herewegoagain said:

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Growth Stocks, Value, or all of the above?

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All of the above.

The macro signal alert level is currently moved to between caution/yellow and green. Need to have a close above resistance and holding up above that tomorrow for considering a full green.

Not going to direct this to any one poster but a CAUTION was placed on the board at DOW 18500 on a day that ended at 18479.

401k's exiting there who saw the bull signal post yesterday and decided to re-enter a portion of their 401k at close would have re-entered 89 points higher than they exited. EIGHY NINE points in a period of high uncertainty where I openly said the reason for caution is I don't know which way it breaks.

Today it's 200 points from exit and if we hold above former resistance highs into tomorrows first hour then that resistance actually becomes support. So we're talking about less than 100 to a couple of 100 points of safety during uncertainty. Uncertainty, by its definition, means I don't know.

We're not looking for praise around here; we're looking at capital preservation and monetization strategies.

oldarmy,

How aggressive would you have a 401(k)? Would you have a greater % of funds in stocks, or more in a stable type market?

williet09 said:

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oldarmy,

How aggressive would you have a 401(k)? Would you have a greater % of funds in stocks, or more in a stable type market?

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Right now the markets have not hit new highs. While this recent move has looked great the fact is we are still below all time highs and therefore technically a macro sideways pattern. I would not be aggressive at all right now. 25% into funds with heavy holdings/weighted into those sectors I mentioned will hold up better should this move of euphoria wear off and fail.

Long term outlook in these primaries sectors should outperform. I wouldn't be in any rush to jump in considering all of the current action actually proves nothing at this point.

oldarmy1 said:

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Not going to direct this to any one poster but a CAUTION was placed on the board at DOW 15500 on a day that ended at 14479.

401k's exiting there who saw the bull signal post yesterday and decided to re-enter a portion of their 401k at close would have re-entered 89 points higher than they exited. EIGHY NINE points in a period of high uncertainty where I openly said the reason for caution is I don't know which way it breaks.

Today it's 200 points from exit and if we hold above former resistance highs into tomorrows first hour then that resistance actually becomes support. So we're talking about less than 100 to a couple of 100 points of safety during uncertainty. Uncertainty, by its definition, means I don't know.

We're not looking for praise around here; we're looking at capital preservation and monetization strategies.

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Are you sure about your DOW numbers?

The reason I ask is that the DOW is now sitting at 18,714.

2 hours sleep DOES have an impact. Will adjust those and thanks!

18500 ended 18479 on Sept. 8th.

So if we still have a large portion in cash, are we still in a wait and see mode? I pulled out about 70% of my positions a couple of months ago. Put about 20% back in the day after the election on the bounce after the initial fall in the markets. Wondering if I should cost average back in or are we still thinking there is a big correction coming?

***Note: I'm not OldArmy***

I think the reaction to raising rates in December (if it happens) will be telling. In theory, higher rates points to a stronger economy. If we can absorb higher rates without a major correction then we should be solidly in another bull market leg.

Closed over 19k and 2200.

claym711 said:

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Closed over 19k and 2200.

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Like a magnet.

Shiller CAPE10 is now over 27. Looking at the chart makes me very nervous about valuations, we are at pre-crash 2007 levels and the only years the CAPE10 was much higher were 1929 and 2000.

www.multpl.com/shiller-pe/

wessimo said:

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Shiller CAPE10 is now over 27. Looking at the chart makes me very nervous about valuations, we are at pre-crash 2007 levels and the only years the CAPE10 was much higher were 1929 and 2000.

www.multpl.com/shiller-pe/

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The yield curve is a better crash predictor than the Shiller PE, and the yield curve is currently very steep. Once it flattens out or slopes downward, then we'll have a problem.

Steep is relative. It's definitely not flat.

Not sure if this is the best place to ask this question but wondering if anyone wants to give their opinion.

My mom just gave us $5000 for our daughters 1st birthday to put in her 529 account. Her 529 is set up through Utah and I have it under the Age Based Domestic Aggressive investment plan which means right now 100% of contributions are going into VITPX.

The current balance of the account is only $1200, fwiw. Would y'all sit on the $5K to see what happens and if there is a better buying opportunity or just go ahead and put it in her account right now seeing that we have 17+ years until college.

A young person with such a long time horizon should always remember:

"It's time in the market, not market timing that's most important". I have my daughters and grandchildren fully invested if that helps.

pfo said:

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A young person with such a long time horizon should always remember:

"It's time in the market, not market timing that's most important". I have my daughters and grandchildren fully invested if that helps.

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Agreed. Until/unless they have reached an age where learning how to apply multiple strategies to increase their accumulation of wealth get it in and diversify as it grows.

Thanks guys. I just wasn't sure with talks of the fed raising interest rates soon how that may impact the market & if it would be wise to wait and see.

Wife is an Aggie said:

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Thanks guys. I just wasn't sure with talks of the fed raising interest rates soon how that may impact the market & if it would be wise to wait and see.

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I'm wondering this as well. Don't think anyone has any idea.

Is the traffic light still yellow/red?

Huge macro market call noticed here. After Trump won all my stock accounts are up about 5%! The trend is your friend.

You're welcome.

How much lead time does a flat yield curve provide?

I guess I always assumed that in some ways that by the time the yield curve is flat, there are many other signs and the flight to quality has already started.

Are you worried about a short term move or a longer term?

