Current Market Action.

Current market action.

The good news is that we may get a buy signal on a long term basis soon. We need to wait and watch the price action next week before we confirm this. For the medium term the stock market may kick in to a sell mode. And on a short term basis it is advisable to take profit, since on a short term basis we are reaching an extended territory.

The medium and short term market signal information is displayed on the left side bar under “Market Trend”.

To see which sectors are working in the current environment click on the tab “Sector ETF Analysis Weekly 9/23/2016” at the top.

Also see the chart under “Growth vs Value Chart Updated Weekly 9/23/16” tab to see if you need to change your allocation between growth and value.

These two items are updated every week, so do check them every week even if there is no new blog.

Buying Opportunity

Today’s market action is a buying opportunity.

Start adding to stocks or SPY from you cash holdings. Do not move all your cash to stocks in one day. Keep on adding 5% of you cash position to stocks every time the market goes down.
The probability of the market going higher in the next few weeks is very good. Investing in the market works in probabilities. There is no sure thing for short to medium term trading.

The market has been going sideways for the last few weeks in a very tight range. It did look extended but with Friday’s (9/9/2016) price action we started to wait for the short term signal to give a buying opportunity (become less extended) before buying. Starting today we believe that opportunity has started.

As we have been saying the price chart of S&P500 index shows the medium and short term signal on the market is a buy but the long term signal on the market is still a sell. This information is displayed on the left side bar under “Market Trend”.

Analysis of today's Market action

Today’s action should give us a buying opportunity with a week or two.

The market has been going sideways for the last few weeks in a very tight range. It did look extended but with today’s price action we need to watch if we will get a buying opportunity in a week or so. Wait for the short term signal to give a buying opportunity (become less extended) before buying. It is not there today but the process of reaching a short term buying opportunity has started.

As we have been saying the price chart of S&P500 index shows the medium and short term signal on the market is a buy but the long term signal on the market is still a sell. This information is displayed on the left side bar under “Market Trend”.

“Sector ETF Analysis" and “Growth vs Value Chart" updated

To see which sectors are working in the current environment click on the tab “Sector ETF Analysis Weekly 9/2/2016” at the top.

Also see the chart under “Growth vs Value Chart Updated Weekly 9/2/16” tab to see if you need to change your allocation between growth and value.

These two items are updated every week, so do check them every week even if there is no new blog.

Current stock and bond market conditions

Current market conditions show a lower global long-term growth and lower fixed income yields relative to historical norms. This should translate into a more challenging investment environment. Stocks will have a relatively high valuation and bonds will offer limited income.

How should investors allocate their portfolios in this kind of environment?

Our opinion is that investors shouldn’t let the current conditions dictate their long-term portfolio strategies. The long-term return expectations are muted but positive and patience with a broadly diversified portfolio is likely to be rewarded over the next decade with fair inflation-adjusted returns.

Looking at the price chart of S&P500 index the medium and short term signal on the market is a buy but the long term signal on the market is still a sell. This information is displayed on the left side bar under “Market Trend”.

The market is going sideways for the last few weeks in a very tight range. It does look extended so this would not be a time to add more money to stocks. Wait for the short term signal to give a buying opportunity (become less extended) before buying.

As always since the long term signal is a sell, be prudent with 70% invested and 30% in cash.

To see which sectors are working in the current environment click on the tab “Sector ETF Analysis Weekly 8/26/2016” at the top.

Also see the chart under “Growth vs Value Chart Updated Weekly 8/26/16” tab to see if you need to change your allocation between growth and value.

These two items are updated every week, so do check them every week even if there is no new blog.