mentioned: 0 Post(s)
Quoted: 9 Post(s)
I believe we put in a generational bottom in march so if you have a 10yr or longer time frame I would be investing now, and dollar cost averaging over the next 10yrs.
In my trading portfolio where I was once a swing trader/buy and hold investor, I am now predominantly a daytrader with a few positions taken on specific thesis plays (TBT, ETFC, ABAX, GMO).
So what would criteria would I use to make a definitive call on market direction?
Since I believe we have put in a bottom, testing that bottom and breaking through to the downside would be about the only thing that would have me 100% short, and moving heavily into protection for the long term.
To the upside, before I would move into a more risk tolerant position (out of Bond and Gold/Silver) I would be looking for a few conditions
1) I'd want to see a clear up trend in commodities, and I'd pay particularly close attention to the Industrial metals complex, and Oil demand
2) I'd like to see money start to flow from consumer staples to discretionary, and from Bonds to Equities
3) Direction changes in GDP growth in the developed world (the third world wont be changing until the up trend is obvious and well established)
1) No matter what anything else says, unless the S&P is above 1000 I am going to remain very risk intolerant
2) In addition to a prolonged up trend in the A/D line, I want to see a confirming trend in 52wk, 3yr and 5yr Highs/lows
3) Break above the 200ma on the Weekly confirmed by the 50ma above the 200ma
Until one or the other of these sets of events occur I am going to remain in a portfolio wide risk averse position and in my trading portfolio I am going to attempt to generate alpha with short term momentum trades based almost entirely on technical indicators.
These are a few bullish signs in my view:
Since we broke above the zero line on the NYSE ADL in mid-April, that's bullish. A very steep positive slope is another bullish sign.
The average dividend yield for all S&P 500 stocks (incl. non-zero) is 2.26% currently. Well down from its highs, I would add another to the bulls. GE cutting it's dividend is another add to the bulls.
The S&P trading above it's 13-day EMA for the past 2 months is another add for the bulls.
Finally, the majority of media/talking heads/public still think this is a bear market rally, instead of a long-term rally. The theory of contrary-opinion would call that bullish. They are always slow to the changes; i.e. late to the party, slow to the 1a.m. cut-off, then start demanding drinks at 2a.m.
When devils will the blackest sins put on, they do suggest, at first with heavenly shows - Othello