In the hit movie “Back to the Future“ Michael J Fox had access to a time machine, allowing him to go back and forward in time. So what if we had access to a time machine and we went forward in time, just a mere 30 days….. the election and QE2 will be a month old, what will the world look like? With these two issues settled, will knowing what to do with your monies become crystal clear?
I receive many personal emails from viewers expressing this frustration….”I just don’t get the disconnect between the fundamental news and the market performance!” Dr. John Hussman, who is a terrific mutual fund manager and writes a must read weekly column (see this weeks thoughts) stated this week that “valuations matter…..Though valuations often have little impact on short-term returns over periods of less than a few years!” Could he have also said, elections or QE2 have little impact on long-term market results?
We live in a complex world! I have no idea how the elections will turn out tonight and I have no idea how much fuel the Fed will attempt to throw on the fire with QE2. What I do know is this….regardless of the news, patterns have shown a tendency to create repeating RESULTS for the past couple of hundred years, regardless of elections or stimulus activities.
Many feel today (Elections) and Tomorrow (QE2) will greatly impact the direction of the economy. I don’t know what the results will be or how the world will react to the results! I do know this…..Today, a month or 10-years from now, I will remain focused on “Patterns and Price action” and how these tools can help us “inflate our portfolios, regardless of (the news) or market direction!”
At this point in time, many of the major markets are facing resistance right now! Resistance is resistance until broken. IF resistance is taken out, I will follow! If you must own this market, I would do it via the “High Yield mutual” funds I have discussed on numerous times.
Same. Would gladly sign up as well. I hope the subscription price is within reasonable range. Appreciate all your hard work again Chris! Certainly one of my top go-to reads in the morning.
Your site is a wonderful trough of insight, humor, education and investment suggestions that I value and enjoy immensely. You have shared generously with us all for the last six months your methodology and approach. Any one following it over this time frame will recognize it’s worth, and likely, has profited from it as well. In my opinion I think it’s time to establish some sort of proprietary chamber around your work where your rigorous efforts are rewarded accordingly and the information is not pranced around the internet as just another field to glean. Those that follow your suggestions will also be rewarded by your thoughtful attention and unique perspective on the markets. Unfortunately I think many of us have become far too accustomed to free information on the Internet. However, at some point, with too wide of dissemination, it’s no longer information, it’s just free. In my humble, I think it’s time. Where do I sign up?!
Per the high yields. In several posts I have suggested to own high yields…”High yield mutual funds” that is.
A week ago when I mentioned that I preferred the funds over the etf’s. Numerous emails ask why the funds…it is a simple as this..the etf’s get pushed around by volume, the funds are not subject to this issue.
I like a smoother ride, more accurate price and the funds give that to you over the etf’s. The “6 pack of high yields” I have posted a dozen times, are always of high yield funds.
That’s the way I took it! You give us so many good ideas I had forgotten about renting the high yields.
I need to make a Chris Kimble wall in my office so I can “see” these ideas instead of them getting lost in the blog!
This is going to be a paid site?? re: T1 post plz say it isnt so im nowhere near to breaking even
I don’t look at high yiels as equals to cash and I suspect it came across that way…my bad.
When price action is quality like it is in this area, being the high yield “mutual funds” I am willing to exchange the cash for this with stops!
I am “renting” the high yields, not buy, holding and hoping! As has been shared before, “hope isn’t a strategy!”
Thanks for clarifying Chris! Sorry to get others going on this too. I was just looking for your thoughts and they were helpful. Didn’t mean for you to be a money manager today!
I must say though, it is interesting how you consider High Yields as your cash position 🙂
Full announcement will be posted on the blog. I will be making this post in the next couple of weeks.
Blog will continue, most frequent and up to date info will be inside of the members section.
Thank you for asking.
Will you be providing subscription information about your new site? Thanks.
As I shared in the prior post, I let Silver gains run to 20%.
High yields right now are at HIGHS FOR THE YEAR…no resistance at hand, I will let them run until a couple of things happen, per they break key moving averages or support.
These boring mutual funds are doing well…if the broad markets can break resistance, my plans are to move assets out of the high yields and into equities that are breaking out.
If the Dollar breaks support…boy could things get fun to the upside.
As I read his explanation, at 10% positive he would harvest “some” or “likely all” … in other words, it’s a judgment call based on a read of conditions once 10% has been achieved.
Second, his strategy clearly is to hit a lot of singles rather than hope/pray for home runs.
Bottom line, the answer to your query is a function of one’s own comfort level and ability to sleep well at night. Speaking for myself, I spend as much time trying to understand and manage my downside risks as I do looking for upside opportunities, so the “singles” approach fits my comfort level.
Mark first off…EUM was on the “radar screen” NEVER made a POST to purchase. SMN was for AGGRESSIVE players only.
As you are well aware Mark I have harvested a ton of positions up here, yet NOT MADE an all out call to SHORT at all…way, way too many positive snow flakes still taking place!
These are “suggestions” not making or telling anyone what to do. The high yields are my equals to cash positions right now! Solid, solid price action in every way…above resistance and ALL key moving average lines, above the 50/100/200 and am getting paid a handsome dividend while waiting for some of these patterns to resolve themselves.
dkyro…in todays charts all these major markets are up against fibonacci/resistance as you mentioned. Resistance is a top (trade the range) for the time being. Breakouts take place, is it possible the market goes up another 20%? Anything could happen!!!
