Just for fun, Steve Gage, owner of Gage Business Communication (my go-to man for all of my printing and marketing supply needs: www.gagebiz.com) sent me this chart. It’s an overlay of Tiger’s wins each year and the S&P 500. If you want to take this study with more than a grain of salt, you could draw the conclusion from the recent market activity that Tiger should be due for a run of wins. Go Tiger!
On a more serious note, I put together this chart marking late April/ early May in each year since 2006. As you can see, the S&P has often reached at least a short termed peak during that point on the calendar. Given some of the factors I’ve mentioned in prior blogs regarding the potential for a correction, I do think that the tendency for markets to sell off in late spring should be factored into this year’s trading strategy. Backing that, recent updates from sentimentrader.com note that “smart money” (commercial hedgers) are now $62BB net short the 4 large market indices (NAZ, S&P500, DJIA, Russell 2000) —the largest short level in a decade. Meanwhile, “dumb money” (3-month mutual fund inflow) recently hit $36BB, a level that has surpassed the level reached before the 17% + correction in 2011 from April-August. I’ve recently raised about 20% cash in my equity model. I expect to further reduce my equity exposure by or before the end of April, if nothing else to take profits and prepare for future opportunities should markets pull back into the spring.
Keith speaking in Creemore
Don’t forget to stop by and visit the Clearview Health and Leisure Showcase, where I will be speaking this Saturday March 23rd @ 2PM.
SmartBounce blog hits record high viewers
We reached 5350 viewers in February. The trend is good, you might say – Thanks for reading SmartBounce! I’d encourage all viewers to add comments on my posts – consider SmartBounce a learning community where all of us can share our knowledge and views.
I successfully traded a few lumber stocks this season between October and mid January but would have loved to still be holding these positions. I purchased these positions because I beleived the US housing recovery is real.
If this housing recovery is real, how much more upside do we have short term. Would I be better off to wait for the usual spring correction to take place before re-entering the lumber producers and the home builders sectors.
I guess I’m asking for your view on the housing recovery in the USA and what would be the best way to play it if there is more upside.
To learn more about the potential for US housing recovery- best to Google Robert Shiller who is the leading authority in that area.
As far as lumber–trend is up, it broke its old 2010-2011 resistance a while ago, and although stochastics is rounding over (indicating potential for a near-termed pullback) the trend has not yet been broken. Stay with the trend.
I would sure love to see you cover the lumber/home builder sectors here on your weekly sector review.