About Me

Retired chief investment officer and former NYSE firm partner with 40 years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Wednesday, October 12, 2005

Stock Market -- Technical

S&P 500: 1177

My primary technical indicator gave me a sell signal on 8/16 with
the S&P 500 above 1230. I paid it no mind because I could see the
market in a compression zone. I got a short term buy signal on
9/6 with the "500" at about 1215 and ignored it as well for the
same reason. I then got another sell signal on 10/4 at 1214 on
the index. This one is more worth notice, because it heralded
a break down from the compression zone and raised the question
of whether a more substantial decline might lie ahead,
with the prospect of the "500" falling to about 1075.

For fundamental reasons I have been playing only with pocket
change since March, 2005, so I am not at risk on the long
side. Moreover, we have moved into respectable oversold
territory, so I am not contemplating a short position.

I have not yet given up on the idea we remain in a cyclical
bull market, which makes me doubly loathe to short this baby.
So, I am going to see how resolution of the oversold
develops before taking action, although my sense is the
time to trade has drawn nigh. Frankly, I also remember my
days on Wall St. where we had a amusing rule: Sell on Rosh
Hashanhah (10/4 this year) and buy on Yom Kippur (tomorrow
10/13). It's a fun contrarian rule if you know the holidays
and not a bad one at that. So, I'll wait to see what the
next few days bring.

1 comment:

tony said...

Hi Peter,

Since March you have made the right decsion. This marlet hasn't gone very far either way.

However, I feel the markets made an important low on thursday, maybe a significant one. Monday or tuesday's action will tell for sure. An intraday print of about 2099 in the NAZ and 1195 in the S&Ps will confirm. Have a great week! And, keep up the good work ... Tony

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