Stocks turn lower after weaker-than-expected GDP – Reviewing PowerShares DB Commodity Index Tracking (DBC) April 30, 2010
Posted by Marlowe Cassetti in DBC.add a comment
Stocks ended April with a big loss Friday on disappointment with two economic reports and worries about a criminal investigation of Goldman Sachs.
Investors lost some of their optimism about the economy after the government’s weaker-than-expected gross domestic product report and news of a drop in consumer sentiment. Reports that the government has started a criminal investigation of Goldman sent financial stocks tumbling. Investors feared that possible charges against the company could have a chilling effect on the banking industry.
The Dow Jones industrial average fell 158 points, and all the major indexes fell more than 1 percent.
The market ratcheted higher and lower this week on alternating spurts of optimism and pessimism about the economy. The Dow had three triple-digit moves. But analysts have been expecting a pullback after almost three months of mostly steady gains. (market commentary & photo courtesy of AP)
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It certainly was a bummer of a week. The RSI portfolio wasn’t hurt that much. I have to check the numbers but I think it ended the week flat. Certainly not what I would have expected from the “worse week since January”. What it has working for it is the almost 50/50 split between income funds & other index funds (those picked by RSI). These two groups are pretty uncorrelated with each other.
Today I want to review PowerShares DB Commodity Index Tracking (DBC). It had a good day today and it has been hovering near its rising upper trendline. I expect DBC to keep plodding along on its upward path. This holding may be a stellar performer. And hey, commodities should be in more demand as the global recovery unfolds.
There are no RSI picks today. Have a great weekend.
Stocks climb on earnings, drop in jobless claims – a look at PowerShares Financial Preferred (PGF) April 29, 2010
Posted by Marlowe Cassetti in PGF.add a comment
Stocks surged higher after another series of upbeat earnings reports and a reading on unemployment provided more evidence of an improving economy.
The Dow Jones industrials rose 122 points Thursday after the Labor Department said initial claims for unemployment benefits fell last week. And companies including Motorola, Time Warner Cable and Starwood Hotels & Resorts reported earnings that topped analysts’ forecasts.
It was the market’s second straight winning day after a plunge Tuesday that took the Dow down 213. Greece’s debt problems, one of the triggers for that slide, appeared less dire Wednesday and Thursday, and that allowed investors to focus on the growing signs of healing in the U.S. (market commentary & photo courtesy of AP)
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Another great market day which brought all RSI portfolio positions except one, into the green column. The exception is PowerShares Financial Preferred (PGF). PGF is not one of RSI’s picks but rather one of the funds that populate the group of high yield, “holding funds”. This fund invests in preferred shares of financial companies and it sports a yield of almost 8%. Unless circumstances dictate otherwise PGF is a keeper, even though it has not appreciated since I purchased it.
As the chart illustrates PGF has been slowly rolling over which is of some concern. It is a waiting and weighing game on this one. Time will tell.
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A final parting thought concerning lessons learned. Here is a blog worth reading on Lessons from 2008. Please click on this site and read this and soak it in. I’m hanging this on my bulletin board.
No RSI picks today. Catch you tomorrow to close out the week.
Stocks climb on earnings – "We have met the enemy… and he is us" April 28, 2010
Posted by Marlowe Cassetti in GDX.add a comment
Investors gave stocks a rebound after reassuring words from the Federal Reserve and another batch of upbeat earnings reports.
The Dow Jones industrials rose 53 points Wednesday, making back a quarter of the 213 they lost the previous day.
Investors were able to shake off Standard & Poor’s downgrade of Spain’s debt, the third European country in two days to have its rating lowered. Instead, they focused on the domestic economy.
