Commento tramite Raymond James in attienza con il mio commento precedente e con quelli precedenti:
Over the weekend I was sent yet another interesting insight from Jeff Hirsch at the
Stock Trader’s Almanac organization. He writes:
“Second quarter corporate results have been solid and encouraging for the most part so far this earnings season, but QE taper discussions remain front page news. Following a brisk retreat from late May through June, the market has done an about face just as quickly as Fed Chairman Bernanke did when speaking about the Fed’s current bond buying activities. As a result, July 2013 is on pace to rack up impressive full-month gains. In the eleven trading days through yesterday’s close, DJIA had gained 3.6% so far, qualifying itself as a Hot July. At its present trajectory, DJIA could finish July with a Top 10 performance when compared to all Julys since 1950. Gains of this magnitude for July, however, have frequently been followed by a late-summer or autumn selloff and better buying opportunities than now. The [nearby] table of big July gains and subsequent declines since 1950 gives you a good look at the kind of buying opportunities that have occurred in the past following full-month July gains in excess of 3.5%.”
Indeed, despite the negative weight of the evidence, like the fact that the S&P 500 (SPX/1709.67) is stretched VERY far above its 200-day moving average (DMA) at 1537.22, last week’s action corrected some of those negatives. Verily, most of the indices I monitor are now back above their respective 10-DMAs. The most significant move came from the economically sensitive D-J Transportation Average (TRAN/6651.69), which gained an eye-popping 2.76% last week. Its new all-time high was confirmed by the D-J Industrial Average (INDU/15658.36) with a new all-time high of its own, thus rendering another Dow Theory “buy signal.” In fact, most of the indexes have traded to new all-time highs. Also on a positive note is the NYSE McClellan Oscillator, which has corrected its overbought condition, but is still only neutrally configured and not yet oversold. Yet in the negative column is that the NYSE Advance/Decline Line has not confirmed the upside. So we wait, waiting to see if the weight of the evidence lines up leading to the first meaningful decline of the year. If that “call” proves wrong, it will not be the first time I have been wrong. Manifestly, in this business it is no disgrace to guess wrong, the disgrace is to stay wrong!
The call for this week: I have various short-term negative signals into the first part of this week, if the SPX can ignore those signals, then it will show an amazing resiliency during a pretty difficult period of low internal-energy readings combined with various other cautionary indicators. Personally, I believe what is shaping up is a giant false upside breakout pattern that would be confirmed by a close below 1700 on the SPX, and reinforced by a break below 1684. However, in this business stubbornness is a dangerous trait! Accordingly this week, and next, should tell us if my cautionary call, within the context of a secular bull market, is going to play. If not, it is better to lose face and save skin, which is the key to investment success as defined by Benjamin Graham in the book “The Intelligent Investor” where Dr. Graham notes, “The essences of portfolio management is the management of RISKS, not the management of Returns.” He closes that thought by noting, “ALL good portfolio management begins with this premise!”
I like this story as scribed by Frederick E. “Shad” Rowe captain of Greenbrier Partners:
“In 1965 Steve McQueen starred in The Cincinnati Kid, the classic poker movie of all time. This movie has so far saved me from becoming ultra-broke or ultra-rich. The climactic scene in the movie involves a showdown hand of five-card stud between Steve McQueen (“the Kid”) and Edward G. Robinson (“The Man”). This scene made an indelible impression on me during my school years. With three cards dealt, Robinson bets heavily on a possible flush, a stupid bet if there ever were one, particularly since McQueen has a pair showing. The pot gets bigger and bigger. McQueen ends up with a full house – aces over tens, which loses to Robinson’s straight flush. When Robinson turns his hole card, the jack of diamonds; McQueen looks as though he is going to throw up. He has been wiped out. The movie’s soundtrack is throbbing. Sweat is dripping down McQueen’s face, as he stares at Robinson’s hand in disbelief.”