Archive for October 2009
What’s so interesting about this post? This was from May 26, 2o09. The Web Bot prediction has been right for quite a long time now and after reading this, I can tell you that it has been correct. On October 26, the markets started its downward direction. Read below for more information.
Latest news on the web bot project predictions has the stock markets to resumes their downward spiral from October 26 through November 5. On Nov 5 Obama administration will find itself in dire set of straits until Mid-March 2010 (some say Feb 2010), which mostly means with U.K. AAA Rating In Jeopardy, Is U.S. Next? The rising cost of credit default insurance on U.S. government debt, as well as the potential for higher spending on health care in the future. More detail to come later…. as there is not a lot of detail out yet on the next financial crises though most likely having the same theme, Oil Price and Gas Futures Skyrocketing, more bank scandals, US currency to continue weakness.
The seasonal trade for the technology sector is fast upon us. The technology sector has usually lead the way after a corrective bounce in October. In a bull market this can occur in the second week in October. Given the current market conditions investors should favour entering sectors later in the month and look for large drops to provide opportunities along the way.
Because the technology sector often is a leader when the market bounces in October, investors should pay attention to the performance of the sector relative to S&P 500. Weak performance will indicate weaker times ahead.
Yes, I know I put gold in both the sell section and the upcoming seasonals. The negative period for gold is the month of October, so investors should be prepared to take another position shortly after they sell. A common question that I get asked is, “why not hold onto a sector during its negative time period?”
The reason is simple- historically you have made more money selling and buying back again. Investors always have the choice of using a stop loss, or a momentum indicator to help bridge the gap when the negative season for a sector is short.
The American consumer is still alive and kicking. Although the best retail seasonal period occurs in January, the pre-Thanksgiving trade still works relatively well. The trade is only one month long and lasts from October 28th to November 29th. The rationale for this trade is to be in the market before everyone else and get out when everyone else is getting in for the duration of the holiday season.
Look for this sector to hit support at $82 for an attractive entry point.
The consumer discretionary sector typically starts its outperformance towards the end of October (October 28th). Given the volatility that can occur in October and the relative strength of the best candidate sector to receive the proceeds from a sale, it is best not to enter this sector too early. Given that this sector has been turned back at resistance, it is possible for this sector to hit the support line at $24. Be patient.
The consumer staples sector has produced a profit since the entry into the position in April. It currently sits just under resistance. The official sell date for this sector is October 28th and is part of the Consumer Switch Strategy – rotating between the discretionary and staples sectors.
The consumer staples sector has historically been one of the top sectors in October. Investors should wait until the end of the month to switch into the discretionary sector.
We have just finished the second seasonal period for oil. Although the summer seasonal period is typically weaker than the winter seasonal, oil has produced a good profit. Technically, oil has broken down just as the seasonal period has ended.
If investors have not reduced their weighting in the oil sector, investors should reconsider. The next seasonal period for oil comes soon enough in January/February and provides one more opportunity to make money in the sector.
This sector has done well since its buy date in July. At the time the sector was sitting well below support and I set a possible target of $1,000. At this point we are just over $1,000 mark, but the strong seasonal period is ending for gold. There is bad news and good news. The bad news is that October is the worst month for gold. The good news is that gold tends to do well again for November and December.
Consider reducing gold for the October.