401K Monthly Analysis – A Sideways Muddle 5/11/14

The S&P500 (Exchange Traded Fund known as SPY) has been muddling sideways for over 2 months now. Longer if you consider a small movement irrelevant. The Dow Jones just established a new high but the Nasdaq 100 continues to show weakness keeping SPY balanced sideways. There are two possible outcomes. Up or down. Which way will it go? My chart on SPY still points to an exit long, or down, so that is the stance I will continue to take. That means I am exited MY ENTIRE 401K funds and sitting in money market type fund.

Meanwhile my monthly 401K system still wants to keep me in various stock funds. In my current employer’s 401K top of the list is Spartan 500 Index, then Fidelity Eq Income and Fidelity Large Cap… interestingly those are some of the ones that are contributing to making Dow Jones 30 stocks hit its record highs.

In my previous employer’s 401K I see a more aggressive selection. Topping the list is Cohen & Steers Realty, then Domini Soc fund, followed by Vanguard Inst Index. Lazard Emerging markets is also perking its head behind these.

Such is the story on momentum based fund selection in our 401K. Me – I will sit out till the weather clears. It is cloudy. No storms yet. The clouds may very well clear or maybe not. I set up my rules and follow them.