Saturday, May 17, 2014

Still stuck in the middle

Jokers on the left, Clowns on the right, still stuck in the middle. The market goes up, the market goes down but at the end of the week we are still at or near the all time high. In short we are going nowhere fast. Having said all that I am now of the opinion, without much conviction, that we are in for the final blow off top heading into 2016. If I am right the market should break out of this trading range and go parabolic before everything collapses in late 2015 or early 2016. In the meantime all that can be done is study the charts and hope for some sense of direction to emerge. Below is the updated model portfolio with the last remaining bet I have on the table which is UBT which is a bet the price of bonds will go up and interest rates will go down. 

UBT100-56.6964.20$-25.34$+751.00+13.25%$6,420.00

Total



$ -25.34$ 751.00 13.25%$ 6,420.0
 As you can see I am up 13.25% on this wager. So far, so good. 
Below is the chart of UBT.
Now that is a pretty chart. I wish I had several more like it. Here is an interesting development. Below is a chart of the RUT which is the Russell 2000 which many investors believe is a much more accurate measure of the health of the economy. The Rut tracks 2000 of the smaller stocks in the market. The Rut is looking quite sickly so I don't know if this is predicting anything or not but I will be watching it closely in the weeks to come. 

As you can see the RUT has rolled over to the downside while while the Dow and S&P are hovering around all time highs.

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