Investment Contingency Plans 2010-2011

By: Chris Ciovacco | Thu, Sep 16, 2010
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The immediate fork in the road for stocks involves whether we (a) remain in a range between 940 and 1,130 on the S&P 500 or (b) can see a sustainable move above 1,130.

S&P 500 Large Cap Index Chart

The CCM Bull Market Sustainability Index (BMSI) closed Monday at 1,943, which pushes us closer to the top of the neutral range with bullish territory in sight.

S&P 500 Historical Risk-Reward Profile

The ongoing and big concern in the current environment is the lack of interest in the markets, as evidenced by lackluster volume, especially on the major ETFs, like SPY, QQQQ, and DIA. The positives, which tell us a break to the upside has better odds than many believe, include good market breadth, improving technicals, and economic data which still points to a double-dip recession as the lower probability outcome.

S&P 500 Chart

The market will be looking for any comments related to quantitative easing in the Fed's statement due to be released Tuesday, September 21st at 2:15 p.m. ET. We also have mid-term elections in seven weeks. If the market forecasts significant turnover on November 2nd, it may help push the S&P 500 above 1,130.

The video below covers possible investment contingency plans for S&P 500 levels ranging between 940 and 1,130. The video can be watched "as is" below or you can view it with a larger screen via the YouTube version. If you have a fast internet connection, the YouTube video is a little clearer if you view it in 480p. If you have a slower internet connection, it may be better to watch it in 360p (the default) via the YouTube version.

 

 

We have been underwhelmed with the market's advance in the past few days; we would like to see some convincing participation before we become interested near current levels.

 


 

Chris Ciovacco

Author: Chris Ciovacco

Chris Ciovacco
Ciovacco Capital Management

Chris Ciovacco

Chris Ciovacco is the Chief Investment Officer for Ciovacco Capital Management, LLC. More on the web at www.ciovaccocapital.com.

All material presented herein is believed to be reliable but we cannot attest to its accuracy. Investment recommendations may change and readers are urged to check with their investment counselors and tax advisors before making any investment decisions. Opinions expressed in these reports may change without prior notice. This memorandum is based on information available to the public. No representation is made that it is accurate or complete. This memorandum is not an offer to buy or sell or a solicitation of an offer to buy or sell the securities mentioned. The investments discussed or recommended in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is not necessarily a guide to future performance. The price or value of the investments to which this report relates, either directly or indirectly, may fall or rise against the interest of investors. All prices and yields contained in this report are subject to change without notice. This information is based on hypothetical assumptions and is intended for illustrative purposes only. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION CONTAINED IN THIS ARTICLE.

Ciovacco Capital Management, LLC is an independent money management firm based in Atlanta, Georgia. CCM helps individual investors and businesses, large & small; achieve improved investment results via research and globally diversified investment portfolios. Since we are a fee-based firm, our only objective is to help you protect and grow your assets. Our long-term, theme-oriented, buy-and-hold approach allows for portfolio rebalancing from time to time to adjust to new opportunities or changing market conditions.

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