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Old_Skeet's Market Barometer ... November, 2019

edited November 11 in Fund Discussions
I had to start a new thread as the other thread ran out of available character space.

Being a retail investor and student of the market I like to share my thinking along with my positioning (and holdings) from time-to-time.

As of market close November 1st Old_Skeet's stock market barometer which follows the S&P 500 Index (SPY) closed the week with a reading of 142 indicating that the Index is overvalued based upon the metrics of the barometer. The yield on the US10YrT moved fom 1.8% down to 1.72% as Treasuries gained in value while their yield fell. I'm finding that the yield on the 500 Index is listed at about 1.9%. With this, the yield advantage remains with stocks. The valuation for the Index moved from 3023 to 3067 for a gain of about 1.4% as shorts began to cover their positions during the first part of the week before short volumes began to turn upwards towards the end of the week. It will be interesting to see in the coming week(s) if the Index can continue its upward march with the short volumes increasing towards the end of the week. It seems some investors are looking for a pullback.

For me, I'm opening November at about 2% heavy in stocks and chose not to rebalance from recent strong upward stock market movement. Generally the 4th and 1st quaters have historically offered up the better returns for stock investors. Plus, I'm thinking that yearend capital gain distributions from many of my equity funds will perform an automatic rebalance of sorts as I take all dividend and capital gain distributions in cash being in the distribution phase of investing (retirement). My three best performing funds, for the week, were DWGAX +2.29% ... SMCWX +2.15% ... and, LPEFX +2.10% which are found in the growth area of my portfolio. Notice all three have a foreign tilt.

Thanks for stopping by and reading.

Trailing comment ... Here is a bit of news that I picked up in my Sunday evening reading that supports the shorts. Freight and Rail Traffic Slows 8% in October ... https://www.zerohedge.com/economics/freight-railroad-traffic-plunged-8-end-october

Wonder what our FOMC wizards will do now? Remember, a year ago they were on a march to increase rates. Thus far this year they have cut three times. Will more rate cuts follow? My thinking ... Perhaps. For me I'll be watching my risk on assets more closely. Remember, though, GM has been on strike for better than a month.

Now a link that supports the bulls. From Momentum Monday it is titled "Stock Market Hits All Time Highs as Nancy Pelosi Creeps Closer to Presidency."

https://howardlindzon.com/momentum-monday-stock-market-hits-all-time-highs-as-nancy-pelosi-creeps-closer-to-presidency/
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As of market close November 8th Old_Skeet's stock market barometer which follows the S&P 500 Index (SPY) closed the week with a reading of 143 indicating that the Index is overvalued based upon the metrics of the barometer. The yield on the US10YrT moved from 1.72% up to 1.94% as Treasuries lost value while their yield gained. I'm finding that the yield on the 500 Index is listed at about 1.89%. With this, the yield advantage now favors the US10YrT over the S&P 500 Index. However, from a long term capital appreciation perspective go with stocks. The valuation for the Index moved from 3067 to 3093 for a gain of about 0.85%. I'm also finding that short volumes which receeded in the previous week have now moved upward during the week as some investors continue to look for a pullback. And, although the Index marched ahead for the week, in it's value, it's breadth reading deminished as there are less companies trading above their 50 day moving average this week over the previous week, or so. So, it seems breadth support has now started to wane. The question, for me, is ... Will this continue?

For me, I trimmed (sold) a little of my risk-on exposure during the week as I'm thinking the Index is now on a "sugar high" in hopes that a trade agreement will soon be signed with China. I'm still invested within my asset allocation model; but, with a defensive tilt as I favor (dividend paying) value over (capital appreciation) growth. My three best performing funds, for the week, were FDSAX +2.41% ... HWIAX +2.07% ... and, TEQIX +1.52% which are found in the growth & income area of my portfolio. I've got about twice the amount invested in value than I have invested in growth. From a domestic to foreign mix I'm currently about 65%/35%.

Your comments are welcome as this keeps the thread "alive" and from getting burried deep within the stack. Perhaps, you have something you'd like to share about the markets or even your portfolio itself? Please know questions are also welcome.

Based upon the posting rules of the board ... Without Comments ... the thread will "die" and will not be updated weekly; but, will revert to a monthly posting.

Thanks for stopping by and reading.

TRAILING COMMENT: I have linked below an article that covers the author's thinking that there is more upside to come over the next six to twelve months along with how he believes one should play it. https://vantagepointtrading.com/stock-market-firmly-in-bullish-territory-heres-where-to-focus-swing-trading-efforts/

The Take Away ... "The S&P 500 and Nasdaq are in full-on bullish mode. A breakout to the upside has signaled the next wave to the upside. There are a lot of sectors looking good right now. That means a lot of opportunities. The metals, and associated stocks, are a good place to look right now. I would also focus on technology, biotech, and industrials. Materials are on the verge of breaking out, so now is the time to look for the stocks that are leaders (already breaking out) in that sector."

For me, in the near term and after capital gain distribution season is over, I'm going to expand a couple of equity fund positions. One being a small/mid cap position, another being one of my emerging market funds; and, yet another being one of my good equity dividend paying funds. The residual from my yearend capital gain distributions will go into fixed income.

Wishing all ... "Good Investing."
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