Jared,
I wish that I had some wisdom for you. As you must already know, I am a contrarian and have been skeptical about this market for a long time. However, my indicators haven't supported my caution and I have stayed fully invested for a very long time. While the market is impossible to predict with confidence, I find that Martin Zweig's methods provide a general framework for longer term (several month time scale or longer) forecasting of major moves.
His two statements were, "Don't fight the Fed," and "The trend is your friend." He never went against the longer term trend. Right now, the Fed has been raising its interest rates slowly enough to render that part of Zweig's model neutral. On the other hand, the trend is up, according to my indicators. I place his model at neutral, but the last indication (years ago by now) was upward. So that has not changed. The next turning point will obviously be downward but I do not know when that will be.
Sarah as I remember is a very skilled trend analyst. So I would continue to go with her recommendations.
There are some recent contrarian news indicators, including one on the front page of the Washington Post regarding people "splurging" because their 401Ks are up strongly. I will withhold my comments on such attitudes, except to say that this is the type of thing that one sees at a market top - intermediate or otherwise.
Ultimately, I am looking for an inverted yield curve before I sell out, but as you pointed out, that seems not to be happening. Gold is hitting 6 month highs, the dollar is hitting lows, and oil is hitting highs. If this continues, then we might be seeing a significant inflection point.
So listen to Sarah. I will speak up if I see something interesting.
Good luck.
Tex
Posted by: mrweyl@hotmail.com
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