In our last market update, we indicated that we got breadth thrust and will get BUY signal. We can confirm this using our BPNYA indicator as shown below. From above BPNYA chart, we can clearly see that BPNYA index crossed EMA(30) which is our BUY signal. The dotted line is a possible scenario and route BPNYA index might take in next few days.
On what basis we think this might be a possible scenario? Well, Fridays job report was certainly not appreciated by the market and hence the decline. From next week, earnings season is starting which shall provide a better guidance in terms of market direction. Usually, earnings season is known to be volatile, which means market can be up 1 day and down next day. Also from past 6-8 earnings season, market have been able to post a nice rally going into earnings season followed by a decline after 3rd-4th week from the start of the earnings season. Do we need to keep track of all this! Not necessarily as our history teacher will guide us accordingly. At this point, market may decide to take a breather and might take a day or 2 or may be few more days to continue the rally again which means our BPNYA Index might follow the path shown above. If that happens then it will provide us a good entry point for our investment options. For some reason if you are not yet invested in your 401K/IRA accounts then this might be your chance to get back in the upcoming rally. What does it mean for our Long Term Funds!!! 401K/HSA/College Fund: We get the BUY signal last week, and Fridays market pullback will provide us an opportunity to get back in the game. We enter the highest ranked Mutual Fund available to us. You can find the highest ranked Mutual Fund by using the spreadsheet available here. Traditional IRA/Roth IRA: Based on our "Advanced Strategies" section we should be using our BULL market ETF list now that we have the BUY signal and invest in the highest ranked ETF.
andre
7/11/2011 10:24:14 am
can you explain why you use the ema30? Pradeep from stockbee uses the 10. Just curious how one goes about deciding what ma or ema to use??
Admin
7/11/2011 11:34:20 am
Very good question...
andre
7/14/2011 12:28:10 pm
Tough market to deal with. Looking at your signals you had a buy signal on March 31 then a sell only a few weeks later on April 18th for a small loss. Another buy signal on April 21 then a sell May 4th for a small gain. Now a buy on July 5th that is so far down 2%. My concern with this system is that we are going to get by transaction costs. Furthermore in my 401 I would not have been able to sell my fund on the April 18th signal then buy back in to the fund on April 21st. It goes against the rules of the 401k. Just want to get you take on these whipsaws and how you deal with them.
Admin
7/14/2011 01:01:24 pm
Andre: You are making mistake. Please read our analysis about market entry/exit again. Comments are closed.
|
Details
What is NYUD?
What is BPNYA?Archives
January 2020
Categories
All
|