Stocks end rough quarter with more questions – Buy PSQ or not buy PSQ? June 30, 2010
Posted by Marlowe Cassetti in DOG, PSQ, SH.add a comment
The stock market closed out a painful second quarter Wednesday and left investors with heavy losses and far more doubts about the economy than they had just months ago.
Stocks had their worst quarterly performance since the financial crisis. The Standard & Poor’s 500 index, considered by many professional investors to be the best measure of the market’s health, lost 11.9 percent, while the Dow Jones industrial average lost 10 percent. Both indexes are at their lows for 2010. (market commentary & photo courtesy of AP via Yahoo Finance)
*********************************************************************************
I have a sinking feeling that the charts are showing a definite rolling over and is headed lower, much lower. This brings me back to yesterday’s discussion PSQ – ProShares Short QQQ. Should I take this trade or not; should I trust the questionable module or not? This is all part and parcel of the psychology of investing.
In essence the chart of PSQ is quite similar to the charts of DOG & SH. So if I take this trade I will again have three risk units in the short camp. Is this too much risk in the short direction? I will sleep on it and see what tomorrow brings. The market futures point to a down opening. I think that going into this long weekend, the Thursday market cation will be a “tell” as to the future direction. We shall see.
No new RSI picks today … catch you later.
Wall Street tumbles as consumers wilt – Operation Sow’s Ear June 29, 2010
Posted by Marlowe Cassetti in PSQ.add a comment
Stocks extended losses on Tuesday and the S&P 500 index (^SPX – News) broke a key technical resistance as it fell below 1,040.78, its previous low point for 2010.
The S&P 500 index h
eld that level twice this year, and many market participants saw it as a near-term bottom.
The benchmark hit a near 8-month intraday low and is also on track to set a new 2010 closing low, below 1,050.47.
The Dow Jones industrial average (DJI:^DJI – News) dropped 276.98 points, or 2.74 percent, to 9,861.54. The S&P 500 fell 36.05 points, or 3.35 percent, to 1,038.52. The Nasdaq Composite Index (Nasdaq:^IXIC – News) slid 90.47 points, or 4.07 percent, to 2,130.18. (market commentary & photo courtesy of Reuters)
************************************************************************
A funny think happened when I ran RSI yesterday after the close. A module of questionable validity issued a buy on PSQ – ProShares Short QQQ. The past few days on the chart tells the tale.
If you had bought on the opening you would have a nice profit on this down day. However, I didn’t recommend this pick because of the mediocre performance of this module. It has an average trade expectancy of $321/trade for each $1000 risked. Compare this with expectancies of $975 to $1400 for RSI’s better modules. This module makes trades based on relative performance to a benchmark. Since the benchmark is the S&P500, which has been weak lately, it is reasonable that the module picked this short fund. But this gets me thinking that maybe I should take a closer look at this model’s code and maybe try to refine it to achieve better results. Let’s call it OPERATION SOW’S EAR. We shall see if we can transmute this sow’s ear into a silk purse! And, as always, I will keep you appraised of my progress on these matters.
******************************************************************************************
RSI had no picks today … catch you later.
Market sinks on fragile recovery fears – AAII Presentation June 24, 2010
Posted by Marlowe Cassetti in ECH, VXZ.add a comment
The S&P 500 fell for the fourth straight day on Thursday as fresh signs of consumer weakness and worries about stringent financial regulation provoked investors to unload positions.
The S&P 500 has lost 3.8 percent in four days, with retailers among the biggest decliners a day after discouraging outlooks from Bed Bath & Beyond (BBBY) and athletic apparel maker Nike Inc (NKE).
Nike shares were down 4 percent at $69.95 while Bed Bath & Beyond slumped 5.7 percent to $39.07. The S&P Retail index .RLX slid 2.8 percent.
“People’s general focus is on how fragile the recovery is, and recent data points are giving fodder to the double-dip camp,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
Banks were pressured by fears Congress would pass stringent rules in an overhaul of financial regulations. Lawmakers were on the verge of adopting a bill that could restrict banks’ trading and investment activities, crimping their profits. (market commentary & photo courtesy of Reuters)
*****************************************************************************
The RSI portfolio managed a small gain today. RSI’s recent picks of the VIX index, VXZ, gained 2.65% while the Chile Index ECH lost 0.62%.
Last night I gave my RSI presentation to the local AAII group. Just click HERE to view the material. Please send me any feedback on the “pitch” as I got some great questions from the AAII group. They brought up some interesting aspects and thus I have more homework to do.
There were no RSI picks today. Catch you later.
Stocks fall after China currency enthusiasm fades – Sold PSQ June 21, 2010
Posted by Marlowe Cassetti in PSQ, SH.add a comment
Stocks erased big gains Monday after investors lost some of their enthusiasm about China’s decision to let its currency appreciate against the dollar.
The Dow Jones industrial average fell about 8 points after climbing nearly 144 in early trading. The Dow had been up the past four days. The Standard & Poor’s 500 index also slid and the Nasdaq composite index fell after seven straight gains.
