>After a great July the markets have returned to the trading range that caused the pessimism that resulted in the pull back in May and June. We’re seeing the same volatility and lack of direction. I will admit that I am confused and somewhat dismayed with the market and sometimes question what my tried and true indicators are telling me.
The three main indicators I watch provided by Hayes Advisory are Psychology, Monetary, and Valuation. I can describe these in depth if you will email me or call but as of right now these three are flashing bright green, therefore resulting in a buying opportunity. The ARMS index (there is a symbol for this but you need to contact me for it) in laymen’s terms detects overbought and oversold conditions in the market. If volume is on the advancing side then the indicator is less than one, if it is on the declining side the indicator is greater than one. This morning, Friday the 13th, it is .96. The index closed at 6.31 on Wednesday 11, 2010, on the 200 plus slide. How do you use this and how do I use it in my practice? You will have to attend one of our educational programs for that information.
Now on to some summer musings. August is always a low volume month and therefore we’re seeing lower prices. August is also a transitional month as summer ends and school and fall begins. This year we also have mid-term elections, the confusing state of what taxes are going to be, the question of will there be a change in congress and what kind of taxes are we going to pay. I am not surprised at the meandering that this market has produced. But remember my coaching for all our current clients: Don’t try to time the market. It just doesn’t work. What works is allocation, diversification and rebalancing. I heard a so called radio personality say that he got all of his clients out of the market in June! He has not been heard from about the market performance in July! We tried to contact him but he was on vacation.
This afternoon we are performing a test run for our first webcast. I have contacted Kramer for some of his props but the only thing I got was headless bull dolls. I am looking forward to our webcast test run and hopefully I will provide some interesting content. On another note I am now on Twitter and Facebook, so look for my timely updates.