401K Monthly Analysis – No change 100116

“My daily SPY analysis shows a down signal. Chart attached. This is using a custom trading system generated by ICE software for Metastock and using my preferences to customize it. The signal is leading and depends on the indicators selected. All trend following systems are lagging price. If we have profited from the last move up in the markets, this may be a time to pare down and get protective if you are cautious like me. “

-        This part of the blog from previously remains unchanged… On the chart for SPY (see below) I have circled 4 areas. These are times when the red 50 day EMA (Exponential moving average) turned flat/horizontal. Markets don’t stay flat forever and the inevitable outcome is a strong up or down move. The two red ellipses were down moves and the last green ellipse was an up move. There is a good chance that the markets could take off upward with a Hillary Clinton win, as the uncertainty would be gone. I think the Mexican Pesos would also stabilize. With a Trump win there will be more uncertainty and we know the markets roil against uncertainty as well as protectionism… In effect we are now sideways looking for an up or down direction…which does not help in our trading/investing/gambling… I call it trading.

“With my previous employer’s 401K funds, the top funds from the monthly analysis are Royce Opportunity, Fidelity Equity Income, Fidelity Blue Chip Growth and Spartan 500 fund (same as SPY). Royce is actually at the top but it is very volatile, and also has a short term trading redemption fee in case we want to get out within a month. Royce has recovered from its low of $8.46 price to $11.55 now. Considering it was at over $16, it moves around a lot. It is better to invest in Royce when all the stars are aligned as it can drop quickly. The FGOVX that I am still in is going nowhere. Still has an up signal on the weekly chart. “

-        This part of my blog from last month also remains completely the same… rather unusual…   

“I have put in a trade on ITRI at the recent secondary buy signal. Also closed out a nice trade on SHOP in my R/IRA. I hold TLT as a hedge against these trades. Currently I am in FB and MTCH, social media stocks. I have also started taking some longer term put positions on the Q’s in case the market tanks in the Fall before the elections.”

-        Update: I closed my ITRI trade for a handsome (15%) profit just as I did for SHOP previously. I sold FB at a small (3%) loss when I had a down signal but remain in MTCH which has gone up over 15%. I have added MDT stock which is slightly (2%) down from when I bought it. I will continue to hold TLT and my put options as a hedge. I am cautious. I believe the markets will go up but will tip toe in as the other side of the coin is a rapid 10-15% move down..