LOL!'s Market Timing Newsletter

[LOL!]

I disagree that an 8% one-day drop is a minor move at this point. It is true that yesterday's uptick was spectacular, but it wasn't 8% up in one day. It is also true that the market is still higher than it was at some of the low points of the year. It is also true that today is not as low as June 14th lows if one takes into account the dividends paid this month.

I think moves like today are not 100% based on fundamentals, but some part of them are a psychological backlash by investors. I think they can be taken advantage of. That is, days like today are the whole point of this newsletter thread.

Update: exchange order submitted.

 

[Running_Man]

There was a belief that REMAIN would prevail and that resulted in a large move up this week and today just reversed that, I don’t agree that this is a psychological backlash. For the most part this has not hit the average person, especially in Europe, perhaps you have a better feel of immediate reversal but if you look at what happened in 1987 when people reflected on it they came back on Monday and sold and that was when it was the panic hit the market. LEAVE is a heck of a lot bigger event than Fed hiking/not hiking and reaction is smaller. But this is defintely your market timing thread, but you asked if you could be talked out of it....

 

[NW-Bound]

I am up at my high-country home now, and AT&T finally gets an Internet wireless connection up here.

Before leaving the home, I sold off all my wife's 401k in preparation to roll-over to an IRA account. Her 401k is all in proprietary funds, so must be rolled out in cash, not in kind.

If the market stays low when the check gets deposited, there will be bargains to buy. This lessens the pain I am suffering on other accounts.

Funny thing was I made the sale on Wed, and kicked myself when the entire world market rallied strongly on Thursday and I missed out. And today, it dropped 2x the amount it gained!

Man, I was not thinking about market timing, and was expecting and hoping that the market will stay sideways while I move the money. Another instance to remind myself that market timing is tough, and entire world market was fooled by "Brexit" polls.

PS. It looks like all my covered call options will be worthless. This reduces the pain. On the other hand, some cash-secured put options are now in the money, and I will have to buy the stinkin' stocks whether I want to or not.

 

[LOL!]

..., but you asked if you could be talked out of it....

Yes, I did. Thanks!

And I am prepared that Monday will go down some more.

 

[halcyon]

I think I may have gotten a lucky break, maybe. Not exactly timing, but I'm in the middle of a 401k rollover right now. No telling what could happen next week, though.

 

[Lsbcal]

I disagree that an 8% one-day drop is a minor move at this point. It is true that yesterday's uptick was spectacular, but it wasn't 8% up in one day. It is also true that the market is still higher than it was at some of the low points of the year. It is also true that today is not as low as June 14th lows if one takes into account the dividends paid this month.

I think moves like today are not 100% based on fundamentals, but some part of them are a psychological backlash by investors. I think they can be taken advantage of. That is, days like today are the whole point of this newsletter thread.

Update: exchange order submitted.

A contrary example:
Friday, Oct 16 1987: sp500 down -5.2%
Monday, Oct 19 1987: sp500 down -20.5%
December 4, 1987: sp500 hits down same level as Oct 19, 1987
beyond: fitful recovery

Will it happen again? I dearly hope not.

 

[LOL!]

A contrary example:
Friday, Oct 16 1987: sp500 down -5.2%
Monday, Oct 19 1987: sp500 down -20.5%
December 4, 1987: sp500 hits down same level as Oct 19, 1987
beyond: fitful recovery

Will it happen again? I dearly hope not.

I see that as an example consistent with the thoughts in this thread. I don't see it as a contrary example. Can you explain what you meant please?

 

[Lsbcal]

LOL, I just meant that on Friday Oct 16, 1987 we now know that was not the buy point. Waiting some time was the better trade. Could be similar going forward ... or not.

Sorry but I don't follow this thread too much so I might not understand your methods. Just pop in from time to time. I'm fine with market timing.

I do a lot of research before designing a methodology that has worked in the past and that I think might have a future. It might not work in the future and that is the big bet. But if it did not work in the past, that is a problem for me.

 

[Sunset]

I was fretting so much about my CAT calls being callable on Thurs, that I totally forgot about selling my BRK.B calls which were at a nice price.

Only on Friday as I saw the CAT calls were now far below the call price did I notice I missed out on selling the BRK.B I have.

I tried to buy some VTI on Friday , but I priced it too low, maybe Monday will be more exciting...

 

[LOL!]

I'm still buying today. Bought more VEA a moment ago.

I intend to keep buying on every drop and will sell whenever there is a new position with a 1% to 2% gain or so. That could take awhile.

 

[JPatrick]

Buying HDV for the IRA. Purchased w/zero commission thru FIDO.

 

[Running_Man]

I still am sensing no panic just a normal market, the professionals coming on to CNBC today are 95% proclaiming they are “contrarian” and advocate buying. Several did state they saw very big risks but they see big opportunities (depends on the professional but industries mentioned aas particularly attractive are Utilitilty sector, airlines, financial sector, airline sector, REIT sector, international equity sector, oil sector, healthcare sector, manufacturing sector, regional banks, international banks, big American banks....) Cramer claimed this morning there was no chance of a big decline economy is doing too well, in short there is absolutely no fear so I do not see this point yet as a buying point. I don’t know how a bunch of buys in a declining market get reversed by one 2 percent move up, but we’ll see the Central Banks could jump in any day and key a big short term reversal that is certainly true.

