Hi Jim: Answers to your questions follow plus RR market comments (lengthy) if anyone interested.
1.) Thanks for asking, Jim. Appreciate you wanting my opinion. Please remember, however, I do not base my decisions on TA primarily. Consequently, discussion about TA indicators is a small factor in my investment style.
2.) I am a position trader. I almost don't want to call it that. I still think of myself as an "investor". I simply have a risk component in my style that is not reasonable for the majority of investors. That is one reason you, and my Friends on here, have heard me say, "don't do what I do." Too risky.
3.) I don't square root the market. I have mentioned that before as well. I firmly believe that if I followed TA to the letter, I'd get clobbered using my style of investing. I don't factor in the negatives. There are, for examples, numerous folks that sometimes frequent the Porch that have all the reasons we will fail. I stop reading them immediately. I can think of too many reasons we will win. The opportunities with certain individual positions is enormous, even with the negative TA indicators. I make money in a down market. It doesn't bother me. I'll make money either way and the quality stocks, like JDSU, will withstand a down market reasonable well. Recall, though, that my view is that of an options investor, positions 6 months out usually, and entering only a very select few that, if I am right with my my positions, will withstand a down turn reasonable well in spite of negative TA.
4.) Money supply is essential. I agree. The VIX is low. That bothers me. We may have seen a top on the NAZ in here. Earnings season coming to an end. What will prop the market up after another week? Good points to ponder. But, I am not going to get hung up on that notion of money suppy, Jim.
I do believe there is money on the sidelines waiting to enter. That will prop the market up if the bargain lights come on. My belief is that the Naz is getting set up to have a huge last quarter. I am already positioning my trades 6 months out. The positions I have been posting on here are not for next week, they are for 6 months from now.
Likewise, the positions I am making huge profit on right now, I was entering months ago, right in the middle of folks saying there was blood in the streets.
Go back and look at my posts in Feb/Mar/April, I was buying constantly and suggesting other do the same. Now, I am proud to say, I am rolling in profit. I intend to do the same 6 months from now with the JDSU/BRCD/NTAP/CREE et al positions I have suggested to the Porch.
Bottom line, I don't get too bothered by the TA. I am not going to square root the market. I enter positions that don't follow the trend of TA per se.
I believe there is a bunch of baby boomers out there doing exactly what I do.... they laugh all the way to the bank. They look at all these negative folks and just say, OK, do it your way, I'll do it mine. And I win. There is money on the sidelines. The fund managers say they are sitting on cash out the yazoo. They are looking for the right time to enter. Thus, I don't see a Sept/Oct crash. It was just 60 days ago that many were saying we'd be in a crash right now, at this point in time. Then they said, well, maybe August. Recently I heard, well, maybe Sept. Now I'm hearing Oct...... give me a break. I personally don't care. Bring it on. I am going to beat this damn market regardless.
5.) The market will have a pullback. I have said that for weeks. It doesn't bother me. Let it happen and I will buy. If I am smart, I'll have my trailing stops set and I'll get stopped into cash. OK. No big deal. I churn my option positions weekly anyway. I smile and come out a winner either way.
6.) I do believe we will not have as big a pullback as expected. It may also happen later than expected. Say Sept, like you mentioned. Also, heck, I could be absolutely wrong. I am wrong a lot but smart enough not to get killed ny my errors. This isn't pee-wee league stuff as you've heard me say. I would tend to agree to look out in Sept. Also, now until Aug. I don't really see anything that makes me concerned about Oct. I think it will be out of the way by then. Elections too close.
7.) I'd stayed invested. If you are a long term holder, buy your stock on pullbacks. Not all at once. Little here, little there. Options traders, heck, if you are that worried you should not be trading options. Period. A good options trader will get stopped out and re-enter on lows if this thing did fall all of a sudden. Jim, I am not going to get hung up on the technicals. You can't square root the market in my view.
I see caution by a bunch of smart investors. Many believe there will be a pullback, but rather than cry the sky is falling, I think they will have a level head and buy. Like I said earlier, there is a lot of cash sitting on the sidelines, waiting.
8.) Bottom line:
a. Pullback, yes. It's coming. Naz will pull back. Not crash.
b. Don't think it will wait until Oct. Think it will happen sooner.
c. There will be lots of buying opportunities for the quality techs, especially sectors fiber optics, broadband, storage, regardless if there is a pullback.
d. 4th quarter will be huge. Lots of opportunities to get rich, regardless of what the TA and money supply says right now.
e. I personally am not worried one darn bit. I will stay invested, just use caution. Again, I am going to beat this market in the butt. My returns this year are already running better than last year, and last year was one of my best ever.
For whatever it's worth, Jim, that's my view. Appreciate you asking but keep my answers in the context within which I framed the response. BTW, I posted my end of week positions statement as usual last night in case you have not looked yet.
Friends, I'm still up in Conn in a Board meeting. Head home tomorrow and immediately get back on a plane for Alaska with full RR family in tow. Will not have internet for a week I don't think. Will have Porch withdrawal. Ya'll hang in there and keep them bulls running.
Jim, have fun on your trip and tell John hello.
RR |
