Stocks Edge Higher But Week Is Down And Month Is Up February 26, 2010
Posted by Marlowe Cassetti in DBC.add a comment
The stock market eked out a gain Friday as investors took downbeat economic news in stride.
The modest gains still left stocks with a loss for the week but the Dow Jones industrial average and the Standard & Poor’s 500 index logged their best month since November.
The latest bad news came from several corners including the financial industry. Insurer American International Group Inc. reported a larger than expected fourth-quarter loss. The company said its primary insurance business was hurt in part by the economy. (market commentary & photo courtesy of AP)
DBC appears to be improving and if this continues I will purchase.
No RSI picks for today … have a great weekend,
Stocks Fall on Concerns – Monitoring DBC February 25, 2010
Posted by Marlowe Cassetti in DBC.add a comment
Stocks backtracked from an early plunge Thursday but still closed lower on concerns about lingering economic weakness in the U.S.
Investors were also uneasy about the possibility that Greece’s rising debt problems might spill over to other countries. But the dollar, which spiked early in the day as investors sought safe investments, came off its highs. And that signaled that investors, at least for now, had lost some of their fears about overseas economies.
The Dow Jones industrial average closed down 53 points after having fallen 188. Treasury prices, like the dollar, rose as investors sought safety.(commentary & photo courtesy of AP)
I have been monitoring DBC most of the day as the market has tumbled. Despite its retreat, I am still interested in DBC but not until I see some signs that it has started on a positive path. I should point that DBC was selected by RSI via the trend following module which means that it has detected a positive change in trend. So until I see a resumption of an ascending trend I will hold off on buying DBC. At the end of the day DBC was gapped down 1.69%, see below.
After the close there were no RSI picks. Catch you after the market closes.
Bernanke Lifts Stocks – Buy PowerShares DB Commodity Index Tracking (DBC) February 24, 2010
Posted by Marlowe Cassetti in DBC.add a comment
Federal Reserve Chairman Ben Bernanke gave the stock market the tonic it wanted: Interest rates will stay low.
Stocks rallied Wednesday and ended a two-day slide after Bernanke made his forecast during his semiannual report to Congress. He told the House Financial Services Committee he still expects rates will remain low for an extended period. Investors want to see low-cost borrowing continue to help revive the economy.
Financial stocks helped pull the Dow Jones industrial average up 92 points after the index slid 101 on Tuesday. JPMorgan Chase & Co. and Bank of America Corp. each rose more than 2 percent. Meanwhile, the technology-dominated Nasdaq composite index rose after software company Autodesk Inc. reported stronger earnings and revenue than expected.(market commentary & photo courtesy of AP)
RSI has been sleeping through all these market gyrations. It is a bit disconcerting for me since I have some funds that I want to deploy. I have to remember to be patient and wait for the sleeping RSI to awake. However, as these days of no RSI ETF picks roll on I am contemplating not blogging until there is something to report. So if you notice that I’m not providing a daily blog, it is because there is nothing to report…no buy recommendations and no sell reports.
Of course I wrote the comments above, just prior to running RSI tonight. And guess what? RSI issued the following:
- Buy 770* shares PowerShares DB Commodity Index Tracking (DBC) enter a stop -$1.30 below your filled price. Initiate a trailing stop $2.17 above your entry price.
DBC trades a couple of million shares each day. It is a popular ETF that has a modest volatility of 4.59% and has a minimal bid/ask spread, so you should have an easy time of initiating a trade at a reasonable price. I plan to jump on this train tomorrow.
* Remember the 770 shares represents a 1% portfolio risk for a $100,000 portfolio. Adjust the number of shares to conform with your own risk tolerance.
Catch you tomorrow.
Stocks Retreat On Consumer Report – RSI Silent February 23, 2010
Posted by Marlowe Cassetti in Blogroll.add a comment
The stock market fell sharply Tuesday after a surprising drop in consumer confidence reminded investors of the fragility of the economic recovery.
The Dow Jones industrials fell 100 points. Interest rates also fell in the bond market as investors moved money out of stocks and into the safety of Treasurys.
