It is Labor Day. US Open Tennis matches are washed out with
rain. The market is a mixed bag. August was the worst down month since back in
November 2012. I am reminded of the saying “The Trend is your Friend” and let
me add… (..Until the End). So are we at the end of the uptrend? I don’t think my predictive values are any
better than anyone else’ as no one really knows. I see divergence between the last
two tops of indicators and the last two tops on prices. This can stretch to
three tops but every corresponding weaker top on the indicator means there is
more weakness. In fact if this happens again, it would be an excellent time to
buy put options as the market reaches its highs but the indicators do not. But
overall we are not in a very weak stage yet. Certainly not like bond funds or
emerging markets. I feel the market will snort its way back and put up a fight
against the bears. I am personally taking a cautious approach in my portfolio.
When I see a down signal on the SPY, I abandon the equity funds in my 401Ks.
And right now I see a down signal in SPY and also on Bond funds, so I am out of
those as well. Still, for the more aggressive investors, my monthly 401K
analysis of where to put our money follows for my current and past employer.
In my current employer’s 401K funds, the top funds are
Fidelity Blue Chip Growth, Fidelity Large Cap and WFA SPL MidCap VL. Royce is
strong as well but the short term redemption fees keep me away. I am staying in
all cash till SPY flags an Up signal or exceeds the value at which it gave a
down signal. Sere SPY chart below as well as a chart on Fidelity Blue Chip
Growth.
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