Old Skeet's Barometer Report

[oldskeet]

Hi guys. The Big Index closed today at 4137, 10.2% off it's 52 week high and moved into correction territory. It's up 7.7% year to date. The yield on the US10YrT fell 11 basis points to 4.84%.

Stocks are in a funk and their near term direction is being mostly driven by daily Corporate earnings reports and news related events. It is what it is and not likely to change over the next couple of weeks.

Generally, when the Barometer indicates the Index is oversold I will buy around the edges; but, not today as a possible US Government shutdown looms come mid November.

The Barometer closed the day with a reading of 20 (oversold).

Thanks for stopping by and reading.

Wishing All Good Investing.

Old_Skeet

[uncleharley]

Oversold and overbought conditions can persist for a long time. Jamie Dimon's large sale of his companies stock speaks volumes about the direction of the stock market. The Financial sector ETF, XLF, is more specific with 7 of its last 8 trading days pointing down. Likewise for the S&P 500. The tech heavy NASDAQ 100 is doing slightly better with only 6 of the last 8 closings pointing down. I remain fully invested with about 24% of my investible assets being short the Qs and leveraged 3 by times. I am sure someone will want to debate whether we are in a bear market or a correction to a bull market. My thought is that we are going down. As always, not in a straight line.

[oldskeet]

Hi guys. Here is the weekending report for the Barometer. In review the Barometer which follows the S &P500 Index formulates it's reading from three areas. They are fundamentals, technicals and investor sentiment. Two of the areas are major contributors to the Barometer's low reading. They are technicals and investor sentiment. Third quarter fundamentals which center around earnings are better than projected.

This leads me to believe big money has put their selling britches on much like the bond vigilantes have done to drive asset prices lower. For the stock jocks their short positions are in the money while the long only investors suffer and book losses which leads to more selling. In time, this drives the weaker investor from the markets and the stronger big money investors buys the shares at very favorable prices. When enough becomes enough then the markets turn upward. When this upward trend will start is the million dollar question. I am thinking that when bond yields start falling stocks will, in time, begin to rise.

For the weekending October 27, the Big Index closed at 4117, down for the week by 2.5% and off it's 52 week high by 10.6% and in correction territory. However, year to date it is up 7.7%. The yield on the US10YrT closed the week at 4.84% down 8 basis points for the week.

The Barometer closed the week with a reading of 17 (oversold). It will be interesting to see what the FOMC wizards do in their upcoming meeting and a little further out what Congress does about the Budget.

Your guess is as good as mine. For now, I am happy to just sit and collect my interest and dividends while I wait this storm of sorts out. In time, I will put my equity buying britches on.

Thanks for stopping by and reading.

Wishing All Good Inverting.

Old_Skeet

[uncleharley]

Excellent plan!!! For some help with the timing of when to buy one might want to review this article from Fidelity.

www.fidelity.com/viewpoints/active-investor/stock-volume?ccsource=email_monthly_AT

[archer]

Question: If one day a stock trades only 1 share at a 2% loss, does the price of that stock fall 2% solely on that 1 share?

And conversely, the other other zillion shares don't affect price because they were not traded?

If the above is a yes, then would the true value of the stock for someone wanting to sell be better determined by bid price?

Or is bid/ask pricing based on previous trading?

[yogibearbull]

archer, when you enter limit-buy order, that becomes part of the bid-list and the highest bid is displayed.

When you enter limit-sell order, that becomes part if the ask-list and the lowest ask is displayed.

That is shown bid-ask.

Market makers are quite active in this. But you can experiment by entering a bid just above the displayed bid, or entering ask just below the displayed ask, and your bid or ask would be shown (unless hit).

Bid-ask can change without any trading.

Last price is the last trade price.

[retiredat48]

Oct 28, 2023 12:30:51 GMT uncleharley said:

Excellent plan!!! For some help with the timing of when to buy one might want to review this article from Fidelity.

www.fidelity.com/viewpoints/active-investor/stock-volume?ccsource=email_monthly_AT

Is an easy summary to just say: Pay attention to the VIX...rising and spiking VIX...like above 25 or more, is a buy time period.

R48

[uncleharley]

Oct 28, 2023 15:48:09 GMT retiredat48 said:

Oct 28, 2023 12:30:51 GMT uncleharley said:

Excellent plan!!! For some help with the timing of when to buy one might want to review this article from Fidelity.

www.fidelity.com/viewpoints/active-investor/stock-volume?ccsource=email_monthly_AT

Is an easy summary to just say: Pay attention to the VIX...rising and spiking VIX...like above 25 or more, is a buy time period.

R48

I don't think so.  VIX is a useful tool if you are looking for a reading on the general stock market or if you are trading an index fund which represents the same index as VIX represents.  If one is trading anything else it would be wise to study the chart of the subject investment.  