The Conference Board said its consumer confidence index fell to 46 in February from 56.5 last month. That was well below the forecast of economists polled by Thomson Reuters. They expected a reading of 55.(commentary & photo courtesy of AP)
No RSI picks today, catch you tomorrow.
Stocks Edge Higher – Solid Gold Winners?? February 21, 2010
Posted by Marlowe Cassetti in Blogroll.add a comment
U.S. stocks edged higher on Monday as takeover news and gains in bank shares on hopes of a regulatory reprieve 
were offset by uncertainty over the Federal Reserve’s policy intentions.
Until Fed Chairman Ben Bernanke clarifies the Fed’s thinking behind last week’s surprise hike in the discount rate, investors were set to tread carefully as they weigh the likely removal of the extraordinary liquidity that has propped markets up for months, analysts said.
The Dow Jones industrial average gained 15.12 points, or 0.15 percent, to 10,417.47. The Standard & Poor’s 500 Index advanced 2.46 points, or 0.22 percent, to 1,111.63. The Nasdaq Composite Index rose 4.24 points, or 0.19 percent, to 2,248.11.(commentary & photo courtesy of Reuters)
I had an opportunity to do some trading systems testing…..other folks trading systems. It started a few months ago when a cohort shared a somewhat pricey system for my evaluation. Since that time I have collected several other systems for examination. I cannot go into all the details of my investigation, but I can give you a quick synopsis.
- System #1 – Came with a fairly complete tutorial on how to trade the system. Included were a number of examples of successful trades for several stocks. I built a trading module to replicate the examples and I was satisfied that I had properly captured the system. I then proceeded to test the system over a basket of stocks over different time periods. My test results showed that the system was almost always unprofitable.
- System #2 – Was written up in a magazine as a “profitable pull-back” system. I went through a process similar to what I did for System #1. Its trading performance was at best marginal but mostly unprofitable.
- System #3 – Was a system a friend bought about 16 years ago for trading a select set of commodity futures. I built a model of this system and tried it out using commodity ETFs. It was marginally profitable but I have yet to try it out with actual future contracts.
- System #4 – Another magazine example and another failed system. The author does suggest augmenting this system with other, unspecified TA methods. I really don’t believe that such TA helpers exist.
The authors always give examples of profitable trades that I suspect were “cherry picked”. None showed trades over extensive time periods with a large portfolio of stocks or commodities and aggregated the the results. I also noted a lot of evidence of confirmation bias in the presentation of examples. And as a reader of the “systems description” it is quite easy to get sucked into believing that the system is a solid gold winner. NOT SO!!
RSI had no new picks tonight. Catch you tomorrow.
Stocks Edge Higher – An UltraShort Crap Shoot February 19, 2010
Posted by Marlowe Cassetti in TWM.add a comment
The stock market ended a strong week with modest gains after investors found good news in the Federal Reserve’s decision to begin dismantling emergency lending measures for banks.
The Dow Jones industrial average rose for a fourth day Friday, edging up 9 points to record its best week in more than three months.
Stocks initially fell in response to the Fed’s announcement late Thursday that it is raising the rate it charges banks for emergency loans, known as the discount rate. Stocks turned higher in late morning trading as investors saw the Fed’s move as a vote of confidence that the financial system was recovering and that banks didn’t need as much support.(commentary & photo courtesy AP)
I was surprised that the market didn’t falter today after yesterday’s FED action. So much for forecasting….. I’ll leave that up to RSI.
The following is not a recommendation but rather a bottom fishing speculation.
It is UltraShort Russell2000 ProShares (TWM) and it was picked by an experimental module, that has yet to be validated. So this is truly a speculation.
This fund has been falling since last March when it was over $110 and today it closed at $24.18. I would suggest monitoring TWM and if the general market makes a break to the downside, it should take off. Again, this is the proverbial crap shoot and TWM has a volatility of 10%, so use great care.
Have a great weekend and I’ll catch you Monday evening.
