Aggressive Moves … To Cash?
Jan.18, 2008 in
Specific Discussion of Trading Systems
The Aggressive system has moved to 40% cash. In a fairly rare turn of events, one of the two screens not only failed to find a full slate of qualifiers, it only found TWO. [read more … ]
January 19th, 2008 at 7:47 am
That is rather interesting. I yanked about 60% out of the markets last year but that was just a “feels about right” number to me.
It is interesting to watch this massive asset unraveling and I suspect it could get as lot worse. Bush’s “save the economy” plan was rather tepid and stupid IMHO. The consumer is flat tapped out after spending their HELOCs, what’s $1600 per married couple gonna do?
January 19th, 2008 at 8:09 am
It’s even more interesting because it hasn’t happened to that degree before. Generally in backtest the systems have been close to fully invested. I’ll just track the system’s suggestions and see how it does …
I think the turmoil is more “market” and much less “economy.” I also think Bush is a stupid, pandering demagogue, and that the actions recently proposed are about as useful and effective as the TSA screening process, and in the same areas (psychology of the dumb masses vs. actual, logical, and practical impacts).
Send me a frickin’ check, I’ll throw it into my system trading account.
January 19th, 2008 at 8:40 am
Right now yes the turmoil is all in the market but I think its the perception of the economy that can prolong or shorten this mess.
My personal opinion is that investors are waking up and realizing that the majority of the gains from the 2003 bottom have all be built on Greenspan’s liquidity glut. That’s a lot of air that needs to come out of stock prices and everything is driven by pyschology right now.
I think we’re fast approaching an interim bottom, whether or not it stays there I don’t know, but I’m starting to make my stock/asset shopping list.
January 19th, 2008 at 8:50 am
Key phrase IMO: “the perception of the economy” emphasis “perception”
January 19th, 2008 at 6:40 pm
May I ask what your “perception” of the market is?
January 19th, 2008 at 7:03 pm
On the one hand, I think the market is discounting events as being far worse than they are, or will be. Technically we are very much oversold on a variety of breadth measurements, all of which are at levels suggestive of long-term, or at the very least, intermediate-term, bottoms.
On the other hand, the EZ Trend is bearish, and the options-based fear measurement is nowhere near high enough to trigger a buy signal. Precisely because the market is pricing in a pretty piss-poor economic scenario, if the Fed responds moderately - which they will if they view the economic data the same way I do, no guarantees of that point - the market will shit the shower in response.
My Timing model portfolio is now 25% SPY and 25% IEF with 50% cash. It would take a spike in fear, or a prolonged resumption of the uptrend, to move that. If I were just trying to time the U.S. market by “calling a bottom,” and I were trading based on that system, I think Friday’s high-volume rickshaw man pattern might have been a “relatively low-fear” capitulation bottom, based on the breadth charts I keep here, and I’d be tempted to countermand the model and start buying early.
As it stands, I’m trading another system and I’ll keep any deviations from it in context to that system, i.e., “minor tweaks.”
March 17th, 2008 at 6:06 pm
[…] January 19th: Technically we are very much oversold on a variety of breadth measurements, all of which are at levels suggestive of long-term, or at the very least, intermediate-term, bottoms. […]