Bullish Readings Soaring: The Crowd Approaches Euphoria!

[PuppBaby]

A discussion of relative performance of indices is rather interesting over the past few updates. I am wondering what the rotation out of AI/tech will look like and which index is best to take advantage of this move. Normally I park my 401k into a SPX fund, but are other index funds better at this point? RUT, midcaps, small caps, others?

I'm curious on this too, however despite the upcoming expected tech correction I am not going to be changing my retirement funds even though I am weighted pretty heavily on tech. The time and hassle just isn't worth it for a profit that is 30 years in the future unless you're 55+, also keep in mind AI/Tech will still take off so you're better off in a slower boat now that will definitely hit a strong current forward.

Below is my fund of choice:
VFFVX Vanguard Target Retirement 2055, it's weighted as follows:
Technology 21.95%
Financial Services 14.80%
Healthcare 12.20%
Industrials 11.27%
Cyclical 10.75%
Communication 7.01%

Let me know if anyone else has alternative recommendations

[MarkD]

Thirty years. Wish I had the option of switching between cash, SPHB and SPLV, in my 30's. It's what I recommend for my kids. Pretty simple RS swing that can go on for months with few trades.

[bobdylan]

MarkD - can you provide any more information on that strategy? I recall reviewing something like this about 10 years ago, but never put it into practice.

[MarkD]

Fairly straightforward.

Here's a weekly to review.

https://ibb.co/1Tydxvh

Works on any time frame tbh, use longer imo to avoid whipsaws. The process is based on Walter Deemer's book but simply watching price action and trend lines works well. Any MAs but not really needed.

Look for price reversals on RS plus the ETFs.

https://www.amazon.com/Deemer-Technical ... 139&sr=8-1

[MarkD]

Sorry, on mobile. Let me know if you want to discuss in more detail.

A better source is to read Trader Vic. It describes the use of trendlines and reversal patterns.

[SOL]

@bobdylan and Puppbaby, etc


To reiterate, we are discussing a market correction, not a crash. Secondly, if you are a genuine long-term investor (which, sadly, the majority are not, despite claiming to be), one measure of whether one is a long-term investor or not is the level of panic one feels. Most people panic during sharp pullbacks, indicating they are not true long-term investors. They might have long-term intentions but are driven by short-term emotions. Emotions take precedence when they take control; hence the intent might be longer term, but emotions turn them into speculators. Genuine long-term investors can follow a simple strategy. They view sharp market or sector pullbacks as opportunities.

Now, for a potential strategy: one approach could be to invest in XLI or similar funds. Utilize pullbacks to build a position. Alternatively, a more refined strategy would be to focus on some of the companies XLI invests in.

For example, in XLI, here are the top holdings

Raytheon Technologies Corp (Symbol: RTX) - Index Weight: 4.37%
Honeywell Intl Inc (Symbol: HON) - Index Weight: 4.31%
United Parcel Service Inc B (Symbol: UPS) - Index Weight: 4.21%
Caterpillar Inc (Symbol: CAT) - Index Weight: 4.12%
Union Pacific Corp (Symbol: UNP) - Index Weight: 4.10%
General Electric Co (Symbol: GE) - Index Weight: 3.73%
Boeing Co (Symbol: BA) - Index Weight: 3.72%
Deere & Co (Symbol: DE) - Index Weight: 3.66%
Lockheed Martin (Symbol: LMT) - Index Weight: 3.18%
Automatic Data Processing (Symbol: ADP) - Index Weight: 3.05%


Lastly, please remind me to update the chart every month until it reaches the slightly overbought range.

[MarkD]

MarkD - can you provide any more information on that strategy? I recall reviewing something like this about 10 years ago, but never put it into practice.

Here is another gem for LT investing, if you can find it. I was unable to replicate due to the way my retirement funds were allocated back in the day. Simple once a month strategy that works for 401k accounts IF you have a method to mimic funds which are not highly correlated.

https://www.abebooks.com/9780966776607/ ... 776607/plp

[bobdylan]

Thank you for your replies. Regarding the rotation of SPLV and SPHB - how long of a period have you used to avoid whipsaw? I previously remember seeing this as one month.

I am lucky to have rolled over my old 401ks into an IRA that allows me great freedom in investments with full access to options and stocks/etfs.

[MarkD]

I use monthly but confirmation from lower time frame is essential to see flow in and out of the securities. Mutual funds are easier than stocks imo.

Included is a simple method of RS which might assist. There are lots of ways to set up a chart for switching.

https://ibb.co/hZtZkFq

[MarkD]

Bought a 1/4 position of RTX on the drop near the open. Suspect more downside will occur, but will just add more shares.

[SOL]

Bought a 1/4 position of RTX on the drop near the open. Suspect more downside will occur, but will just add more shares.

There is a good layer of support in the 69-72 range. If that holds it will start to trend upwards. Very long term, it should be fine.

[Budge]

Bought a 1/4 position of RTX on the drop near the open. Suspect more downside will occur, but will just add more shares.

There is a good layer of support in the 69-72 range. If that holds it will start to trend upwards. Very long term, it should be fine.

I did a quick scan and there's a report of a glitch in a Pratt and Whitney engine. If so, can't imagine that lasts long. Am I missing something?

[jlhooter]

Just bought at 85, 1/5. Will keep nibbling down to 70 for LT play.
Love these bad stories on great companies.

[loneranger11]

Just bought at 85, 1/5. Will keep nibbling down to 70 for LT play.
Love these bad stories on great companies.

Having lost a small fortune many moons ago and successfully recouped it all. I like to shoot for what I perceive to be rather exceptional entry points. At present, I have a limit order set at 69.

[George1010]

The US stock market has become a 'get-rich-quick' scheme that's ignoring oncoming economic pain, top economist David Rosenberg says

The US stock market has become a "get-rich-quick" scheme driven by AI mania and the return of "animal spirits", David Rosenberg said.

The top economist also doubled down on recession warnings for the US economy, and ruled out hopes of a soft landing.

"There is no chance we're having a soft landing in the context of the most pernicious tightening by the Fed since the Paul Volcker years," he said.

The US stock market has become a "get-rich-quick" scheme that's masking the economic distress ahead, according to top economist David Rosenberg.

In an exclusive interview with MarketWatch, the Rosenberg Research president doubled down on his bearish views, ripped into the Federal Reserve again, and dashed hopes of a soft landing for the US economy.

"There is no chance we're having a soft landing in the context of the most pernicious tightening by the Fed since the Paul Volcker years," Rosenberg said.

The central bank has raised interest rates by 500 basis points over the past five quarters in a bid to cool historically high inflation. The aggressive policy tightening succeeded in slowing the pace of consumer-price increases to 3% in June from 9% a year earlier, but investors still expect the Fed to raise rates again at its July meeting.

https://finance.yahoo.com/news/us-stock ... 07905.html

Anyone agree with is assessment. I think he might be onto something.

A couple of youngsters I know, think that all they have to do is follow the AI mania trend and bitcoin to be multi-millionaires.