LTK, if you look at the chart with the 20 month moving average, it seems that the time to buy is when the NAZ reaches that level (only in 1998 it stayed under for a short period). That was one main reason I had 2950 as a potential low (for last week). Yesterday mildly negative sentiment readings (tick-1276 and STTI at above 8 on the NAZ) persuaded me to move back in on the bounce, however, the failure to hold 3300 this afternoon, reversed that signal. The fact that the sentiment indicators where not eve as negative as yesterday force me to reexamine the 2950 postulated bottom. That mistake in judgement yesterday cost me a cool 5%, of course, it is better to be 5% down from last week than in a week or two see myself down 30%, so running for the hills and capital preservation forced me back to 80% cash.
I still expect the 20 months line to hold, but maybe we should also wait , concurrently with that holding to see extreme readings in the Naz and NYSE ticks and STTI (ARMS). I'll wait for these signals before starting to recommit. By the way, I still expect us to come out of this with a strong summer rally going into election, but what I expect and what the market does, have from time to time differed (G).
Zeev |
