Today opens day number thirty three in the selling stampede. By defination it takes three consecutive closing up days for a stampede to be declared over. Thus far, there have been a couple of times that the markets made a two count but just could not finish up for the third up day count. Today is a possible third up day ... and, things are looking as though we might get the three count today.
The S&P 500 Index is down year-to-date -7.3% and off its fifty two week high by -11.2%. With this, we are still in correction territory. In checking some major global markets Greater Europe is up and Greater Asia closed mixed with China & India up while Japan, Hong Kong and Australia were down.
My portfolio has performed well during this downdraft as it has a defensive posture being heavy is utilities, consumer defensive and the communications sectors while also carrying a sizeable allocation to cash (about 25%). Year-to-date it is down about -3.3% while the Lipper Balanced Index is down about -4.3%. During this downdraft I have added to a couple of good dividend paying equity funds (DEQAX & FDSAX) which has helped me maintain my target allocation to equities. I have now moved one of my buy and hold funds (VADAX) found in my large/mid cap sleeve to the ballast/spiff sleeve. When its time to rebalance the portfolio, trimming equities, VADAX will be the fund trimmed/sold/or nav exchanged into a bond fund within it's fund family.
Is today the day that the stampede is declared to be over? Remember, it is said, by some, to take two to three times as long for the markets to recover as the stampede lasted. I am looking for recovery coming during the next three months (March, April & May). Then comes summer where the markets trend to go soft followed by fall where the markets have a history to rally and trend upward. I am looking for more buying opportunities to come during the year possible during the summer / early fall months. Since my portfolio kicks off a decent income stream I'll be looking to spend some of it during these anticipated pullbacks becoming a select buyer in equities.
I am still with my thoughts (based upon earnings projections) that we will see a new fifty two week high for the S&P 500 Index by yearend.
Comments
Thanks for making comment.
I agree with your comment about oil's comeback. But, I think it goes beyond just oil as earnings are projected to continue to improve as we move through the year. Oil may trigger the rebound but I am thinking improving earnings will provide the fuel needed to maintain the stock market rally / recovery.
Something has to be a trigger for rallys, rebounds and retractments.
Regards,
Ted
Regards,
Ted
https://www.bespokepremium.com/wp-content/uploads/2016/02/si.png
Thanks for stopping by and making comment.
With oil's rebound and with some investors finding themselves having to cover their short positions could be contributing to this rally which I am hopeful will find some legs, with improving earnings, as we move through the year. Naturally, I expect some turbulance along the way. I am also thinking we will see a new fifty two week high, by year end, for the S&P 500 Index.
Some would used the FED as what is influencing the market.
Election years look positive for stocks
http://www.seasonalcharts.com/zyklen_wahl_dowjones_election.html
We'll find out soon if this uptrend continues.
Regards,
Ted