Wednesday, June 15, 2011
06/15/11 Stock Losses Deepen/ Portfolio Losses Deepen
You can gauge my performance these days by market headlines.
It's OK. I'm mentally prepared for this. Sure, I cracked a smile at yesterday's green, and I'm wincing at today's red. But that's how the buy-and-hold path unfolds. Not unlike the broader path called 'Life.'
I've joined the majority of investors in deciding I can't time the market. Let it be.
When I find myself in times of trouble
Mother Mary comes to me
Speaking words of wisdom
Let it be
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I have been watching the market from a distance and returned on Monday from 3 weeks @ our nation's great National Parks in Utah, Colorado, Arizona, California, and Vegas :)
ReplyDeleteMy guess is the BLT (Bin Laden Top) has played itself out for the most part for the time being. The stretched bullish extremes that we saw the last week of April and first week of May have now reversed to bearish extremes.
1) I saw a huge headline today on the front page of the USA Today about how the U.S. has 7 weeks before it blows up.
2) Put Call closed at 1.36 which is the 2nd highest in the past 2 years behind 5/10's 1.53 which resulted in a 2 week 150 point Naz rally.
3)10 day Put call closed at 1.14 which matches the previous 2 year high.
4) Dumb money is 29% bullish while smart money is 58%. We may see a larger spread when closing numbers are published later today. Dumb $ bullish % was above 70% 6 weeks ago when I commented about the BLT.
5)From yesterday's ST: "Put/call ratios can trend along with the market, which is why we also post a de-trended version of the indicator. That indicator, too, is at a historic extreme.
Since 1997, there have been 5 times the De-trended ratio reached this kind of extreme (8/28/98, 10/8/98, 10/12/00, 9/21/01 and 3/19/08). All were at or within a day of at least a several-week rebound.
The large number of extremes has stretched both our Intermediate-term Indicator Score and Short-term Indicator Score.
There have been 9 days since 2000 that the Intermediate-term Score was beyond 1.50, and the Short-term Score was beyond 0.65. During the next three weeks, the S&P rallied every time, averaging +5.7%.
My goal is to jump on the "buy and hold" bandwagon as I really don't want to trade any more.
ReplyDeleteIn that light, I picked up WFR at the close. More insider buying last week 15% above current prices. Historically, the stock always trades 20x its current eps run-rate. 1/3rd of the company, its Sun Edison division alone will do $1.30 in eps in 2012. Its backlog continues to build out into 2014. Book value is 23% above today's close.
As always, will have a tight stop in place.