By "Pivotal day" I meant we were in a period where my models were all kind of converging on the current market pricing -- which often happens with my models if the market makes a move, then sort of wobbles about for a while. Note, I'm modeling the NYSE Index, a very broad indicator, which rose sharply from mid-October through most of November, but has "consolidated" since then.
Today the models were conflicting -- so, I rated the day a "Yellow" light, or "Cautious". It was clear that any decent sized move today was going to shift all my models into either a strongly bullish or bearish stance. So, that's why I called today "pivotal". All my models now agree again, and they agree that right now is not a great time to be in the market, if you're a short term trader.
If you're a long-term trader, I still think the Nov-Jan Effect is on your side. So my personal, judgmental, non-mathematical opinion is that, yes, we may have a dip here, but the strange things that people do for tax purposes in December and the investment of bonuses and profit sharing that happens in January will minimize the depth of the dip. I'm still fully invested -- but the models, which are primarily short term, are giving a "unanimous" warning that today's downturn was the beginning of something bigger. Actually, yesterday most of the models pointed down too, but not all of them.
Does this help? There's more info on the web site, which I'm in the process of repairing after unexpected actions taken by my server provider.
Kevin Farnham |
