The market is starting to feel panicky. I’m wondering if we’re close to a major bottom signal being triggered.
Elan
4 Likes
funny…I was just coming here to see if mungofitch had anything to note on that topic.
feels close, but probably not quite the flush yet.
For my part, certain stocks have hit prices I previously considered “fantasy targets” while many others still have a ways to go.
The market doesn’t have to care about, or adhere to, my made-up wish list of price targets, but following that logic, I expect we need another wave or two to take out the stragglers.
Dreamer
1 Like
Institutional selling is still methodical and more in keeping with a slow grind down. Bottoms occur when sellers are desperately vomiting their shares, which isn’t happening yet.
12 Likes
Not a peep from my signals.
They need weakness for more than a single day to get interested.
Stubborn little fellas.
Jim
17 Likes
Not a peep from my signals.
They need weakness for more than a single day to get interested.
Stubborn little fellas.
Yeah, I’m not really surprised. I suppose the market will have to get below the Feb. 24 intra-day bottom for anything to stir. We’re only 5% away from that. Or maybe it’s much farther off. The 2020 bottom was at 50% of where we are now.
Elan
1 Like
There is panic in certain corners of the markets, but they’re not equities. Fixed income, preferred, closed end funds – some of the pockets where good value is presenting itself.
JPM-D: Tax advantaged 5.75% coupon trading par
SCHW-D: Tax advantaged 5.95% coupon trading par
SBI: Unleveraged 13% discount to net assets (zhttps://www.cefconnect.com/fund/SBI)
IHIT: Middling duration, year and half to maturity, 4% discount to net assets
2 Likes
Bottoms are not reached when the panicking begins. They are reached when the panicking ends.
5 Likes
…panicky…
So, to your point, the relief rally at the end of March has clearly ended and failed. One “weak” bottom signal happened today, as the # of stocks above their 5D moving average (PAMA5) dropped below 15%, and about 72% of stocks declined for the last 2 days. But a cacophony of “so bad it’s good” metrics has not happened yet.
To georgeconstantine’s point about “Institutional selling is still methodical and more in keeping with a slow grind down.”
2 of the last 5, and 3 of the last 10 days have had more advances than declines
average % of stocks advancing last 10 days is 43% -
Not good, but not capitulation level either.
the failure of the relief rally has only brought the S&P down to solid support, a little above where it bottomed in February.
Every other equity asset class (including the Naz) except Real Estate (REITS) is below its 10m MA and continuing to decline. The S&P has gone Neutral on the SMA slope (BC2) again, aligned with the relief rally collapsing.
Interest rates… interest rates… “the horror, the horror…”
7 Likes
For my part, certain stocks have hit prices I previously considered “fantasy targets” …
The market doesn’t have to care about, or adhere to, my made-up wish list of price targets,
I read some finance guy recently who said he always kept a few GTC lowball buy orders on stocks he liked a lot. Most of the time he didn’t get a fill but every once in a while he got some great deals.
4 Likes
No way would I equate my bottom detector with Mungos but it is also not signaling yet.
My bottom detector uses a VIX momentum oscillator, a TRIN price oscillator, and a price moving average. Two points for the VIX and TRIN indicators crossing a signal line and 1 point for the MA. At a value of 5 there is usually a good signal (not always!). But it is short term signal.
4 Likes
My Short-Intermediate Bottom Detector has fired as of the close Friday. Here are the signals of the past twelve months and their forward returns applied to QLD - 2x the Nasdaq 100.
I show the date of the signal, the low date that follows and the # of market days to hit that low date, as well as the maximum drop within ten market days and the maximum pop within twenty-one (1 Month) and forty-two (2 Months) market days.
With a signal such as this it is just as important to have an exit signal as it is to have an entry signal. Signals like this tend to come when everything in you is screaming to ignore it. The same is true when the exit signal shows up. It seems the market is going to just keep on going up… but it doesn’t! Ever!
