Market Topping? 3/6/15

The US markets have been on a tear for over 5 years now… and we wish it would stay this way for another 5. The latest jobs data shows unemployment at 5.5%, a long way down from the 10% we were at back in 2008. QE has worked to boost the economy and low interest rates have allowed the stock markets to flourish. But with the 5.5% unemployment the market worries that the Fed will start raising interest rates. Higher interest rates may slow the economy… and therefore the markets took a breather.

When I look at the chart of the Dow Jones 30 as depicted by the Exchange Traded Fund (ETF) known as DIA, I see a down signal. This down signal is still under the background of a strong up trend. Prices are still comfortably above the 200 day moving average shown as a dark black line on the chart for DIA below. Almost all the market move up this year has been nullified after the steep drop today. Also note the trend line violated on the OBV (On Balance Volume) panel at the bottom of the DIA chart. I have found that to be something to keep a watch on for shifts in trend. For now I am expecting the market to continue to show some weakness. I am considering selling some call spreads on DIA... 

I have to be wary as we are still in an uptrend.

One ETF that I am in is TBF. It is an Inverse Bond fund. See chart below on TBF and the long entry signal it flagged in green. I believe that trading TBF or TLT depending on which one is giving a buy signal allows me to trade a bond fund almost all the time… the chart on TLT has a down signal and is starting to get to being oversold… that means it is soon going to take a small bounce before it takes another drop.

A trade I just closed out today on market open was the trade on TAN (solar ETF). I review charts at the end of day and placed the trade to close my position next day market open so that it will close out without my having to watch it. TAN has had a very healthy bounce thanks to a Chinese Solar company that has moved up over 40%. It is a significant holding within TAN, or so I have read; but TAN is extremely oversold… see the pink balloons above the price and it was time for me to bank profits. I like to call it quits when I see two pink balloons above the price… as TAN is very overbought at that stage and traders will take profits (like me). I am mostly cash now…

Chart on DIA

Chart on TBF

Chart on TLT

Chart on TAN

401K Monthly Analysis –Market Update 22815

Markets Analysis: The markets have continued to move up in a low interest rate environment and now fueled by the QE coming from Europe. My stock chart on SPY (S&P 500) remains mysteriously pointing towards an exit long signal while the markets have moved to new highs… The chart on QQQ shows an Up signal. See charts below.

Looking at my past employer’s 401K the top performers that the momentum method favors are Mt Vernon Growth, Cohen & Steers Realty and Vanguard Instl Index funds. Next choice would be Artisan MidCap FD.

In my previous employers 401K funds the high performers are Fidelity Growth Strategies, Spartan 500 Fund and Fidelity Fund. Fidelity Div Intl has also broken out of its downward funk and is the 4^th choice. The chart below on Fidelity Growth Strategies shows a short term sell signal based on being overbought. It has had a nice move up. The bottom of the barrel is Royce Opportunities…which has not done well and is still in a consolidation downwards...