June 2006

June

June 1, 2006

Back into the market!  Much to my surprise, TimingCube gave a buy signal last night.  And the market went up big time today.  I caught only a part of that move, of course.  We will see what happens next.  I can mention TimingCube here because by the time I actually publish this, their signal will be public.  Otherwise, I would have to keep it secret. The earlier sell signal came from TimingCube also.

June 5, 2006

Horrible day.  The fed seems determined to bring on a recession.  It is truly pathetic that we have given such influence to such men.  Tomorrow is 6/6/06.  Should I be worried?

June 8, 2006

Another terrible day.  We killed Abu Musab al-Zarqawi, and the market still is going down.  It was definitely a mistake to get in.  There was not any confirmation of the TimingCube buy from any of the other signals I follow.  I did not play it safe by waiting for confirmation, as I generally do.  Definitely my mistake.  All of this shows how powerful the Fed is.  These guys just do not like growth.  In the future, I will not take just one signal, but expect confirmation.  

June 15, 2006

I saw some guy on CNBC this morning talking about buying when the market goes down. Of course, you are supposed to sell at the top. Now that the Nasdaq is down 10% you should buy. If it goes down 10% more, buy again, and if it goes down 10% more, buy more.

He said that in 2000 - 2001 he had problems doing this because he had to work hard to make enough money to keep buying.

Of course, this seems nonsensical (and even possibly hypocritical with hidden motives) to me, largely because of the money management issues. If you are smart enough to sell at the top, please tell us how you know it is the top. And tell us beforehand, not after the market has gone down 10%. Oh yes, that was the top. I know it now. Then do you invest all if the Nasdaq goes down 10%? OK, but where do you get the money to buy in if it goes down another 10%? Fine, invest half, and wait for the next 10% downturn. But wait! If there is going to be another 10% downturn, why buy at all? And if there is not going to be another 10% downturn, then when the market goes back up, you were only 50% invested.

I could go on and on, but what it amounts to is an undefined algorithm that cannot be programmed (for those who ever read Knuth or anybody in that field). Sounds good, but is utter nonsense.

On the order of the Google Quote of the Day:

I told the doctor I broke my leg in two places. He told me to quit going to those places.
- Henny Youngman

Well, without going into details, it is fairly clear to me that TimingCube has not done a good job of timing this market.  The market is confusing, of course, but still, a bad job is a bad job.  We have to expect mistakes sometimes.  The signal to sell in May was excellent, and confirmed by the Trade/Fasttrack signals I run.  The buy at the first of the month, which suckered me in, was not confirmed by any of the Trade/Fasttrack signals.  I took it anyway, and regretted it.  I said that cash was king, and that seems to be the case, even though today we have a bear market rally.  Even if this turns out to be the beginning of a new uptrend, there will be many twists and turns before any uptrend is confirmed.  

Resolution:  use TimingCube (and other signals) only when confirmed by different signals, at least on a buy signal.  In other words, don't jump the gun.

June 30, 2006

Well, this was a bad month, and I am both upset by TimingCube's mistake, and my own mistake in following it.  Yesterday was an excellent day in the markets.  Today, on the other hand, saw no follow-through except in the Russell 2000, which was up significantly.  That may have been a result of re-balancing the index.  Will the small caps lead us higher this next month?  I still do not see a trend worth following.