The initial reaction to China’s weekend announcement was that a stronger yuan compared with the dollar would allow U.S. manufacturers and exporters to be more competitive selling their products in China. But traders came to see the move as more of a long-term shift rather than something that would give the economy a boost now. (market commentary & photo courtesy of AP via Yahoo Finance)
*****************************************************************************
Today my position in Short QQQ ProShares (PSQ) was stopped out and sold. My other short position in Short S&P500 ProShares (SH) came close to also being stopped out today.
I’m in the process of completing my PowerPoint presentation on RSI to the Colorado Springs AAII group. Therefore I need to keep today’s blog short. I will try to make the charts available to the followers of this blog.
No RSI pick today. Catch you later.
Stocks post biggest two-week gain since November – Bought iPath S&P 500 VIX Mid-Term Futures ETN (VXZ) June 18, 2010
Posted by Marlowe Cassetti in DOG, VXZ.add a comment
Here’s something for investors beaten down by the market’s sharp declines this spring: The Dow Jones industrial average just had its best two weeks since November.
The Dow’s gain of 16 points on Friday was relatively modest, but it capped a surge of 5.2 percent over the past two weeks that puts the average nearly halfway back to the high for the year that it reached on April 26.
Stocks had a longer winning streak earlier this year, an eight-week stretch that ended in late April, but those gains were more gradual. Then a sharp drop in May and early June brought the Dow down as much as 12.4 percent below its 2010 high, a decline that market analysts call a “correction.” (market commentary & photo courtesy of AP via Yahoo Finance)
**********************************************************************************
After the market opened I monitored yesterday’s RSI pick of iPath S&P 500 VIX Mid-Term Futures ETN (VXZ). After it appeared to put in a low, I bought the required number of shares. We shall see how this trade transpires.
The RSI portfolio put in another small gain today, which was somewhat retarded by my three short funds. They are trading quite far above their stop loss levels. All three were picked by a module that favors long-term holding periods. One of the short holdings is DOG. Look at the chart below and it is amazing that I still hold a small gain on this position.
No RSI picks today. Have a great and safe weekend.
Stocks eke out gain after downbeat economic data – Bought FXY – RSI picks iPath S&P 500 VIX Mid-Term Futures ETN (VXZ) June 17, 2010
Posted by Marlowe Cassetti in FXY, VXZ.add a comment
The stock market managed a slender gain Thursday after traders shook off a pair of disappointing economic reports.
Traders began buying late in the session, although without the vehemence that has marked other final-hour moves in recent weeks. The Dow Jones industrial average closed up about 24 points after falling 90 early in the day, and scored its first three-day advance since April. The Standard & Poor’s 500 and Nasdaq composite indexes both rose a little more than a point.
The late rebound following downbeat employment and manufacturing news suggests that investors may be getting more confident about the economic recovery, said Philip Orlando, the New York-based chief equity market strategist at Federated Investors. (market commentary & photo courtesy of AP via Yahoo Finance)
*************************************************************************************
I decided to buy CurrencyShares Japanese Yen Trust (FXY) shortly after the opening. Unfortunately, the market mavens must have picked up on RSI’s yesterday pick of FXY and it gapped up on the open. Well whatever the reason for the move, I didn’t buy it at the best price of the day. Below is a short term chart of the recent price action. Today’s price jump is pretty obvious. Let’s hope Japan gets its act in gear and their currency goes to the moon and takes FXY with it.
Miracles never cease to happen. RSI has, for the second day in a row, made another pick:
Buy 51 shares iPath S&P 500 VIX Mid-Term Futures ETN (VXZ); set stop $19.60 below entry price; set trailing stop alert $58.81 above entry price; volatility = 9.30%.
As with yesterday’s RSI pick this selection was made by a trend following module. If you observe the chart below, I cannot see there the trend changed to an uptrend. This is puzzling, to say the least.
A quick observation … RSI utilizes a volatility based stop loss and a position sizing that risks 1% of a $100,000 portfolio. Since VXZ has a high volatility of 9.3%, only 51 shares can be risked. The math is interesting. For VXZ 51 shares @ $84.33 is an investment of $4,300 as contrasted with yesterday’s pick of FXY. This pick was for 166 shares at $108.42 requires $18,000 capital investment for this 2.2% volatility ETF.
Catch you later.
Stocks end flat; BP agrees to $20B victim fund – Buy CurrencyShares Japanese Yen Trust (FXY) June 16, 2010
Posted by Marlowe Cassetti in FXY.add a comment
BP’s agreement to put $20 billion into a fund for victims of the Gulf of Mexico oil spill lifted the stock market off its lows and sent the major indexes to a narrowly mixed finish.
The oil company also said Wednesday it has canceled a dividend payment totaling about $2.6 billion that was scheduled for June 21. It also won’t declare a dividend for the second and third quarters. Investors saw the news as an end to the uncertainty about BP’s stability, and that helped steady the overall market. The Dow Jones industrial average rose about 4 points, while the Standard & Poor’s 500 index fell less than a point and the Nasdaq composite index was virtually unchanged. (market commentary & photo courtesy AP via Yahoo Finance)
*********************************************************************
Well RSI woke up out of its recent slumber and made the following pick:
Buy 166 shares of CurrencyShares Japanese Yen Trust (FXY); set stop -$6.00 below entry price; initiate trailing stop $18.01 above entry price; volatility = 2.21%
Let’s look at a chart of FXY.
