Friday 3 May 2013

Buy in May

Will I regret this? I might. This may be a bull trap.

Vector Vest has signaled a buy based on a) standard buy criteria of consistent price rises over a day, and a week; the ratio of stocks represented as buys and sells; by the rise in their proprietary indicator, the RT, which measures the dynamics of a stock's price movements over one day, one week, one quarter and one year; and b) the crossover of the RT's 10 and 15 day moving average.

All these measures look backwards so there is an inherent risk that they signal too late. But Vector Vest claim to have tested and retested, and they conclude that this combination of criteria indicate that the market is likely to continue to rise. I have staked a bit less than a quarter of my portfolio on the belief that they are right.

I have picked my shares based on selection criteria that, in the past, have selected shares that have risen sharply in price over the period of one month. So you see I don't expect to hold these shares for very long.

My mini portfolio, all US share, at present consists of: TCX, LGF, KR, RJET, SAFM, XL, SMI. If you want to know more about these shares two excellent free sources of information are Yahoo Finance and Market Watch. Just type in the symbol codes in the boxes provided and loads of information is at your finger tips.

Lets have a quick look at a chart. I've uses the S&P which has only recently broken through its all time high. If we look at the DOW we have to face the fact that it is very very close to the  15000 level which could prove a barrier. As things stand with Europe speaking of negative interest rates signs for further stock market growth seem good. My fingers are crossed.




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