I'm timing the market - who's in?

NedS

coastline said:

Not trying to derail the thread but as market timing deals will only take place in weeks or months then I'll add comments as we go along. Buying the dip at X% below can be seen in CTY.L the IT in the OP's original post. In this case we'll use the 9 day moving average in the daily timeframe . I'm using this link as default settings are built into web address which isn't possible on other websites. As seen by the orange line you win some you lose some. You couldn't buy and sell based on that. You could top up but that's it. 

 City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

You need other indicators to help but the trouble is there's dozens and more. I've narrowed it down as much as I can as many are similar in end result.

City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

They all swing with the chart pattern of the indices or share in general. Overbought and oversold etc.

City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

The indicators and moving averages need to be tighter to the price otherwise you'll be all over the place. Look at the default settings on here 50 ma and 200 ma . Blue crosses red ,SELL, October at 370p. Blue crosses red , BUY , Jan 2023 at 410p. No good then. 

CTY.L | SharpCharts | StockCharts.com

As they say on Youtube " just press the like button " " subscription $100 a month " with coastline it's free   

Yes, price is now flirting below the 9 day SMA, has already moved from overbought (Williams %R) and MACD has turned with blue now below red. The signals are deteriorating and telling us we should be cautious, hence why I have been reducing risk with my last two trades to reduce my holdings. I do not need to risk my capital chasing gains from here that may not materialise.

coastline

NedS said:

coastline said:

Not trying to derail the thread but as market timing deals will only take place in weeks or months then I'll add comments as we go along. Buying the dip at X% below can be seen in CTY.L the IT in the OP's original post. In this case we'll use the 9 day moving average in the daily timeframe . I'm using this link as default settings are built into web address which isn't possible on other websites. As seen by the orange line you win some you lose some. You couldn't buy and sell based on that. You could top up but that's it. 

 City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

You need other indicators to help but the trouble is there's dozens and more. I've narrowed it down as much as I can as many are similar in end result.

City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

They all swing with the chart pattern of the indices or share in general. Overbought and oversold etc.

City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

The indicators and moving averages need to be tighter to the price otherwise you'll be all over the place. Look at the default settings on here 50 ma and 200 ma . Blue crosses red ,SELL, October at 370p. Blue crosses red , BUY , Jan 2023 at 410p. No good then. 

CTY.L | SharpCharts | StockCharts.com

As they say on Youtube " just press the like button " " subscription $100 a month " with coastline it's free   

Yes, price is now flirting below the 9 day SMA, has already moved from overbought (Williams %R) and MACD has turned with blue now below red. The signals are deteriorating and telling us we should be cautious, hence why I have been reducing risk with my last two trades to reduce my holdings. I do not need to risk my capital chasing gains from here that may not materialise.

I'm still using my favoured set up on IC and Stockcharts as the signals are set a bit smoother. The colours are a great addition as it gives you focus. With IC its easy to register and save your chosen settings . Simple bookmark after that and away you go.  

The City of London Investment Trust Plc, CTY:LSE interactive chart - Investors Chronicle

CTY.L | SharpCharts | StockCharts.com

See the idea with the MACD but not getting too confident . Anything can happen as all we've got is guidelines and alerts. The calls have been made on the journey.

City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

The US hasn't started well down over 1% and spill over to rest of markets as ever. We can only wait and see but it's all about inflation, rates and earnings . Plenty of fireworks.

 $SPX | SharpCharts | StockCharts.com

NedS

NedS said:

Trading update:

Sold a further 5000 CTY shares today at 425.2515p with fees of £12.95. Net position is now:

Shares: 5000

Cash: £50,684.76

Trading update:

Sold final 5000 CTY shares today at 422.2965p with fees of £12.95. Net position is now:

Shares: 0

Cash: £71,786.64

By selling in 3 tranches, I've achieved a slightly better price on each sale, and left around £850 on the table (~1.1%). If prices fall from here, I'll be really happy with that. If they rise, I'm getting 3.43% whilst I wait (see below). At the current share price of around 420-425p, the risk for a 4.75% dividend versus a guaranteed 3.43% on cash doesn't seem worth taking given the limited upside potential.

I'm holding the cash in a short term cash ETF to at least give me the overnight Sonia rate of 3.43% whilst waiting for an opportunity to re-enter CTY at a lower price (below 400p would be nice to redeploy this existing capital).

adindas

Timing the market beside technical in my personal experience will need to pay a closer attention to the news regarding the market mover.

This week market mover : FOMC Meeting to decide the interest rate, Earning season.

NedS

NedS said:

Adyinvestment said:

NedS said:

If you have a strategy you favour, feel free to play along - you've seen the rules. Put up a notional £100K, pick a FTSE100 ETF, follow your strategy, post your trades and we will see how we've all faired at the end of the year - the numbers speak for themselves.

I would follow that 😀

OK, lets make it simple then, I will also track how a drip feeding / pound cost averaging strategy would have performed over the same period for comparison purposes.

I started the year with 17,000 CTY shares. The closing price on 30/12/2022 was 410.5p so we will assign a nominal cash value of £69,785.

We will make 13 regular purchases of around £5,368 in value to drip feed into the markets on the last day of each month, with our opening (retrospective) purchase at 30/12/2022. Both strategies start the year with the equivalent of 17,000 shares. The lump sum buy and hold will end the year with 17,000 shares. Lets see how my market timing strategy and a drip feeding strategy compare and who has the most shares at the end of the year (with any remaining cash converted to shares at the closing price at the end of the year).

