I was checking my volatility chart this morning and noticed a massive volatility spike on 3/18, two days after my timing model issued a BUY signal. The BUY signal flashed on 3/14, I moved money around on 3/17 and the volatility spike happened the following day. This is sure beginning to look like a bottom, something that I posted about in my “Has The Market Bottomed?” post earlier this week.
Still though, a lot depends on how the subprime mess continues to devolve and how the general market handles it, but the sentiment seems to be firming and I’m seeing a lot of contrarian indicators pointing to higher markets in the future. This could, of course, be a big head fake and we could easily go down from here. However I plan to rotate money out of my bond holdings over the next few weeks and slowly move money back in, assuming we don’t break the recent S&P500 low of 1276!
Disclosure: Still 40% in cash and bonds.
I’m not ready to call a bottom yet (I’m 68% cash and bonds). Yesterday I wrote a post referencing and interview with Russell Napier, author of Anatomy of the Bear: Lessons From Wall Street’s Four Great Bottoms. He researched 70,000 Wall Street Journal stories 2 months prior and 2 month after each of the historic market bottoms of the 20th Century. I think we have more downside …
T Struck: I’m still pretty cautious and still heavily in cash/bonds. You might be right and I might be wrong, that’s the funny thing about markets. One moment your looking at a heavenly market, the next its hell.