I think that if I were a trader, I’d probably be going right out of my mind. I don’t know how long and how far this market can go, but traders are all over this world saying No Way this market can keep going higher, and have been trying to pick the top at resistance levels and attempting to short it, so as to profit as it declined.
Yesterday was a perfect example. I think, if I remember correctly, the S&P 500 is now within 2% of its summer all-time highs??? Really?!?!? Our own holdings are within 1% of a new high.
I’ve written that it has been meeting with resistance. I said that the technical indicators are extended. I’ve been expecting it to turn back down. I’ve even expected it to take out the August/September lows one time… just to scare the living bejeebers out of everyone. In fact, I had wanted that to happen so that I could ‘load up’.
Well, so much for my expectations and prognostications. Did I tell you predicting was hard? Especially the future??? I believe that was a Yogi Berra line. This entire month is about ready to go into the books as a record month… of something like a 10% increase from the end of September bottom.
Yup, if I were a trader, I’d be dazed and confused. But, I’m not! I’m an investor. I was a buyer in late August, and advocated buying the end of September. But, this brings up another point… why, when it would seem to be so easy to identify low-risk market entry opportunities, does the money come out, and go to work to push stock prices higher on pretty big volume, like it did yesterday, weeks and a considerable % higher off the bottom?!?!? I find that to be just as strange and indecipherable as the fact that despite all the reasons, from a purely technical perspective, this thing should have taken another dive long ago.
Then, get this… the 500 is now back above both its 50-day and 200- day moving averages. It is even back above its own 17-month simple moving average I’ve written about before. Which, should it close Friday above those numbers, may well bring all new money into this market, as that close would technically mean the Bull is not dead, and would appear to be taking on all new life!
Further, there’s the whole other Sell in May, and Go Away crowd that re-buys back into the market in November. I met just such a professional money-manager this past summer. If he didn’t, I would think that he would have sure wished he’d gone back to work on October 1, instead.
We’re about to put October in the books, and that means… new monthly brokerage statements soon! And, that means I’ll be recording and reporting our October portfolio dividend income, and its growth! It will be my ‘Christmas in November’!!!
I wrote last weekend that I’d keep an eye on VFC. Have you? It’s looking just like it’s saying, ‘Don’t worry about a thing,’ doesn’t it? Up Monday, Tuesday and Wednesday, after the near 13% sell-off on Friday. My take of the earnings release was that I could see nothing fatal in it, but I don’t rely on my opinion, but rather, I try to learn what the collective market is going to say and do about such news. Well, the reaction Friday is beginning to appear to have been a classic over-reaction, which is now righting itself. For now, I’ll sit tight with VFC. I don’t think it’s in trouble, but temporarily.
Finally, all that said, the futures are trading overseas down by some 4 to 5 tenths of 1% as of 6:30 a.m. EST. That must surely be some kind of precursor to a horrific crash??? One last thing: Favorable seasonality also kicks in about here, as new 401k Plan monies also typically gets put to work about now thru much of next week. Let’s see what happens next. I’ve got some cash waiting, but it may have to wait for some time now.
May God bless you all, here’s to your successful investing!
Harold F Crowell