THE SHORT-TERM CONSENSUS HOTLINE (SAMPLE)
Mutual Funds Signal Alert –
prepared Friday, April 27, 3:22 p.m. eastern
PLEASE NOTE: The time that these reports go out is at the bottom of the report as “released.” The “prepared” time at the top of the report is when we begin production.
Dow 13245 (+40)
SPX 1405 (+5)
June E-Mini S&P 1400.75 (+4.00)
Nasdaq 100 NDX 2745 (+19)
Nasdaq Composite 3072 (+22)
Russell 2000 825.78 (+7.45)
XAU Gold and Silver Index 165.52 (+1.94)
Feb Gold $1664.20 (+$3.70)
VIX 16.10 (-.14)
Next stop: the April 4 gaps, maybe.
Remarkably, it looks like at least some of the averages are headed there – to the April 4 gaps. And given the strong seasonal pattern dead ahead, it’s more than possible. But, keep in mind, that while the short-term seasonal pattern appears to be quite strong for all of next week as we head into another month, the bigger picture seasonal pattern is turning quite negative as the positive 6 months come to an end, giving rise to the weak 6 months. Accompanying that seasonal change is the deafening chant of “Sell in May and Go Away.”
Remember, last year, the market topped out on May 2. That was no coincidence. I would think that, this year, people might recall that the market topped out in early May, and might want to do a little preemptive selling. We’ll see.
In the SPX the April 4 gap weighs in at 1413.38 and in the futures the gap was a big one, now partially filled. Originally it was 1408.75-1398.50. But now that the E-Mini has popped up to 1402.75 the gap is just 6 points wide from 1408.75 to 1402.75. Then, not far above that is the April 3 gap in the cash at 1419.04. No comparable gap in the futures. Maybe a move to that level will just about do it for now. If not, the market doesn’t have to go much higher to challenge the prior highs at 1422.38 in the cash.
In the Russell 2000 the April 4 gap is not far from today’s highs at 834.80-827.67. At least the bottom of that gap isn’t far from today’s highs. Today, as of 3:40 eastern, the RUT reached a high of 826.05.
At yesterday’s close the McClellan Oscillator registered an almost overbought +99.44. About as close as you can get to overbought and not quite get there. Maybe today it will do the trick.
Mutual Fund Models
At today’s close our Intermediate Term Model (tracked by Timer Digest) will exit its recent Buy Signal and return to the sidelines. That Buy Signal was established on April 10, at the low close for the month at 1358.59. In fact it was the lowest close since March 7.
Client Accounts
At today’s close we are taking profits in remaining positions in the Dow and, in most accounts, cutting back in our Russell 2000 positions, as well as cutting back a bit in our Precious Metals holdings.
Our Aggressive Growth Accounts are cutting back to 25-35% invested in stocks. This includes a position in the precious metals, now up to 10% levels. Also still holding our modest position in junk bonds.
Our Market Timing Accounts are cutting back to 15-20% invested in stocks, including a modest position in the precious metals. Still continuing to hold a modest position in junk bonds.
0-% long Dow
5-15% long S&P
0% long NDX
5-10% long Russell 2000
0-5% long Japan Fund
0% long U.S. Dollar Index
0-10% long Precious Metals Fund
0% Emerging Markets Fund
0% short bonds
0-5% High Yield Bond Fund
0% Semiconductor Sector
0% long Financial Services Sector
0% long Energy Services Sector
H. Schiller
Released Friday, April 27, 3:58 p.m. eastern
PLEASE REMEMBER PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. FUTURES AND OPTIONS TRADING IS EXTREMELY SPECULATIVE AND ONLY RISK CAPITAL SHOULD BE EMPLOYED. SOME OR ALL OF INVESTED FUNDS CAN BE LOST IN FUTURES OR OPTIONS TRADING. NO GUARANTEES OF PROFITABILITY ARE MADE BY HARRY SCHILLER OR BY THE SHORT-TERM CONSENSUS HOTLINE.