If the FED raises interest rates and the market tanks, they will stop raising and start lowering (e.g., dot com crash). The FED may take steps to slow growth, but if things start tanking, they will worry more about deflation than inflation.

AgBank said:

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How much lead time does a flat yield curve provide?

I guess I always assumed that in some ways that by the time the yield curve is flat, there are many other signs and the flight to quality has already started.

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I'm sure there are others along the way. I'm not sure the CAPE is one of them.

I recently read where each 1% drop in US corporate tax rates increases US companies profits an average of 1.26/sh. So with 2017 S&P earnings projected at $120, a drop in the corporate tax rate to 15% would drop effective corporate tax rates from a 29% average to something equal to or less than 15%. That would move 2017 S&P earnings up close to $140 vs $120.

Now that's meaningful and I believe that's the number one reason stocks are driving higher today. The second reason is Trump is pro business and is going to get rid of Obama's job killing regulations.

Southside AG said:

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Is the traffic light still yellow/red?

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I'm wondering the same thing... It was yellow/red on 11/10/2016. Has this assessment changed any in the past month?

oldarmy1 said:

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The bull signal early in trading yesterday played out technically pure. Based on current futures we would open in record territory and unless a reversal were to occur today a return to a bull market move upward is coming. It is looking like AMZN is going to break the gap trend as long as the markets do not reverse off a strong open. SHOULD THAT AMZN gap get filled then, just as it was creating caution, it would complete a full on bull market signal. Entry into the markets would be less critical than going ahead and putting your capital back to work. Remember that we've had 2 years of sideways movement and this would be a breakout of that pattern, something not to be ignored.

This election has everyone and everything turned on its ears. The fact that we have a fully Republican lead government is historical in its own right, considering the political climate. The markets are clearly showing that they are betting own Trump, and who wouldn't given the impossible?

As the world and investors digest what just happened there are some keys to fundamentals based on a Trump lead country.

1) Has anyone mentioned the incoming President is a construction guy, who has listed building infrastructure as one of his prime tenants? Well you can post your best funds available in your 401k's that are heavy in U.S. companies that serve this area. This would be my 100% best and heaviest placement of your long-term investment monies. Individual stocks like Caterpillar are no-brainers and part of my largest call options yesterday. Take a look at the volume in that one stock yesterday to get an idea of big money's thinking/agreement. Another thing about CAT is the $100 mark it has not broken. Like a magnet it will be drawn to that and then flash above it (something for the trading thread short term). Notice also that it just broke over it's previous resistance highs. DE is another stock in the magic 90's. Deere will run like one. EDIT TO ADD: Beyond the other sectors listed the other obvious I forgot to list would be those supporting defense, with military build up.

2) Capital Gains and Corporate Taxes: Another promise Trump made was to reduce the capital gains and corporate tax. WOOHOO! That sounded good but now it sounds great, because he has a full government control to make it a reality. Trickle down economics is going to be a flood once this is passed. Businesses sitting on billions will unleash the hounds.

3) $2.5 trillion. TWO POINT FIVE TRILLION could be a magic number. Trump's stated negotiation with U.S. companies with overseas accounts parked with this amount, to avoid U.S. taxes will be fascinating to watch. IF he manages to pull off a repatriation of those dollars then he'd go down as the most successful fiscal policy President in history IMO. His idea of inner city redevelopment attached to tax incentives and a reduced tax on any of these dollars coming back into the country would fuel topic #1 above even further.

There is a current reality in economic growth and Trump isn't even in office yet so the enthusiasm in all of the above is taking the markets higher. Those huge "ship" fund managers take weeks to get positioned, so dip buying opportunities as we continue to have a mix of bad data and anticipatory/forward looking optimism will allow for entry.

If you believe that a CEO President, hellbent on rebuilding the country's infrastrure (CAUSE), will put people back to work (EFFECT) then increase/take positions in the sectors listed yesterday and today. Then look for entry opportunities certainly to come. The FED is certain to raise interest rates at their next meeting. This should provide another entry opportunity.

My take? BET ON TRUMP

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CC @ anyone wondering about the traffic light signal.

It was at yellow between (red) sell to (yellow) caution into the election based on a Hillary win being hailed as a certainty. Then quickly moved from there to between caution and green with placing some 401k money back to work close to same levels as when the period of uncertainty occurred. I wouldn't be moving to 100% invested until we get the next sell off, which will happen. Honeymoon's are awesome things.

Holy crap this market is moving

Pulled back some Friday. JMO, but seems like a growing probability the honeymoon has been too sweet. Feels like a solid correction coming.

Where's the top?

You want to see a flare out short squeeze temporary top forming? Look no further than the last 7 days. We had a natural move signaled back to the Darvis Box breakout post. That represents the first half of the move. The classic stair step of a squeeze plainly seen.

Then note the sideways action on similar volume due to resistance increasing. You get 2 days of increasing volume as short sellers begin piling on and finally BOOM! The volume has flooded into the markets the last 5 days.

That volume is not sustainable and once it subsides the initial drop back will lose most, if not all, of these major volume squeeze days searching for support. The obvious point of it ending is after hitting the 20k mark, but with the Fed tomorrow a red opening is likely making it difficult to breach short term. A consolidation move here would be much healthier than an otherwise meaningless psychological push above 20k creating even more exhaustion and a likely longer consolidation period.

At any rate - the multi-day volume bars on the DOW are incredible.

Hm, where did you pull that dow chart? That daily volume does not show up on /YM or /ES, or TVOL, or S&P, or the Dow chart I use...