[yogibearbull]

And which VIX?

Beyond the common VIX for SP500, there are VIX-like measures for Nasdaq 100 (VXN), small-cap Russell 2000 (RVX), emerging markets (VXEEM), oil (OVX), gold (GVZ), and for several stocks.

[Norbert]

I really tried, but could never find any predictive value with the VIX. Agree that it's better to just watch the underlying index.

[yogibearbull]

VIX indicates movements. It is at best coincident - about here and now. It has little predictive value even though it is by definition the "expected" volatility over the next 30 days. There are studies that show that realized volatility differs a lot from predicted volatility (through VIX or other indicators).

[oldskeet]

Hi uncleharley,

Thank you for bringing up the use of trading volume as an indicator.

My late father used volume in his barometer as an indicator which I moved away from. But, since you brought it up I revisited the indicators and metrics I am currently using. With this, I decided to replace one of mine and add volume back into the barometer.

I can here old pops now ... See, I told you volume is an important metric.

Thanks again for bringing it to surface.

Old_Skeet

[uncleharley]

Oct 28, 2023 19:42:11 GMT oldskeet said:

Hi uncleharley,

Thank you for bringing up the use of trading volume as an indicator.

My late father used volume in his barometer as an indicator which I moved away from. But, since you brought it up I revisited the indicators and metrics I am currently using. With this, I decided to replace one of mine and add volume back into the barometer.

I can here old pops now ... See, I told you volume is an important metric.

Thanks again for bringing it to surface.

Old_Skeet

You're welcome.  I have found that most market indicators are derivatives of volume or price.  They are both important to me.

[archer]

Higher VIX can be good for buying falling knives if you are into that sort of thing. While I haven't really tracked it for predictive merit, I assume it is called the fear gauge for a reason. If the market is going up and up and vix is also rising, I would tend to be more careful. If it is rising when the market is going down, I wouldn't gamble on trying to get in at the bottom unless I had other reason to believe a bottom was forming, which BTW would most likely be some of you guys suggesting it was so.

[FD1000]

Price vs Volume indicator? Price is so much better.
1) Price is the ultimate indicator, price is where thousands/millions buyers/sellers agree every second in real time on a certain PRICE regardless of the volume.
2) As a trader for almost 20+ year, I look for leading wide range categories to hold for months to years. Price has a high correlation to that than volume.
3) Volume has higher correlation to single stocks/narrow indexes than to wide-range categories. The word higher is a relative one, price has the highest correlation because only price matters.
4) Good trader use lower number of tools + simplicity which leads to mostly/all price derivatives indicators and T/A tools. The idea behind T/A is to smooth out the rapid trading and to give the trader an idea where is enter and exit trades. It's not a science, it's a way to show the trader higher probability.
5) The VIX also comes from the price.
6) From my experience T/A works better for slower moving funds/indexes = lower SD.
7) The easiest price indicator is an uptrend that comes directly from the price. QQQ uptrends is way better than IWM.  That's all I need to know. See (schrts.co/UnxBDvUh)

We already know that  series of higher prices = uptrend = performance.
Let's show examples why SPY,QQQ VOLUME isn't an accurate measure for performance.
Attachment 1 shows QQQ chart for 6 months. The volume at number 1 + 2 looks a like, but the price goes up at 1 but down at 2.
Attachment 2 is similar with SPY.
I can show dozens of example over many years.

What do I do? Exactly what I said above = use wide-range categories + limited numbers of simple T/A based on the price and I pay zero attention to volume. 
First I look at the big picture and then I use my T/A tools.  It's all at (fd1000.freeforums.net/thread/24/why-use-technical-analysis)

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[oldskeet]

Hi FD1000.

Thanks for making comment.

I am thinking that most on the board have some sort of black box they use in their investing endeavors.

For me, I am more of a long term investor that buys mostly in down markets for my buy and hold positions and then, at times, trades around the edges as a side endeavor. I use my barometer as an aid in my buying for long term positions and setting my equity allocation. For short term spiff positions, I mostly use the slow stoch indicator.

At age 75 I try to keep things simple.

Thanks again for making post of how you trade.

Old_Skeet

[racqueteer]

Just a brief comment: It's a little depressing that someone calling himself "oldskeet" is younger than I!

[FD1000]

Oct 29, 2023 12:56:55 GMT oldskeet said:

Hi FD1000.

Thanks for making comment.

I am thinking that most on the board have some sort of black box they use in their investing endeavors.

For me, I am more of a long term investor that buys mostly in down markets for my buy and hold positions and then, at times, trades around the edges as a side endeavor. I use my barometer as an aid in my buying for long term positions and setting my equity allocation. For short term spiff positions, I mostly use the slow stoch indicator.

At age 75 I try to keep things simple.

Thanks again for making post of how you trade.