The Dow rose 53.28, or 0.5 percent, to 11,045.27. The Standard & Poor’s 500 index rose 7.65, or 0.7 percent, to 1,191.36, while the Nasdaq composite index rose 0.26, or 0.01 percent, to 2,471.73. (market commentary & photo courtesy of AP)
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To quote the famous Pogo,
"We have met the enemy… and he is us"
Why do I bring this up? In the Manned Space Program, after every flight, we managers and engineers would pour over the telemetry records and look for anomalies. Stuff that didn’t go according to plan. We had Post Flight Analysis Teams. I had an active role working on the teams, and on a couple of flights I lead a team. I have been doing my own Post Flight Analysis by evaluating RSI’s picks and I discovered several lucrative trades that I did not take. I have poured over my personal records and tried to understand why I chose to sidestep those trades. It beats me why I didn’t follow my system. It was fear I can only guess. In addition to choosing not to take a trade, I also discovered I didn’t stick to placing and updating both my protective and profit target stops. I can attribute this problem to pure complacency. These were two major discipline problems that I need to and will correct. Do you see now why I quoted Pogo?
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Here is a chart of GDX which is one of the holdings in the RSI portfolio. It has been performing well lately, probably because of the global market jitters. It appears that GDX could extend its upward climb above and beyond the green trendline. I like the fact that the relative performance trend, the violet line, is maintaining its upward bias.
There are no new picks today. Catch you later.
Stocks pull back on Europe’s deepening debt woes April 27, 2010
Posted by Marlowe Cassetti in EUO.add a comment
U.S. stocks are following European markets lower after Portugal’s debt was downgraded, deepening fears that Europe’s debt problems are spreading.
Standard & Poor’s slashed Portugal’s credit rating Tuesday, sending stocks sharply lower across Europe. S&P also downgraded Greece’s debt.
Investors have been on edge about Greece’s fiscal crisis, and have worried that Portugal could be the next weak European economy to require help. That has undermined confidence in Europe’s shared currency, the euro. (market commentary & photo courtesy of AP)
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Okay, we had a market meltdown today. The RSI portfolio was hit hard, but less than the general market losses. The red numbers outnumbered the greens. The bright spot was EUO the ultra-short Euro currency fund. None of my stops were hit today, some were getting close. We shall see as the week progresses.
You can see that EUO is taking the Greek news favorably. There may be more of a move yet to come.
No new RSI picks today. Catch you later.
S&P dips as profit fears hit banks; CAT lifts Dow - April 26, 2010
Posted by Marlowe Cassetti in MVV, QLD, SSO, USO.add a comment
U.S. stocks edged lower on Monday as bank shares fell on fears that financial reform making its way through Congress will curb profits, while Caterpillar’s strong results buoyed the Dow.
A proposal to overhaul financial regulation that could restrict lucrative derivatives trading was expected to face a crucial Senate test vote on Monday and weighed on financial shares.
The Dow Jones industrial average edged up 0.75 point, or 0.01 percent, to close at 11,205.03. The Standard & Poor’s 500 Index dropped 5.23 points, or 0.43 percent, to 1,212.05. The Nasdaq Composite Index lost 7.20 points, or 0.28 percent, to 2,522.95.
On the New York Stock Exchange, nearly eight shares fell for every seven that rose, while on the Nasdaq, decliners beat advancers by a ratio of about 14 to 13.(market commentary & photo courtesy of Reuters)
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Today’s market action didn’t look too favorably on the RSI portfolio. Loss, not big, but losses nevertheless, hit the oil fund USO took a –1.47% hit. Likewise the ultra long funds SSO, MVV and QLD had losses of –0.5 to –0.7%. We have seen such good, consistent gains these past few weeks that this is a bit of a change. On balance, the portfolio has only 14% of the funds are net losing positions and the losses are less than –0.75%. Not too shabby, but as I have often stated it isn’t the short term results it is the longer term view that matters.
Otherwise there is really nothing else to report since there were no further RSI picks today. Catch you later.
Dow up for 8th straight week – Don’t confuse brains with a bull market April 23, 2010
Posted by Marlowe Cassetti in EUO, MVV, QLD, SSO.add a comment
Stocks rose Friday after a strong report on new home sales offset mixed news from corporate earnings reports. The market was held in check for much of the day after Greece decided to tap a bailout program.
