• 13 hours Can Toyota's Hydrogen Car Take On Tesla?
  • 2 days Why Universal Basic Income Won't Work
  • 2 days Is This The Real Golden State?
  • 3 days Blockchain Firm Pushes For Ethical Mining
  • 3 days America’s Working Class Are Footing All The Bills
  • 3 days Market Volatility Sends Investors Scrambling Into This Asset Class
  • 4 days How Much Energy Would It Take To Power The Death Star?
  • 4 days A Tweet About Hong Kong Could Cost The NBA $4 Billion
  • 4 days World's Largest Miner Doubles Down On Renewables
  • 5 days Nasdaq Cracks Down On Small Chinese IPOs
  • 5 days Is There Any Reason To Be Bullish About Netflix?
  • 5 days Precious Metals See Record Inflows As Investors Hedge Against Teetering Economy
  • 6 days NYU Professor: Tesla Could Lose 80% Of Its Value
  • 6 days Uber To Offer On Demand Employment
  • 6 days SoftBank Reeling After Questionable WeWork Investment
  • 7 days Opportunity Arises In The Democratic Republic Of Congo
  • 8 days Peter Thiel’s Promised Land For Intellectual Troublemakers
  • 9 days Why Gold Stocks Are Drifting Lower
  • 9 days Copper Miners Feel The Squeeze As Prices Slip Once Again
  • 10 days Uncovering The Universe’s Biggest Secrets
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  1. Home
  2. Markets
  3. Other

Want To Reduce Investment Stress?


151 Point Energy-Sapping Move

If we told you the S&P 500 had moved 151 points since August 24, you would probably say, "you are crazy". The S&P 500 closed at 1998 on August 25. The close on September 11 was just one point lower (1997). While the market has made little progress (up or down) since August 25, those who have been watching it tick-by-tick have gone on a 151 point energy-sapping and stress-inducing roller coaster ride. The table below shows the intraday swings on the S&P 500 dating back to August 25. The total of the intraday ups and downs comes to 151 points.


Focus On Closing Prices

For investors, watching the market tick-by-tick is often an unnecessary exercise. The real information concerning the net outcome between the bulls and bears comes in the form of the closing price. The same concepts apply to a weekly timeframe; the weekly close is often quite different than the stress-inducing swings that take place during the week. Are there exceptions to these rules of thumb? Yes, crisis periods require a bit more monitoring and focus (see 2008).


Focus On Support And Resistance

One way to reduce stress is to say, "I will leave my portfolio alone as long as the market closes above support". This week is a good example. We have noted reasons to be patient on September 8, September 9, and September 10. As of the close on September 11, the support levels we have been watching remain in play, meaning we have remained in "leave it alone" territory during the recent intraday swings (see chart below).


Investment Implications - The Weight Of The Evidence

The tweet below from Thursday's trading session sums up the "when a market is in a range" strategy:

The reference to organization above really speaks to the stress-reducing benefits of systems, rules, and structure.


Friday Is A New Day

Retail sales, consumer sentiment, and business inventories are all on deck. For now, we continue to hold U.S. stocks (SPY), a small stake in bonds (TLT), and leading sectors, such as technology (XLK). Even with the intraday rally Thursday, the S&P 500 is still down 10 points this week. If the bears carry the day Friday, our model may call for an incremental reduction to the growth side of our portfolios. As you might guess, we won't consider anything firmly until the market nears the close.

 

Back to homepage

Leave a comment

Leave a comment