I will just say it is my expectation at some point worry will hit and you will see a 200 point down S&P500 day, at that point you will be near the short term bottom. The reason I feel that is the European banks are truly significantly undercapitalized and losing Britain to save the European banking system puts more strain on the German banking system and Greece and Italy will be seen as a major problem. On the other hand if that does not happen and the market just keeps going from here then valuations I see strangling the market in the years to come and LOL will be doing great by playing the short term swings here.

 

[jim584672]

... Cramer claimed this morning there was no chance of a big decline economy is doing too well ...

That just made me really nervous.

 

[LOL!]

Another purchase: Exchanged VBTLX (bonds) to VSIAX (US small-cap value index).

I sure hope something starts going up soon.

 

[Running_Man]

CNBC is reviewing your timing strategy right now basically, checking all 49 days with 3% down or more in the last 10 years and how the market does so well n the following 5 days, though they are picking individual stocks

 

[RAE]

I will just say it is my expectation at some point worry will hit and you will see a 200 point down S&P500 day, at that point you will be near the short term bottom.

I hope you are right about that, Running_Man, but I get the sense that we could see global markets just sort of trend gradually downward for some time to come, with no real huge down days, but no big recoveries either. The reason I say that is that there is a whole lot of confusion out there as to how this Brexit will play out, what it means for global economy, etc, etc.. I don't think any of this will be known for some time to come (many months, at least), so it's hard to say right now what type of thing would trigger a market upswing (short of a decision by the UK to ignore the referendum results, and stay in the EU, which I think is unlikely). I do think that some sectors of some markets could do well (utilities, for one), but overall I suspect we are in for rather prolonged period of market instability. Of course, I may be all wrong.......

 

[LOL!]

CNBC is reviewing your timing strategy right now basically, checking all 49 days with 3% down or more in the last 10 years and how the market does so well n the following 5 days, though they are picking individual stocks

That's close to, but not quite what my market timing strategy is. I will guess that if they only check 3% down or more that is not going to work as there could be several big down days like that close together and buying too soon will get your portfolio killed.

 

[LOL!]

My expectation is similar to what the Schwab Brexit piece noted: August 2011 saw some big down days that eventually led to an October intermediate bottom. So I think it will take some time to work things out.

I think Running_Man's "capitulation" scenario could well play out.

 

[Mulligan]

That just made me really nervous.

Im still waiting for him to recommend what earned me almost 10% last year and over 6% this year.... Investment grade preferred stocks.. I am starting to turn blue waiting... But if he does, it may be time to sell!


Sent from my iPad using Tapatalk

 

[RioIndy]

Well I made a few decent trades. Switched Precious Metals Funds (+7.29%) into International Equities which were down 6.66% for a total swing just shy of 14%.

(Finally, Finally, FINALLY!!! starting to see some returns on that Gold after ~5 years of holding and DCA'ing down)

 

[LOL!]

With VEA up about 2.6% to 2.8% from yesterday's purchase price, I am submitting orders to sell shares.

It looks like a little bit of fading in price in the last 30 minutes, but maybe that's a head fake. If I don't get my limit prices, then I'll just see what happens tomorrow.

Update: Orders filled for a 2.75% gain. And the dip around 15:30 ET was just a head fake. It appears that VEA (and other things) will end up close to the highs for the day.

 

[LOL!]

With markets up another 2% today, I will be unwinding more of the recent purchases. I intend to sell things similar to the things recently purchased. For instance, I will not sell VTIAX (total international), but will sell shares of VEA instead. I will not sell VSIAX (small-cap value), but will sell VXF (mid/small-cap index) instead.

After these sells, I will still have some more unwinding to do, but that won't happen today. Update later.

And the update: Sold the shares I intended to sell and bought some AGG with some of the proceeds. I even had the AGG buy order filled at 15:59:55.

 

[LOL!]

More unwinding today by selling VTI, VEA, and VSS.

 

[NW-Bound]

My wife's 401k rollover will not get into the new IRA account until next week. So, I missed out on the opportunity of this stock sale.

I liquidated the account to cash on last Wednesday before the big pre-Brexit rally, so missed out on that too. I think today her 401k mutual funds recover to where I sold them at.

I worried about being out of the market during this 401k rollover, so put all the cash at my disposal into the market to make up for it. However, this cash amounted to only 1/6 of that 401k balance. But, but, but I did deploy them into leveraged ETFs, so that helps offset some. However, that means I have been out of ammo, and can only watch the market without being able to do anything.

I still have lots of cash in I-bonds, but it takes 3 days even if I want to liquidate it. And going into margin is risky because I cannot meet possible margin call with the cash in that 401k.

Oh well, the market cannot go on forever from here. I will get some chances later.

 

[LOL!]

All's well that ends well.

June was a fun month. Portfolio high was on June 8. Almost reached it again on June 23. As we know, things dumped and recovered. So end of June had the portfolio higher than at the end of May and gained on benchmarks during the month despite a significant weight to international funds.

And I was totally wrong about the FOMC raising of rates. Intermediate-term bond funds were up about 2% in June. With the market recovery here in the past few days, is a rate hike back on the table for July?