Old_Skeet

The slow stoch indicator is based on the price and close to MACD. The chart below shows both. After a quick look it seems to me that Slow Stoch was better, the buy was earlier in Aug and the sell was earlier in Sep. I learned something today. Thanks.
Keeping is simple, as I said before, is what most should do. I use 2-3 indicators.

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[archer]

Nice chart FD. The buy and sell signals are not too often, but yet often enough, and the signals are near the highs and lows. So often TA signals lag price action way too much, especially sells, as the market often drops faster than in gains. MACD alone gives false signals but slow sto weeds those out, at least in the time period of the chart.

Taking the same chart back to Nov 22 -Aug 23, is more hit and miss, or, I'm just not good at recognizing the signals properly.

[FD1000]

Several comments
1) You got to use ST + LT T/A indicators
2) I sell a lot quicker than I buy because markets go down quicker most times. In a very high risk, selling should be very fast, think 03/2020.
This means that if one of my T/A signaled a sell I'm very quick, on the buy side I may look for more verification and be slower.
3) T/A is easier and more accurate for lower SD funds. It works very well with my bond OEFs.

[anitya]

I always used VIX as an indication of current sentiment- one among many other sentiments driven by human actions and not by surveys / polls.

[anitya]

Oct 28, 2023 22:34:18 GMT archer said:

Higher VIX can be good for buying falling knives if you are into that sort of thing. While I haven't really tracked it for predictive merit, I assume it is called the fear gauge for a reason. If the market is going up and up and vix is also rising, I would tend to be more careful. If it is rising when the market is going down, I wouldn't gamble on trying to get in at the bottom unless I had other reason to believe a bottom was forming, which BTW would most likely be some of you guys suggesting it was so.

Along those lines, Al the creator and owner of CEFAnalyzer.com was out of the market in a rising and high VIX and was fully invested in a low and stable VIX.  He said that worked for what he invested in.

[oldskeet]

Hi guys and good morning. Here is the Barometer report for Monday October 30th close. The Big Index closed at 4167 up 50 points (1.2%). It is off it's 52 week high by 9.5%, up from it's 52 week low by 12.7%, with a year to date gain of 8.5%. The barometer's closing reading was 23 (undervalued). From review of the futures this morning, as I write, the markets will open up. Old_Skeet

[uncleharley]

The DJIs light volume struggle yesterday, to get above its 600 dma makes me want to wait one more day before backing up the truck for dividend paying aristocrat stocks. I may want to get the oil changed on my car instead.

[fritzo489]

oldskeet, Good morning O_S , What is your take on SVAAX ? Do you still hold this fund & what will it take to upright this fund ? Thanks for your input, fritzo489

[oldskeet]

Hi fritzo489, Thank you for your question. Yes, I still own SVAAX as it is one of my larger holdings at about 30% in my domestic equity income sleeve. It is an interest rate sensitive fund as about 50% of it's holdings are held in the defensive sectors of health care, utilities, and consumer staples. The two other large sector weightings are financials and energy. This fund is held because of it's income generation as it sports a yield of 4.16% and pays monthly. Although it is currently selling at about 20% off it's 52 week high when the FOMC wizards cut interest rates it should recover. I do not consider it a capital appreciation fund. The other three funds held in this sleeve are ANCFX,GSRAX, and IDIVX. This sleeve makes up about 9% of my overall portfolio. And, you guessed correctly, I have been thinking of buying more of it. Again, thank you for your question. Old_Skeet

[fritzo489]

oldskeet, Liked your comment, " the FOMC wizards cut interest rates it should recover." Thanks for your reply & good investing to you.

[oldskeet]

Hi guys and good morning. The head FOMC wizard speaks at 2:00 pm this afternoon. Currently, as I write the S&P500 stock futures are down indicating stocks will most likely open down this morning.  With this, I am thinking that it will be wizard talk that moves the market.

Yesterday, the Big Index closed at 4194 for a gain of 0.65%. This puts it's year to date gain at 9.2%.

The Barometer moved up from a reading of 23 to 27, undervalued.

[uncleharley]

Nov 1, 2023 8:17:04 GMT oldskeet said:

Hi guys and good morning. The head FOMC wizard speaks at 2:00 pm this afternoon. Currently, as I write the S&P500 stock futures are down indicating stocks will most likely open down this morning.  With this, I am thinking that it will be wizard talk that moves the market.

Yesterday, the Big Index closed at 4194 for a gain of 0.65%. This puts it's year to date gain at 9.2%.

The Barometer moved up from a reading of 23 to 27, undervalued.

The Transport index also had an up day yesterday, on above average trading volume.  This suggests we will have at least a short-term rally in domestic stocks unless the Fed has a surprise.  They usually do not like surprises. 

[anitya]

Not a good start to the so called best month of the year. High Beta stocks down too much on the day.