Finally, we’re out of the bear market – but the euphoria was short lived. Things aren’t going swimmingly (groan). This week hasn’t been easy.
First of all – an apology – this is going to be a short post just going over the charts and I will update with more detail in a couple of days. As you know I am travelling, and its not always easy to get the time and the connection I need. I am going out to dinner with friends shortly so doing this directly on the website, so there will probably be a few rough edges! So let’s get down to it.
UPDATE 2 DAYS LATER: Now in Scotland and have a decent internet connection. So updating the blog below. Will preface the update bits with the word UPDATE:
Last blog post we were sitting right on the bear exit, with a doji candle, wondering if we were going to break out. And we did – quite dramatically. Four lovely up days! It definitely made a pleasant change. BUT – all good things have to come to an end etc etc, and on Friday we had triple witching. As I expected, the market dropped, not hugely but formed a dark cloud cover candlestick pattern. So last weekend I was not terribly upset, in fact I was quite philosophical.
But – this week has been dismal. After the holiday Monday it has been very disappointing.
I don’t usually publish my predictions as it is a sure way of looking foolish because somehow the market knows and punishes you (OK, only joking) but I have been expecting that it will drop back to the bear threshold and test it. No reason, just from observation that that is what seems to have happened in the past.
If that does happen then we have some more pain to come but not an enormous amount – only 0.8%. But it will still hurt.
UPDATE 2 DAYS LATER: Well, yesterday was nasty, today has been very good. How did my prediction go? OK, close but not spectacular. SPY continued down towards the bear exit of $429.80 but stopped at $431.44, then rebounded. So it came within 0.373% of my prediction – but that’s not good enough for me to think I am good at this. It should have been exact. But you get the general idea.
As I am writing this the market has just closed. There has been a strong rebound of 1.21% to $435.53. Will this hold? I don’t know, but I suspect that it will – anyway, fingers crossed.
The SPYG chart is following the same pattern as SPY. If it drops to the bear exit then it has a longer way to go – 1.4%.
UPDATE: same as for SPY – droped towards the bear exit and rebounded strongly. Fingers crossed that it keeps going.
The QQQ chart (the Nasdaq ETF) is quite different. As I’ve pointed out before, it dropped a lot more than SPY (33% to 20%, from memory, may not be right but close) and so its recovery was more abrupt. It climbed out of bear territory some months ago.
However, it still has followed the same pattern as SPY and SPYG for the last 2 weeks, just not quite so marked.
UPDATE: A spectacular rebound today of 1.76% (after a dismal drop yesterday). With QQQ there isn’t a significant level for it to drop to (it’s well above the bear exit) so no predictions excpet that it looks more bullish than bearish to me.
Going out on a limb here!
UPDATE: well, yesterday I was feeling a bit like this:
But today I feel a bit more like this:
Just note that it is a very little branch!
The SMUG Index
I’ve mentioned my ‘SMUG Index’ before – well, it was in full force last Thursday the 15th June. I was aware of it what it was warning me, and I was aware of the danger of triple witching the next day – but did I do anything sensible like get out of my ATM / OTM positions?
And regretting it, obviously.
But now I have to go, will complete this in a day or so. Travelling to Scotland, then I will update this. and add extra information. Just wanted it to be available before market open.
Fingers crossed for a bounce this week.
UPDATE: After kicking myself for the better part of a week (always an uncomfortable waste of time) I am hoping all will be well. As I have mentioned on the books and in this blog, I play with ATM and OTM options, but with less than 10% of my total portfolio. So if things go south it will hurt but I wont be wiped out. BUT – I should really pay attention to my SMUG index. It is uncanny how accurate it is – and also how strange that I usually dismiss it (‘this time its different’ – heard that before?)
Tom Hougaard is back – but I am afraid I haven’t been. I’ve been too busy travelling and cramming everything in! I have checked his results from time to time, and it doesn’t look like I / we have missed out on a wonderful winning streak – but I haven’t been checking properly. Mea culpa. I will try to do better.
And today I have just arrived in Scotland. Staying at a lovely place called Cornhill Castle. Very Victorian, and lovely views. Last time I was here there was lovely weather:
This time not so great:
Yes, Tinto (the hill) is behind the clouds. Let’s hope tomorrow I wake up to a beautiful view. (and if you want to see more travel photos here’s a link to FB: Heather Cullen )
UPDATE: Let’s hope today’s bounce is the end of the pain. I don’t think that there are many announcements / figures for the rest of the week. I hope not! Just want some stability and to catch my breath!