The Tops and Bottoms(turning points) is where the fun really begins, when breakouts/breakdowns take place. I love that the market is up against resistance and boring the heck out of people. The less people that are NOT on board, due to being ticked off, the better at these levels!
KY… I shared that OFTEN, yet NOT all of the time, harvesting takes place around 10%. Often resistance of some form can come into place after a 10% move. Silver I took “pocket change” gains at 21%, due to resistance. Did I break a rule? I just let it run to a resistance point.
I was ask for some general rules and that is what I shared. My suggestions on dshort and this blog, when added up are into triple digit gains since the first of March. On some of the “pocket change” gains, should I have held some of them longer to make even more? FOR SURE! I am fine taking a gain if I can move monies to what looks like a better opportunity.
I harvested Chile and Homebuilders at 10% (see blog archives under pocket change)…both have been flat after harvesting.
As I shared I look to hit singles and even though this year the 500 index is up around 7% or so, I hope that the trades added up being into triple digit gains isn’t too much of a let down.
Oops, 1st part got cut off – trying again (with full comment)
Just to clarify your 10/10/10: Right now you have at least five suggested positions: short Treasuries (TBF), short basic metals (SMN), long grains (DBA), high-yield bonds (HYG, JNK), US dollar (UUP), short emerging markets (EUM). o you recommend a 10% position in each of these (with 5% in double-short SMN)? That’s 55% total (in a diverse collection, true, but TBF, SMN, EUM and UUP probably all move together). Or are you recommending 10% split among the suggested 5 or 6 options?
Also – not to be nosy, but what do you recommend for the remaining 45% (or 90%)? Given the odds that stocks and bonds are both likely to fall… is the rest all in cash?
Obviously everyone makes their own decisions about how much and how risky… but seeing your 10/10/10 always makes me wonder how you handle the remaining 90%, especially when routine long-term holdings (broad stocks an bonds) may be running against your current-pattern-based recommendations.
ons: short Treasuries (TBF), short basic metals (SMN), long grains (DBA), high-yield bonds (HYG, JNK), US dollar (UUP), short emerging markets (EUM). Do you recommend a 10% position in each of these (with 5% in double-short SMN)? That’s 55% total (in a diverse collection, true, but TBF, SMN, EUM and UUP probably all move together).Or are you recommending 10% split among the suggested 5 or 6 options?
Also – not to be nosy, but what do you recommend for the remaining 45% (or 90%)? Given the odds that stocks and bonds are both likely to fall… is the rest all in cash? (That’s a lot of cash.)
Obviously everyone makes their own decisions about how much and how risky… but seeing your 10/10/10 always makes me wonder how you handle the remaining 90%, especially when routine long-term holdings (broad stocks an bonds) may be running against your current-pattern-based reccomendations.
I don’t understand harvesting when position is up 10%.
That doesn’t seem consistent with your harvesting at resistance/TB&M approach.
Isn’t better to let the position ride until it hits resistance, rather than an arbitrary gain of 10%?
Yes Chris, that makes sense.
So are we at a Top or Middle? I’m assuming it is a top based on the Fib level. If it is a “T”, where is a “no middle’s” area looking at the DOW chart? I feel like we are in a “no M’s” area given the waiting game we are experiencing now.
Chris…so far the dollar remains above a rising support line…series of higher lows dating back to the lows in March of 2008, 12/09 and last month.
Dollar continues to test this rising support line.
Notice the dollar action this morning. Second bottom about to be set before rebounding?
I use a 10/10/10 plan.
I take at least a 10% position…
Then when the position is up 10% I harvest at least part of the position, more often than not all of it…
Do this at least 10 times a year and you have some decent Pocket change.
This help? I believe that you need enough exposure in position to make a difference, yet not too much that it can really put a dent in the portfolio if you don’t control the loss.
As I have shared many times, I believe in hitting singles. I know I will be wrong at least a third of the time…to me it is ok to be wrong, not ok to stay wrong! I don’t care for leverage, it is not needed! Take the example of TBF (1x inverse bond etf) compared to TBT (2x inverse bond etf), I prefer TBF! If someone is using TBT, not wrong in my book, I just prefer the 1x when available!
We all have comfort zones…hitting singles and controlling losses is a decent formula, that I am comfortable/can live with!
Something else I am comfortable with….Being cautious at resistance and harvesting (waiting to see if a breakout takes place) THIS IDEA (harvesting at resistance) DOES NOT MEAN I AM BEARISH or INVERSE POSITIONS HAVE TO BE TAKEN!!!
Missing out on a rally only means some “OPPORTUNITY was lost, not money lost!” Being short and the market rallies means “YOU LOST MONEY!!!”
Chris, How do you determine what percent of capital to expose at any given point in time? Also, is there a maximum number of positions you will hold at any time?
Assuming this market is an “T”, do you limit your positions to “X” number or capital to “X” percent?
Interesting to note that the highest monthly closing price in 2000 (ie the left shoulder) I believe is 11,215 on the Dow – right where we are now.
thanks Chris, I assume there is a similar resistance at hand for the Nasdaq?
A good Canadian boy in that Movie!