**Signal Low Date Mkt Days Max Drop 21-D MP 42-D MP**
5/12/2021 5/19/2021 5 -0.50% 15.59% 64.36%
6/18/2021 6/21/2021 1 -1.22% 13.88% 41.13%
7/16/2021 7/19/2021 1 -3.11% 6.85% 29.51%
8/18/2021 8/19/2021 1 -1.24% 11.56% 26.51%
9/30/2021 10/4/2022 2 -4.18% 16.26% 29.92%
12/1/2021 12/3/2022 2 -4.28% 8.99% 8.99%
1/21/2022 1/24/2022 1 -9.87% 10.48% 10.48%
2/23/2022 2/24/2022 1 -6.70% 18.12% 26.12%
3/7/2022 3/14/2022 5 -4.78% 30.32% 30.32%
4/22/2022
Avg All Dates -6.45% 8.87% 21.76%
Avg All Signals -3.99% 14.67% 29.70%
30 Likes
Elan asked:
The market is starting to feel panicky. I’m wondering if we’re close to a major bottom signal being triggered.
George wrote:
But the initial inquiry was whether a substantial bottom is in the making.
Indeed. I thought my reply inherently answered that. NO! Short-Intermediate, yes! Major bottom? Highly unlikely. There are many reasons why, mostly of a macroeconomic variety, but I won’t bore you with that this morning.
13 Likes
I’m curious to see what Zeelotes’ signal said in March 2020. Does it fire off too soon in a major bottom?
4 Likes
Mr. Gibber asked:
I’m curious to see what Zeelotes’ signal said in March 2020. Does it fire off too soon in a major bottom?
You’ve raised an important question!
My personal perspective is that it is important to have a multitude of indicators that one combines into a consensus score. These consensus scores can be grouped into long-term, intermediate-term and short-term. When, for example early 2020, the long-term score is elevated on the bearish side, it is wise to take one of two courses of action.
- Ignore all intermediate and short-term signals completely. At a sell signal enter inverse / short positions and wait for a long-term bottom signal.
- Enter but dramatically decrease your hold time to one to ten days based on a pre-determined signal that you follow aggressively. When the long-term bottom signal arrives it is ok to enter and hold for a longer period.
So in 2020, for example, my long-term bear consensus score hit twelve on 1/31/2020. From 10/25/2019 until it hit twelve on 1/31/2020 it was fixed on eleven. Anything at eleven or above is worthy of caution by reducing one’s portfolio in the high flyers, more risky investments, and shortening one’s hold on any bullish signals.
With this in mind, here are the signals from the indicator mentioned above.
- 2/25/2020
- 3/9/2020
- 3/12/2020
- 3/16/2020
In a case like this my preference is to simply employ a profit latch for exit. The first signal is ignored because it arrives four days from the peak date of 2/19/2020 - I don’t allow new signals within ten market days. My typical profit latch based on using QLD - 2x the Nasdaq 100 - is 9%.
Symbol Hold # PY Entry Date Exit Date Entry Price Exit Price % G/L % G/L to Date
QLD New 1 4 3/9/2020 3/10/2020 $98.58 $107.45 9.00% 9.00%
QLD Hold 1 4 3/12/2020 3/13/2020 $81.18 $88.49 9.00% 18.81%
QLD Hold 1 4 3/16/2020 3/17/2020 $18.30 $19.94 9.00% 29.50%
I’m highly risk averse, and consequently, in light of the potential for black swan events to occur, my goal is to be invested as little as possible. Methods like I’m outlining in this post enables me to do so while still producing a healthy return.
21 Likes
…and there’s the bounce…
Ges wrote:
…and there’s the bounce…
I’m at a 3.15% gain so far which is one third of the way to the 9%.
2 Likes
My short term bottom indicator signaled today but…we’ll see.
7 Likes
I’ve subscribed to a newsletter since the early 1990’s. It had us go to a sell months ago. I’ve pretty much missed the crashes since the 1990’s. It first started out as telephone switch newsletter because they would call you and tell you to sell. The son bought the business and it has pretty much stayed the same. It’s called Successful Investing and pretty much targets mutual funds. back to lurking…doc
4 Likes
My short term bottom indicator signaled today but…we’ll see.
…but maybe another down leg?
1 Like
Ges wrote:
…but maybe another down leg?
The signal I wrote about in this thread has historically seen a significant buying opportunity within six market days. In other words, when it fires it is best to enter what I call “Dream Prices” for entry, and not just enter at the close or the open the next day.
Since that initial signal many other high confidence signals have also fired. One of my best composite signals has fired the last two market days - 26th and 27th - but the safest route is to see this number drop before entry.
The past is not a perfect predictor of the future, but compared to throwing darts it is absolutely superior.
19 Likes