Saturday, March 7, 2015

$SPY, $STUDY, Bears now have the short term momentum. However, Friday’s decline was a knee-jerk reaction to price in a June rate hike by the Fed. The longer term trend is up and it doesn’t look to be in danger at this juncture. This series of pullbacks, like many others we’ve seen in the past several years, is likely to provide investors with a new entry point.

An interesting article in the recent Business Insider blog by S&P Capital IQ's Sam Stovall “Happy birthday, bull market!"   On March 6, 2009, the S&P 500 hit an intraday low of 666.79. On Friday, the bull run's sixth birthday, the S&P 500 opened at 2,100.99 – an impressive 215% gain. "Only three [bull markets] since World War II have lasted this long,"  My calculations for this period are comparable, which produce an annual rate of return of 13.18% p.a. slightly higher than the 50 year average total return for the S & P 500. Thus the markets have enjoyed a real nice recovery since the let down of 2008-2009.  Is it done?  Most likely not.

While our short term Major Market signal has gone Bearish as of Friday’s close, this is a very fast reaction to Friday’s trading and is subject to an equally fast reversal.  The Intermediate Term Model remains bullish with the Asset Allocation recommendation constant at 75% Invested and 25% Cash. 

Our Alpha One Model did not trade over the prior week and continued to hold the eleven positions at a 51% long position.  There were two profitable options trade last week which offset the week’s modest decline in the accumulated equity holdings appreciation year-to-date.

There was a change in my life beginning this past Monday which will impact my blogging frequency.  Monday, I joined brandsymbol as an Account Manager and had a very fun filled week I am pleased to report.  At my age coming out of retirement was not easy, but both Gail and I had been looking for more to do in our lives, and the opportunity to join Clayton Tolley, President and CEO of brandsymbol, who is a long-time friend, along with his crew at brandsymbol was too good an opportunity to pass up.  More on this in further postings, but for now just be aware that I will post the weekly Alpha wrap up on Saturday as I have in the past but will not be posting my daily trading activity to either the blog or the other sites which you may have formerly been gleaning the information from.