The Dow Jones industrial average closed higher for the 11th time in the past 12 trading days. Friday’s gains wrapped up the index’s eighth consecutive weekly gain, which matches the longest winning streak for the Dow since a two-month stretch that ended in January 2004.
Gold and oil rose after the housing report, pushing shares of energy and materials stocks higher throughout the day. Dow rose 69.99, or 0.6 percent, to 11,204.28. The Standard & Poor’s 500 index rose 8.61, or 0.7 percent, to 1,217.28, while the Nasdaq composite index rose 11.08, or 0.4 percent, to 2,530.15.(market commentary & photo courtesy of AP)
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It is weeks like this that having a disciplined, objective trading system really pays off. Why do I say this? Because RSI makes the buy and sell decisions quite easy and as it turns out, rewarding. A few weeks ago RSI suggested moving into double long ETFs, which at the time appeared to be unreasonably risky. Yes, I didn’t immediately jump onto them, but rather I monitored them before taking a position in MVV, SSO, and QLD. Likewise with the platinum fund PGM has performed nicely. In fact all of RSI’s picks in the portfolio are in the green except for the ultra-short euro fund EUO which is in the red by 0.5%. Not too shabby.
I recently quoted the adage of “don’t confuse brains with a bull market”. This classic quote is attributed to Humphrey Neill. Neill was a stock market expert who literally wrote the book on contrarian investment thinking. It’s called The Art of Contrary Thinking. I am finding that most of RSI’s recommendations are contrary to what you see from most market pundits. This is an interesting point since the RSI modules were not specifically designed to reflect a contrary trade. However, some of RSI’s modules take positions after large price swings and on module is a counter-trend trade. But this isn’t the whole story. I’m still looking into this phenomenon. The skeptic in me is also thinking that I’m being fooled by confirmation bias. I need more data points before I can make any conclusions.
No picks to close out this week. Have a great weekend.
Stocks recover after Obama speech, home sales data – A taxing problem April 22, 2010
Posted by Marlowe Cassetti in Blogroll.add a comment
The stock market recovered from early losses and closed modestly higher Thursday after President Barack Obama’s speech on financial reform contained no unpleasant surprises.
The Dow Jones industrial average rose about 9 points after being down about 108. Broader indexes also turned higher.
The market fell sharply early in the day as Greece’s debt problems worsened and on fears that Obama would advocate tough restrictions on banks. When he didn’t, stocks recovered.
Prices also got a boost from a jump in sales of existing homes last month. (market commentary & photo courtesy of AP)
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As you know I’m a big fan of Exchange Traded Funds (ETFs). I do want to point out that holding ETFs in your portfolio can lead to some special tax problems. Today’s Wall Street Journal has an article on ETF Tax Traps. I won’t go into the details, you can read them for yourself. RSI has and will continue to recommend some of the funds mentioned in the article. This year I was flooded with a rash of K-1 forms, so I’m well aware of the tax headaches. You can avoid this problem by only investing in non-commodity and non-currency funds. So you have the option of sidestepping the “tax-problem” funds whenever RSI picks them. I’m trying to locate a web resource that flags these funds. I would appreciate your help in locating such a site.
There were no RSI picks today. Catch you after the market closes out the week.
Stocks muddled – Monitoring EUO April 21, 2010
Posted by Marlowe Cassetti in EUO, QLD.add a comment
The stock market stalled Wednesday after the glow of strong results at Apple Inc. and a few other companies faded.
The Dow Jones industrial average rose about 8 points, while broader indexes were mixed.