Stronger Manufacturing Lifts Market – The FED Has Started Tightening! February 18, 2010
Posted by Marlowe Cassetti in Blogroll.add a comment
An increase in regional manufacturing pushed the stock market to its third straight advance and offset concerns about lower sales at Wal-Mart.
The Dow Jones industrial average rose 84 points, bringing its gains for the week to nearly 300 points. It’s the best streak for the Dow since November.
Stock futures turned lower after the closing bell Thursday when the Federal Reserve announced it was hiking the interest rate that it charges banks for emergency loans. The move doesn’t change consumer borrowing rates, but the notion that policymakers would start to reel in some of the emergency economic supports put in place since 2007 spooked investors.
Dow Jones industrial average futures fell 0.6 percent. Standard & Poor’s 500 index futures lost 0.8 percent, while Nasdaq 100 index futures fell 0.7 percent.
The gain in stocks Thursday came after the Philadelphia Federal Reserve said its index of regional manufacturing rose to 17.6 in February from 15.2 in January. That follows reports the past two days that also pointed to a pickup in business at the nation’s factories.(commentary & photo courtesy of AP)
The FED tightening will throw a wet blanket over the current market rally. How much will it dampen investor enthusiasm? We will know in the next few days. Watch out as the uncertainty will make the sellers bail out prior to this weekend.
There were no RSI picks after the market close today. Catch you tomorrow.
Good News for the Stock market February 18, 2010
Posted by Marlowe Cassetti in Blogroll.add a comment
A stream of good news has the stock market back on an upward path.
Encouraging corporate and economic reports Wednesday raised hopes that a recovery is taking hold although investors are still concerned about unemployment in the U.S. and debt problems in countries like Greece.
The Dow Jones industrial average rose 40 points a day after it jumped 170. That rally was also in response to stronger economic and earning news. Treasury prices fell Wednesday as demand for safe investments eased.(market commentary & photo courtesy of AP)
Nothing to report vis-a-vis RSI…no picks. Catch you tomorrow.
Stock Market Takes Off – Sold: UltraShort Silver ProShares (ZSL) February 16, 2010
Posted by Marlowe Cassetti in ZSL.add a comment
Signs that the economy is indeed strengthening gave investors a surge of optimism and sent stocks sharply higher.
The Dow Jones industrials soared almost 170 points Tuesday on upbeat earnings reports and corporate deals. Investors who have been anxious in recent weeks about economic problems overseas were able to put aside their concerns for the time being. They focused instead on the domestic economy.
The dollar fell as investors felt less of a need to stash their money in safer investments. Oil, gold and other commodities joined stocks as the beneficiaries of the market’s renewed confidence. And the stocks of energy and materials producers were among the day’s big winners.(market commentary & photo courtesy of AP)
As you can see from the commentary above, ZSL took a big 8.18% dip today as the physical silver took off. The stop loss threshold was hit. Because of risk sizing (recommended by RSI) ZSL was a small holding. This certainly shows the value of having risk sizing and protective stops.
With the long weekend I had a great opportunity to make some necessary modifications to RSI. I believe it will enhance its performance and operation. From this point forward, the three RSI subsystems will be providing buy and sell recommendations on a larger universe of ETF/ETN funds. One of the subsystems will operate on a long/short group that includes some leveraged funds, however the triple leveraged funds are excluded.
There were no new RSI picks after the close today. Catch you tomorrow.
Unsteady Markets Ahead of Long Weekend February 12, 2010
Posted by Marlowe Cassetti in Blogroll.add a comment
The Dow and S&P 500 dipped on Friday as China’s move to curb bank lending and U.S. and European economic data raised fears the global recovery might be in jeopardy.
Even so, Wall Street stocks ended off the day’s lows as investors bet the European Union would come up with a clearly defined plan to aid debt-laden Greece and restore confidence in countries using the euro.
Stock laggards included large manufacturers and commodity-related companies, many dependent on Chinese demand. On the Nasdaq, bargain-hunting in technology helped the index to end slightly higher.(commentary & photo courtesy of Reuters)
