Half way throught the month of June and nothing spectacular has happened, meaning no drama. Summertime is always and iffy time of year in that the drama that comes with it will cause your hair to fall out. Just be careful with knee jerk moves based on TV news, Internet news, and or your peers. Try your best to filter out that noise and stay mechanical with charts. If the news is real and it’s a long term event, we will take a short term hit using monthly moves, but we get out using the long term signals. All you have to do is look at 2000 and 2008 and you will see the monthly move magic.
For all me readers that have never read this post, please click and spread the word. This is why I preach to baby sit your money at least once a month and forget the buy and hold stuff.
Buy and Hold – What is your opinion?
The consolidation of the S&P 500 from last week continued again this week. The only thing that changed here and should be watched is the DMI appears to be turning negative. We watch these little signals, not to make long term decisions, but to give us a heads up that things could be changing. Seeing that the volatility is so low, I do not see any major drama coming that will cause a pull back in prices.
I was a little dissappointed to see the Small Cap pull back this week after breaking out last week. The Small Cap had been grinding for over a month and was due a break out. We did get a new all time high, but price pulled back immediately. The last pivot low is the new CBL line that you see drawn above and we need price to stay above that line in order for structure to remain intact. Prices need to rise next week to keep this very new and short term uptrend to work. Failure means one of two things, more grind or lower prices.
The International had a very mixed week in that price bounced up like it was time to reverse higher and then fell hard on Thursday. Friday we got a little recovery and pretty much ended even for the entire week. The CBL on Thursday threaten to fire a sell warning. After this weeks action, it appears that a bull flag has formed. Remember we normally breakout higher when these flags form, so fingers crossed. Everything else on this chart is positive.
I know a lot people always hesitate to put money into Bonds, but bonds saved my week. Without following my monthly moves and staying with a C,S, and I setup instead of a C,S,I, and F setup, I would have had a .24% loss for the week instead of a .01% gain. I’ll take it. Bonds stayed on track with it’s slow grind higher. DMI and volatility are positive.
Conclusion: Not expecting much more of a gain for June. I hope that the 1.15% gain that I have now for the month will hold. I totally expect a grind sideways at the least and a pullback of 3-5% would not surprise me. It is summer and I’ve seen it happen many times. The other major reason is that we are due a pullback. I’ve been invested in the Cand S for over a year without an exit which means this long term run is due a pullback. If you have followed and participated in this long run, then a pullback will not hurt. If you are just getting started in this long term run, you are more at risk. Either way, this is just information. No one person can ever predict to the future. Run with the trend and filter out the news.
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