As you can see, despite its erratic price movement, FXY is making some upward headway since early June. On the negative side it has been doing this on declining volume plus the price bars are in consolidation. With those provisos, if you are interested in taking a position in the Japanese Yen you might want to wait until the price breaks out of the current consolidation. FYI, this fund pick was made by a “trend following” module and it detected a change in trend from sideways to up.
Catch you later.
Stocks see broad gains; Industrials, tech climb – Watching paint dry mode June 15, 2010
Posted by Marlowe Cassetti in Blogroll.2 comments
Industrial and technology stocks pulled the market sharply higher Tuesday after Boeing Co. said it was boosting production and an industry group forecast that demand for computers would increase.
The Dow Jones industrial average rose 213 points to its highest close since May 19 and had their third advance in four days. Major stock indexes rose more than 2 percent.
The advance was broad, but came on light trading volume. That’s a sign that many traders are staying out of the market while they wait to see if stocks will keep moving higher after weeks of erratic trading.
The Dow rose 213.88, or 2.1 percent, to 10,404.77. The broader Standard & Poor’s 500 index rose 25.60, or 2.4 percent, to 1,115.23, The Standard & Poor’s 500 index moved above its average close of the past 200 days, 1,108. The 200-day moving average is a technical level watched by many traders. Pushing above that is seen as a sign of strength in the market. Gains in stocks faded Monday in part after the S&P 500 index failed to top the mark. (market commentary & photo courtesy of AP via Yahoo Finance)
**************************************************************************************
Aside from me blogging about what the RSI portfolio did today, which positions gained and which lost, we really are in the “watching paint dry” mode. There were no RSI picks today so there is not a lot to discuss today. So if you notice a gap in this blog’s postings, it is because there isn’t anything to report on that day. I hope that will be okay with my loyal followers. If not, let me hear from you on this matter.
Catch you later … when there is something of interest to report.
Stocks falter in last hour; trader anxiety sets in June 14, 2010
Posted by Marlowe Cassetti in FHO, GDX, SH.add a comment
Stocks faltered in the last hour of trading Monday after investors gave in to anxiety about Europe’s economy.
The Dow Jones industrial average erased an early gain of 118 points to end down 20. The Standard & Poor’s 500 also fell slightly, while the Nasdaq composite rose less than a point.
Stocks began the day higher following a report that industrial production in the 16 countries that use the euro grew more than expected in April. That boosted confidence that Europe could solve its debt problems and pushed the euro above $1.22 for the first time since June 4.
The Dow fell 20.18, or 0.2 percent, to 10,190.89. The Dow hasn’t risen three straight days since April. The S&P 500 index fell 1.97, or 0.2 percent, to 1,089.63, while the Nasdaq composite index rose 0.36, or less than 0.1 percent, to 2,243.96. (market commentary & photo courtesy of AP via Yahoo Finance)
************************************************************************************
The first trading day of the week left the RSI portfolio with a small gain. The best fund gain was FHO at +1.55% while the biggest loser was GDX at -1.75%, with the rest of the portfolio falling in between these extremes. Throughout all this market turmoil of the recent weeks the portfolio has surprising been clawing back and following an upward trend.
RSI had no new picks today, so I want to review a recent RSI pick. It is SH – ProShares Short S&P 500 Fund. As the chart below shows, it has had a tough time of late.
We are a little bit underwater with this holding but it is a considerable way above its stop loss level. Thus we are continuing to hold this position in concert with the RSI methodology.
Catch you later.
Dow posts first weekly gain in nearly a month June 11, 2010
Posted by Marlowe Cassetti in PSQ, TLT.add a comment
The Dow Jones industrial average has logged its first winning week in a month.
The Dow rose 39 points Friday and ended the week with a gain of 2.8 percent, its best weekly advance since mid-February. The market slid in morning trading on disappointing retail sales numbers but started to pare its losses after a report found consumers are gaining confidence in the economy. The market climbed in the last hour of trading to end near the highs of the day.
Treasury prices rose, pushing down interest rates, after spiking on Thursday.
The Dow rose 38.54, or 0.4 percent, to 10,211.07. It had fallen nearly 90 points in morning trading. The Dow’s climb of 279 points, or 2.8 percent, during the week was its best since the week ended Feb. 19.
For the week, the S&P 500 index rose 2.5 percent and the Nasdaq rose 1.1 percent. (market commentary & photo courtesy of AP via Yahoo Finance)
************************************************************************************
At the close of the week, the RSI portfolio tacked on a nice gain. The best gainer was TLT and the worse was PSQ. But, on balance, the vast majority of the positions ended with gains, pushing the portfolio to the plus side.
At this time in the evening, I’m having some difficulty updating all the ETF data. At a preliminary level it appears there are no RSI picks. However their is a possibility that further analysis may yield a signal. If that occurs, I will post it to this blog. Have a great weekend and I’ll catch you later.
