The fairly conservative mutual fund portfolio I outlined recently ("Current Portfolio", May 7, 2006) is down 2.2% from its peak on May 10, down 1% for the month to date and up 3.3% year to date. It is up 13.6% for the past year and up 14% compounded annually (before taxes) since Labor Day 2003 when I first set it up.
Most of my analysis is done on the S&P 500 index. This week it came down to the up trend line from March 2003 through the October 2005 low, and it almost touched the 61.8% level of the entire bear market of 2000-2003 from above. At the same time, sentiment measures are extremely bearish, hence bullish, as they were in October last year. Until the SP makes a failure high (lower than the recent high) and then a lower low than whatever this one turns out to be, the trend will not have changed.
There is a possible timer line for Monday and a bagpiper buy on, but lows often take several weeks to develop if it is to be.
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