The Selling Continues – Sold iShares S&P North Amer Tech-Multimd Ntwk (IGN) January 27, 2010
Posted by Marlowe Cassetti in DBC, DDM, IGN, SSO.trackback
The Federal Reserve reassured stock market investors Wednesday that the economy is improving and that interest 
rates will stay low.
Stocks recovered from an early slide to end moderately higher after the Fed issued a more upbeat assessment of the economy following a two-day meeting on interest rates. Treasury prices also reversed direction and began falling as investors withdrew money from safe haven holdings.
The Dow Jones industrial average rose 41.87, or 0.4 percent, to 10,236.16. It was down about 40 ahead of the Fed’s statement. The Standard & Poor’s 500 index rose 5.33, or 0.5 percent, to 1,097.50, while the Nasdaq composite index rose 17.68, or 0.8 percent, to 2,221.41.(commentary & photo courtesy of AP)
Within my portfolio the selling does continue, although the market recovered from earlier in the day losses. I had good expectations for IGN. It hit a high on the 19th of this month only to start a downturn that culminated in my position getting stopped out.
As I mentioned before all this selling has built up my cash reserves. I’m awaiting word from RSI before I decide on how to deploy these cash reserves. I may move it into a holding fund, leave it in cash or a mix of the two. As of today my portfolio is 25% equities and the rest is in cash or income producing funds.
Progress on the trend following module continues and is encouraging. Trend following in any form has the problem of large drawdown and poor win/loss ratio. This fact of life can be validated by searching the literature. I’ve been somewhat successful in minimizing these adverse effects. With that said, the acid test is to see, via simulation, how much “value added” does the inclusion of this module into the RSI framework yield.
But with that said, the TF module came up with two picks tonight (remember, not recommended..still under development):
- Ultra S&P500 ProShares (SSO)
- PowerShares DB Commodity Index Tracking (DBC)
This is rather interesting. SSO goes hand in hand with the previous pick of Ultra Dow30 ProShares (DDM). This infers that this module has a strong bullish stance.
Catch you tomorrow.
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