The Never Ending Drama Of Bulls And Bears
Below is a one month Spyders chart or the ETF trading vehicle for the S&P 500, SPY. There are 22 days of trading shown on this chart with the last being today. In that period of time the Spyders ETF has been in a trading band of about 1.5%. That is plus or minus 0.75% for a month. So, while the sentiment surveys show many more investors are now bullish than a month ago, the market has effectively done nothing unless you were swift enough to be in the right sectors. If you are an investor, you have missed nothing other than angst if you were on the sidelines. If you are a trader and you happened to exactly time your entry and exit points over the last few months, you might be up a few percentage points or if you were lucky to be in the two or three industries in just the right days with just the right stocks, you might be up 10%.
On some of my favorite blogs the bulls are dancing on the bear's heads and mocking their bearishness now that we've had a rally. Yet, really, what do they have to dance about? This? Or maybe it is the plus or minus 2.5% band in the equivalent ETF on the Nasdaq 100 over the same time frame? I will acknowledge that 5% for a month is an excellent return but I'm not focused on short term trading per se on this blog. That said, these two vehicles, ie, large caps are where one should be invested if they are invested in my estimation. I prefer the Spyders because they are much stronger and more conservative companies with less volatility. Normally, I love volatility, but not in this market if one is attempting to hold through the night on a rally.
The moral of the story? One will seldom, if ever, pick the exact week when the market tops unless you are willing to trade aggressively and/or have access to extremely sophisticated tools. Strong bottoms? That's comparatively easy. So, unless the squiggles turn into a significant long term gain, one should be happy to be conservatively invested or in cash or conservative bonds while not being concerned about missing something. How many things in life did you miss that, in hindsight, you were glad you did?
Significant break to the upside on the S&P? Target of 1360-1400. Of course, since we exactly hit the 50% pivot on a six year move for the OEX today, most people don't realize today is a potentially significant day. I guarantee you someone at Goldman Sachs is watching that quite closely. Most money managers? They are in a haze. Should we reverse from here in the coming days with the market leaders being the OEX, this could mark a major top. The odds of me calling that? Awfully slim. But hey, why not take a stab at it?
On some of my favorite blogs the bulls are dancing on the bear's heads and mocking their bearishness now that we've had a rally. Yet, really, what do they have to dance about? This? Or maybe it is the plus or minus 2.5% band in the equivalent ETF on the Nasdaq 100 over the same time frame? I will acknowledge that 5% for a month is an excellent return but I'm not focused on short term trading per se on this blog. That said, these two vehicles, ie, large caps are where one should be invested if they are invested in my estimation. I prefer the Spyders because they are much stronger and more conservative companies with less volatility. Normally, I love volatility, but not in this market if one is attempting to hold through the night on a rally.
The moral of the story? One will seldom, if ever, pick the exact week when the market tops unless you are willing to trade aggressively and/or have access to extremely sophisticated tools. Strong bottoms? That's comparatively easy. So, unless the squiggles turn into a significant long term gain, one should be happy to be conservatively invested or in cash or conservative bonds while not being concerned about missing something. How many things in life did you miss that, in hindsight, you were glad you did?
Significant break to the upside on the S&P? Target of 1360-1400. Of course, since we exactly hit the 50% pivot on a six year move for the OEX today, most people don't realize today is a potentially significant day. I guarantee you someone at Goldman Sachs is watching that quite closely. Most money managers? They are in a haze. Should we reverse from here in the coming days with the market leaders being the OEX, this could mark a major top. The odds of me calling that? Awfully slim. But hey, why not take a stab at it?
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