Technology and industrial shares drew buyers after Apple Inc. and Boeing Co. delivered results that topped expectations. Health care stocks lagged on concerns that new health care laws will hurt the industry’s profits. Financial stocks also fell after traders speculated on the fallout from a potential overhaul of government regulations
The Dow rose 7.86, or 0.1 percent, to 11,124.92, its third straight advance. The Dow has risen nine of the past 10 days. The broader Standard & Poor’s 500 index slipped 1.23, or 0.1 percent, to 1,205.94. The Nasdaq composite index rose 4.30, or 0.2 percent, to 2,504.61. (market commentary & photo courtesy of AP)
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And yesterday I mused about the NASDAQ market would be on a tear after Apple’s stunning earnings report. Not so. Anyway I need to leave the predictions to RSI. My acquisition of QLD – ProShares Ultra QQQ managed a 1% gain, but one day doesn’t really mean that much. The strategy is to grow the portfolio over the longer term. Remember … Keep your eye on the prize. The prize being a growing portfolio over the long term. You have to be your own judge as to how much to grow and over what time frame. Don’t be fooled into admiring your portfolio growing during a strong bull market. Remember the old adage of confusing brains with a bull market.
A quick review of another RSI pick, this time a short double leveraged currency fund, UltraShort Euro ProShares (EUO). RSI picked this fund in early April.
EUO has dipped below its ascending trend line, but troubles is the Euro zone continue to weigh on the Euro and consequently this UltraShort fund is recovering. Since it isn’t near to its stop loss level I will continue to monitor and sit tight.
No RSI picks tonight … catch you later.
Stocks advance on higher earnings – Bought GSG & QLD April 20, 2010
Posted by Marlowe Cassetti in GSG, QLD.add a comment
Stocks resumed their advance after investors got the numbers they wanted from first-quarter earnings reports.
The Dow Jones industrial average rose 25 points Tuesday for its eighth gain in nine days. Broader indexes posted 
bigger percentage increases after a mixed finish Monday.
Investors set aside some concerns about the government’s civil fraud case against Goldman Sachs Group Inc. and looked to profit numbers. Beyond those reports, a bounce in the price of crude oil after a two-week slide helped energy stocks.
After the closing bell, Apple Inc. said its first-quarter profit jumped 90 percent after it sold more of its iPhone smart phones. The stock rose about 6 percent in electronic trading after ending the regular session lower.(commentary & photo courtesy of AP)
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After monitoring these two ETFs for a few days now I bought them:
- QLD – ProShares Ultra QQQ
- GSG – iShares S&P GSCI Commodity
Here are the latest charts for the two:
As the charts show, both are in an uptrend. QLD is on a tear after a short pause and it should really take off when the Apple news hits the market tomorrow.
With these two new positions added to my portfolio, I’m really getting leveraged to the long side and heavy to the materials sector. I’m not too nervous, but I’m reassessing my stops and monitoring my positions. These new positions should enhance my portfolio performance as we go forward.
No new RSI pocks today … catch you tomorrow.
Stocks end mixed after financial stocks rebound – Aren’t these exciting times? April 20, 2010
Posted by Marlowe Cassetti in GSG, QLD.add a comment
The stock market ended mixed Monday after investors set aside some of their concerns about the government’s case against Goldman Sachs.
The Dow Jones industrial average rose 73 after sliding for much of the day. The advance followed a drop of 126 points Friday after the Securities and Exchange Commission filed civil fraud charges against Goldman Sachs related to mortgage investments.
The Standard & Poor’s index rose, while the Nasdaq composite index fell. Falling stocks narrowly outnumbered those that rose on the New York Stock Exchange, where volume came to 1.3 billion shares compared with 1.8 billion Friday.(market commentary & photo courtesy of AP)
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I had an opportunity to monitor RSI’s latest picks GSG and QLD throughout the day for a possible entry point. Both of these ETFs put in what could be a low today, but that is only one data point. I came close to buying QLD, but I chose to wait and see what the remainder of the week holds. Here is a quick look at these two ETFs.
These aren’t the usual charts that I publish. The time span are 60 minute bars over a one month period. Today’s trading activity are represented in the cluster of bars at the right end of the chart. You can observe today’s plateau in GSG price. Likewise QLD made a sizeable dip and recovery today. These gyrations now set the stage for the rest of the week. That is, the path of the future is measured against today’s action.
No new RSI picks today. Catch you later.
Aren’t these exciting times?
