France attacked by ISIS 11/15/15

France experienced an attack by ISIS. I am sorry to hear about those that were killed and their families for the loss of loved ones and the many injured people. Their lives changed. Terrorism adds another layer of uncertainty to the markets. After approaching the highs, the market is withdrawing and I am seeing sell signals. I am out of the market with the exception of a position in a bond fund using the Ivy Portfolio strategy. Also I am still in the vertical calls I had sold on the Nasdaq100 QQQ. That expires in December so I will hold it for a little longer to get more time decay before exiting. Both these positions do better when the market goes down.

SPY has an exit long signal so those that want to preserve capital will want to exit now. Stochastic is bottoming out so it is likely to see a bounce after the recent drops. Although with a terrorist attack, people may not be in a mood to go long. I suppose the computer programs running on algorithms really don’t care.

See chart below on S&P500 (SPY) now has an exit long signal. I usually use it to exit my 401K positions; but since I did not go long in the first place, no changes are needed for me. 

401K Monthly Analysis – Clawing back 11/6/15

The market has clawed its way back to almost its highs. See the chart below on the Spartan 500 fund. It is the only entry open in my current employer’s choices as most of the others are still flashing caution. Emerging markets are very weak. In this environment we would expect bond funds to strengthen but bond funds are retreating at the threat of increasing interest rates. The market is in a quandary as to how to react to the real possibility of a fed interest rate hike in time for Christmas. Unemployment numbers are at its lowest it has been in many years. The US dollar is strengthening at the possibility of higher interest rates, causing oil to remain low. That and the glut in oil supply and that China may be hitting a plateau. We could get a nice Santa rally. I am still cautious and although I should be in the markets, am taking some time out.

In my previous employer’s 401K funds the top choices are Fidelity Contra fund, Fidelity Mt Vernon Growth and Artisan Mid Cap Fund.

In my current employer’s 401K the fund choice is Spartan 500 Fund. Chart below. I would say stay part cash with the rest as there is still plenty of signs that the trend may be tiring. 

See the chart below on the Spartan 500 fund. It is a snapshot over 7 years and shows how the trend has held long for quite some time without a serious draw down, or recession. And with unemployment way down, and Christmas coming up, I don't see a recession in the immediate horizon. However interest rates will likely go up.