SPY finally offers a change in signal 6/21/14

While the rest of the trading world has been basking in an up signal, my system on ICE had only offered a “Possible Buy” opportunity that had not materialized last month. It finally changed last week. Someone as technical systems bound as I am, stayed frustrated to see the markets rise while I sat on the sidelines in my 401K. Yes, I have been trading my R/IRA with the Ivy portfolio as well as stocks; but this has otherwise been frustrating for me. But I need to forget results, focus on following the process and not let emotions matter as the results do come over time..

ICE has coughed up an Up signal on SPY (S&P500). See chart below. I am back in my 401K in a large way; but remain partially committed. There must be a pullback due? How long can we keep climbing up? As long as the system says up. Here are a couple opf stocks I am in also... AES and TAN.

I have noted that Gold is perking up as evidenced by the rise in the ETF NUGT. This one will be ripe for entry on a pullback. Meanwhile I must also start thinking about how one can take advantage of the down side coming down the road.

Moodiness of a Trader 6/1614

Traders are human and are subject to moodiness based on events in their own lives. I have often wondered why Wall Street hires young smart people and gives them millions of dollars of money to manage when they have so little experience. I believe it is because young people are fearless, and do not know what losing money means. It is still a game. They have not experienced life enough to face failures and fear. Brash, cocky, confident, are best described of people who are young. As I see the Soccer World Cup and I see countries come back from a loss to overcome opponents that are supposed to win and beat you, I think of that term “Know no Fear”. I can overcome anything.

I used to be that way …. when I played soccer for my School and College. I remember being the freshman defender of my soccer team. Regardless of my size and puny weight, I knew no fear. There was no player that I could not beat in a tackle.  Foolish, overconfidence of a young man. Yet it was so right.

We have a Collie at home. His name is Roscoe Bear. He is about 10 months old, 70 lbs weight and still a puppy. A very handsome beautiful dog like Lassie. With us he has no fear. But take him outside and he is afraid of skateboarders, people walking their strollers, kids playing; yes; pretty much everything. Where is his “Know no fear”… but he is a beautiful dog and we enjoy the love he brings to the family.

I now want to weigh in on the intraday trading system that I have developed for Nasdaq futures. It looks good. I now have 3 indicators on it. Two main indicators, two main systems intertwined, and one more indicator to allow me to get out early when a trend takes place and then starts weakening. I believe this system could make me far more money than my current job. I could make a Million a year (or lose my seed money for the trades). But my age gives me the wisdom that says I cannot afford to take a risk and give up the job I have, a job that will never make me really rich, just keep us fed and taken care of. What is it we want in our lives? Don’t we want to take a risk and see if we can make it on our own? But what if we fail? Then what are we left with? Business people and entrepreneurs take that risk all the time. That is why some of them are so rich, but many have failed and we never hear about them. We fantasize about those who made it. History books are about the winners. Never the losers..

I can do this on my own, but never will. Moodiness of a trader….

401K Analysis – Summer Rally? 6/1/14

Are we looking at a no sell in May and go away and instead a Summer rally? Merrill Lynch fellow thinks so… and they think there will be a “nasty” correction later this year without defining what “nasty” entails. The media show knows how to latch on to these people and create a story out of nothing. The only thing we know definitively is the market is showing no signs of giving up its upward swing. And we know that by looking at the past behavior which is always correct. For now, my ICE system on SPY remains irritatingly exit long. Which means I am not invested long in my 401K. I should point out that I am taking long trades on my quicker get in and out stocks in my Rollover IRA, as well as invested in my Ivy portfolio system. Still, I will do the monthly 401K analysis and look at what are the strongest funds one should be in and here they are….

In my current employer’s 401K, the funds with the greatest momentum are Spartan 500 Index, Fidelity Equity Income and Fidelity Large Cap. WFA SPL Midcap VL has also started showing some movement upwards.

In my previous employer’s 401K choices, I see Cohen & Steers Realty, Domini Social Eq, Vanguard Inst Index as the strongest although Lazard Emerging Markets fund has been on a tear lately. I have been looking at the Lazard Emerging Markets Index and it has enough volatility to make me start thinking about using a technical trading strategy on it to make some profits. This is a weekly chart and does not require a daily monitoring at all. In the last 3 months it gave an up signal at $17.52 and it is now at $19.70. That is over 10% in 3 months… Also I notice that this fund had a very very steep drop in 2008. The trading system prevented the drop and exited well before the damage was done; but when the entry signal came back in 2009, it rebounded with over a 100% gain that first year... this happens once in 10 years, but it is something to be aware of to load up and capitalize on...I will have to integrate that as part of my strategy for 2015. No hurry.  I wish Fidelity and the other fund companies would not have all these rules about market timing and how frequently one could enter and exit a fund. After all it is my money…but then I am the little guy.

As Warren Buffet said, the first rule is never lose money and the second rule is never forget rule1.