401K Monthly Analysis – All Bond funds 2816

The market remains in a downward position; but looking at the chart below on SPY, I see that support is still holding. Support is the red horizontal line. In fact the slow stochastics is showing an upward tilt. However price is still below the blue line so our posture should be to look for trades on the down side. See chart on SPY below.

Interestingly the monthly 401K funds are decidedly negative. This is demonstrated by my last employer’s 401K fund choices where the preference is only to be in FGOVX which is the Fidelity Govt Income Fund, a bond fund. See chart on FGOVX below. No other fund choices are recommended!

And in the 401K choices for another employer I was with, the only two funds recommended are FGOVX and PIMCO GL BD ADM. None of the stock funds are positive. So we sit and wait. No hurry to rush in.

I did dip my toes into the NUGT leveraged gold miner’s fund at around $25 and got out this week at $37. Nice tidy profit in a week. But caution – this ETF will move fast and can smack you. Today it dropped 11%. See chart below.

I have recently changed employer and taken a new job. What used to be my current employer's 401K funds has now become my last employer. And the employer before that I refer to as another employer. I cannot wait to start another 401K with my new, current employer.

401K Monthly Analysis – What a start to 2016!

My posting has been a week late as I have moved to California with a job change. It has been busy, hectic for me and has left our whole family with a feeling of being displaced (which we have been!). It will take some time to settle down. We are still in a temporary rental. It took a week to just get Time Warner Cable to come and give us internet and cable. But the market waits for no one and it started this year with a bang. My chart on SPY gave an exit signal back in 11/27/15 and I have to say that I have been out of the markets as I am very conservative. The advice for a more aggressive investor would be to follow the monthly choices but even that has shown weakness finally and the signal is exit.

In my current employer’s 401K choices, the word is nothing looks positive so it is time to exit. It is unbelievable how fast the market has dropped. It is also at a place of support and if it penetrates through that support level then we have a lot further to go. Normally I would expect a bounce before the drop. As for me, I am staying out and will not dip my toe in.

In my previous employer’s 401K choices I see the same. Everything looks negative on the monthly analysis. That does not happen too often. Best to exit and stay out.

Oil has been crashing and now with Iran coming on stream shortly, the world will be flooded with more oil. No one is willing to cut back production. OPEC is neutralized. The Saudis and Iranians are in serious dispute and very upset with each other over the shooting of a cleric. The Pakistani Prime Minister is hopping between the two countries to ease tension. Never have I seen that before. Russia and the Ruble is down. So is the Canadian currency with oil sliding… what a start to 2016!

401K Monthly Analysis 12/17/15

The market is again at a crucial juncture. It wants to climb higher but the pressure of daily and weekly resistance is against its doing so. My daily and weekly time frame charts on SPY both show downward signals. See the charts below…That is really quite unusual. I am sitting on the side lines right now. I had dipped my toes in for a put option position on SPY but quickly exited with a small profit after the market went down and rushed up on Friday.

In my previous employer’s 401K, the recommendations are to be in Cohen & Steers Realty fund, Fidelity Contra fund and American Century Income Instl. Vanguard Instl Index is also a valid choice after these three.

In my current employer’s 401K the fund choices are Spartan 500 and Fidelity Growth. That means the third choice would be cash or money market.

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.

Clawing its way back 102415

The market is clawing its way back towards where it was.  My chart on SPY shows an up signal on 10/6/15. It was a signal that I found hard to believe made sense but that is the advantage of a cold and mathematical calculation based on logic. It pinpoints ups and downs and minimizes risk and sometimes reward. Yes. Technical analysis is far from perfect. It can also result in losses. But it is the only logical way that I can control my emotions and attempt to follow a red-green light approach to investing.

From a fundamental standpoint the economy is growing and appears to be picking up some steam as measured by GDP quarter to quarter. Unemployment is down to its lowest levels in the last 8 years. Interest rates are still low due to fear of a global recession, although Janet Yellen is very likely to at least put one small step forward in increasing interest rates in the next 6 months. Oil is down. Inflation is low, too low actually at 0% after considering oil. Desired target for inflation is 1-2%. So whats there to worry about?

A lot actually… the US election process will gather steam injecting its level of uncertainty. And then there is the unknown and the black swan. Still, this is an environment for moderate investing while keeping an eye towards the door. The market has been going up for 7 years now.

401K Monthly Analysis - Caution 10/11/15

The market has bounced from its lows and it is normal to feel that I should get back into the market. Having avoided the drop, I have to now look at re-entry. The overall chart on SPY shows an up signal but will soon run into resistance at 204. The market is still seeking direction. Short term stochastic is high and I expect some pull back. See chart below on SPY.

It is also interesting that in my 401K analysis the funds that are coming up for investment includes Contra funds and bond funds. This is the first time I am seeing bond funds show up. Not a good sign… as this is a momentum based system and normally it stays in stock funds. Also most of the funds are showing negative values when analyzed across a longer 3 and 6 month performance time frame. I do not like to put much money into the market when I see negative results over a longer time frame as this. Therefore I will sit out.

In my previous employer’s 401K funds the top choices are Fidelity Contrafund, Fidelity Freedom 2000 and Fidelity Govt Income.

In my current employer’s 401K the fund choices are now also more conservative. The top funds are Fidelity Freedom 2000, Fidelity Govt income, Spartan 500 Fund. The last one is similar to SPY. The choices of funds that the system is introducing are more bond funds, at least at a 50% level.

I am sitting in money market in my 401Ks and will consider getting back into other funds in a small amount only after a pullback on SPY. That will be tricky as the pullback could change into something worse; but as long as I have an up signal on SPY I will be looking for an entry.