The Contrarian's View
** COMPUTER WARMLINE **

Last updated on: Monday May 10, 2004 at DJIA: 9990.02

Summary

Current intermediate-term expectation: Ugly (rest of) May, June and July, though a very-short-term rally is overdue.
Current long-term expectation: A major deflationary (multiyear) bear market in stocks is in progress.

TIMER'S TREND: Last NYSE BUY signal was on August 12, 2003, at DJIA 9310.06
Last NYSE SELL signal was on April 14, 2004, at DJIA 10377.95
Last NASDAQ BUY signal was on April 1, 2004 at COMPX 2015.01
Last NASDAQ SELL signal was on April 13, 2004, at COMPX 2030.08
Current signals: SELL
Overbought/Oversold Indicators: neutral

Portfolio Update

Just to bring you up to date: As I indicated I would in the most recent issue, on April 30 I moved the great bulk of my (RA) retirement funds which were in TIAA Real Estate, into CREF Money Market. It seemed to me, with fewer than two months to go until retirement, and with only a little longer until I can put the money where I want it and where I can use TIAA Traditional to "ride" the rise in interest rates, it was imprudent to take on any market risk. (After all, when one has announced to the world that one is retiring, one cannot reverse course at the last minute just because one's retirement portfolio has suddenly headed south.)

I was also disturbed by: "Timer's Trend" SELL signals, an inability to "point-skim" rallies in the bond market (because there weren't any), the completely flat performance of TIAA Real Estate in April (actually, since mid-March), and the beginning of asset bubbles popping, especially equity REITs (15% loss in a week) and silver (26% within a month). This all indicated to me that some sort of structural change was underway.... particularly in the bond market, probably the partial unwinding of the "carry trade".... and it would be best just to step aside for awhile. As Warren Buffett has said, holding cash is better than doing something stupid with it.

At the beginning of the year I probably should have said, "Sell early in May and go away". Oh well, close enough.