No positive news anywhere with weakening consumer confidence and more housing weakness leading the charge for the bears. This might not have been too bad of a punch but lack of commitment from the Fed in regards to an interest rate cut sent the market south with the Dow losing 280 points.
Our Trend Tracking Indexes (TTIs) followed suit and are hugging their long term trend lines as follows:
Domestic TTI: +1.23%
International TTI: -0.90%
What a difference a week makes. After last week’s rally, the markets seemed to have calmed down but now we’re right back in the volatility game. As I mentioned in previous posts, I’ve been holding off re-investing in the international arena, despite the international TTI having moved above its trend line.
As this market action proved, we are still in shakeout mode and may be dancing around the trend line for a while. This is why I want to see a clear break to the upside before making any commitments.
This downside move has brought a potential domestic Sell back into the equation. I will liquidate my remaining domestic holdings if either their 7% sell stops get triggered or the domestic TTI crosses its trend line to the downside; whichever occurs first.
Comments 2
Ulli,
It is very kind of yu to post yr trend line activity daily on yr blog. I match it up to 2 other indicators I follow.
May I ask a question, yr stop loss is set at 7% for each investment. Can yu give an approximation how much of a percentage drop/loss is encurred when the TTI drops to negative (I guess) from its high to where yu wud sell based on a trend change.
Is that normally greater than the 7 % trend line or less than. It seems that it is usually greater than since yu have been divesting as several investments have hit the 7% limit. I realize yr TTI is propritary and the essence of yr investment strategy so yu may not be able to discuss this in general terms.
Then of course the question is is a larger hit greater than 7% palitable on the TTI to sell a trend.
Tks much for all your great work and info.
RW
There is no fixed percentage I can give you for the TTI to reach its trend line. However, most of the time, the 7% sell stop of the individual fund/ETF is triggered before the TTI crosses its trend line.