Current position (Drip Feed PCA/DCA strategy):

30/12/2022 purchase 1300 shares at 410.5p (including 0.5% stamp duty and £11.95 trading fee (no £1 levy as less than £10k)

Total price = £5375.13

CTY shares held: 1300

Cash position: £64,409.87

Updating the position for the drip feeding strategy as it's last day of month:

31/01/2023 purchase 1300 shares at 420.0p (the mid point of the days trades so far) including 0.5% stamp duty and £11.95 trading fee (no £1 levy as less than £10k)

Price = £5372.62

CTY shares bought: 1270

CTY Share Total: 2570

Cash position: £64,409.87 - £5372.62 = £59037.25

Total Value: (2570 x 420p) + £59037.25 cash = £69831.25

My position:

Shares: 0

Cash: £71,786.64

I'm currently up by £1,955 or 2.7% versus the drip feeding strategy after 1 month. Early days.

quirkydeptless

NedS said:

I'm holding the cash in a short term cash ETF to at least give me the overnight Sonia rate of 3.43% whilst waiting for an opportunity to re-enter CTY at a lower price (below 400p would be nice to redeploy this existing capital).

Which ETF is that?

NedS

quirkydeptless said:

NedS said:

I'm holding the cash in a short term cash ETF to at least give me the overnight Sonia rate of 3.43% whilst waiting for an opportunity to re-enter CTY at a lower price (below 400p would be nice to redeploy this existing capital).

Which ETF is that?

For an ETF I like CSH2, or for a fund I like the Royal London Short Term Money Market Acc fund. Not a recommendation.

coastline

Sometimes it's a flat wave , whipsaw , sideways. Well we've got one since my call was made. Mid January 765.4p Sell with my favoured set up but never made the bottom or overbought range to buy again. Even this faster set up was slightly short of target around the 20th Jan.

iShares Core FTSE 100 UCITS ETF, UK:ISF Advanced Chart - (LON) UK:ISF, iShares Core FTSE 100 UCITS ETF Stock Price - BigCharts.com (marketwatch.com)

As I've mentioned you need one eye on the US markets and on the 23rd Jan the SP 500 rallied and moved higher taking the rest of the markets with it. Same old story.

$SPX | SharpCharts | StockCharts.com

That rally has broken down in recent days and ISF.L is again falling with the rest currently at 7.70p or 5p above my sell. Not the end of the world. Could well be this week for a buy ? The market makes a fool of us all !
Posted yesterday on long running thread but doubt anybody read it about the FED. So they issue a preferred inflation set up as a guide and it's working in their favour for months. Well until today as it's still higher than expected and the markets drop 1%. That'll be more rate hikes then ? Can't trust anybody.

See Ned's CTY is in the money . Good luck.

City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

adindas

coastline said:

Sometimes it's a flat wave , whipsaw , sideways. Well we've got one since my call was made. Mid January 765.4p Sell with my favoured set up but never made the bottom or overbought range to buy again. Even this faster set up was slightly short of target around the 20th Jan.

iShares Core FTSE 100 UCITS ETF, UK:ISF Advanced Chart - (LON) UK:ISF, iShares Core FTSE 100 UCITS ETF Stock Price - BigCharts.com (marketwatch.com)

As I've mentioned you need one eye on the US markets and on the 23rd Jan the SP 500 rallied and moved higher taking the rest of the markets with it. Same old story.

$SPX | SharpCharts | StockCharts.com

That rally has broken down in recent days and ISF.L is again falling with the rest currently at 7.70p or 5p above my sell. Not the end of the world. Could well be this week for a buy ? The market makes a fool of us all !
Posted yesterday on long running thread but doubt anybody read it about the FED. So they issue a preferred inflation set up as a guide and it's working in their favour for months. Well until today as it's still higher than expected and the markets drop 1%. That'll be more rate hikes then ? Can't trust anybody.

See Ned's CTY is in the money . Good luck.

City of London Investment Trust PLC, UK:CTY Advanced Chart - (LON) UK:CTY, City of London Investment Trust PLC Stock Price - BigCharts.com (marketwatch.com)

For SPX.

What I could see here is that :

MACD has formed the dead cross

Hoovering Below Lower Band of Bollinger Band

Already below of the Trending line of Support level (black lines)

Red Volumes (selling) for several days.

What has not been confirmed here is that:

RSI has not reached the oversold territory

It has touched the purple moving averages, but it has not crossed.

The Pink Moving average has not been crossed.

F&G index is still Greed has not reached neutral

But waiting for that moment is probably already too late.

In many cases, many things in life will reverse to the mean. So using the principle of reversion to the mean is sensibly better than randomly, blindly firing your bullets

Other indicators, Barometer in the Market: Stock Price Breadth, Put/Call Options, Market Volatility/The VIX, Junk Bond Demands

NedS

Yes, CTY is hovering just around the value I sold at. In hindsight, I sold a little early and left a few percent on the table, but it's difficult calling the top and I'm not too greedy. I must admit I wasn't expecting the recent US rally. If the S&P500 has already bottomed, and it may have done if we get a soft landing / no recession, then I'd expect markets to go sideways range-bound for at least 12 months.

For me, the game changer this year is increased interest rates. That means I can currently get 4% yield in a very low risk money market fund (with another 0.25% increase on the way?) compared to 4.75% yield in CTY (at current prices). That makes it all about risk vs reward - there needs to be low risk / downside to CTY to warrant taking the risk for 0.75% increase over the risk free rate. That means more than ever buying at low levels which (a) minimises further downside risk, and (b) increases the yield spread over the risk free rate. That 0.75% equates to around £500/year income which I can easily live without. A 5% dividend yield was very attractive when interest rates were near zero, but far less so now.

I've been out of the market for the last month plus, but have still been receiving 4% yield on those funds. Still playing the waiting game, looking for a more attractive price / opportunity to put my capital at risk.