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The majority of the blog viewers manage portfolios, whether it is institutional pools of money, financial professionals or individuals, all have to make critical decisions. Regardless of the type of portfolio you manage, one should consider the situation in the chart above, per over and under weighting positions.
The spread between stocks and bonds is very large right now. In the past this spread suggested that investors overweight towards bonds and underweight towards stocks. Will it be different this time around?
Only problem with the bond and the stocks is that we did not previously have Bernanke flooding the market with our stolen future dollars.
Gary…I suggested to buy them today. I actually bought the NDX/QQQQ premarket Monday morning.
Mark…. Keep in mind the overweight/underweight, didn’t say to sell stocks. Yes I have favored the Russell and it did great on a relative strength basis. I now am leaning towards relative strength in the NDX 100. The 500 index can have its pattern challenges at the time, yet I am not going to let that stop me, per “attempting” to find winning places for us to invest. The Russell broke out, it was followed, regardless of the 500 index. Copper broke out, it was followed for a very nice and quick gain.
Now we will see per the NDX and Semiconductor index. In the past the Semi index has been a good indicator for the stock market. Is the upside breakout good news on that front? Time will tell. Keep in mind it would take how much of gain for a 500 index upside pattern breakout? only about 4% would do it, which we both know isn’t that big of a deal. So far, not many negative snowflakes are falling this time. Is a negative blizzard about to happen? it could, but before that happens, more breakdowns need to take place.
Commodities due to the patterns and some breakdowns would have me most concerned right now if long.
Very big and convincing patterns! It looks like a good time to move away from stocks and towards bonds!
Some questions, though:
Are you recommending to harvest small caps/Russell 2000? The last I remember you recommended to buy this (and it’s gained 5% at least). Is it up against resistance, or would a drop in S&P take small caps with it?
Also, the NASDAQ pattern says buy, despite the worrisome S&P?
Thanks-
Hi Chris,
Does this mean to hold off on the QQQQ and XSD trades?