Swinging for the fences – RSI picks Europe, water & ultra-mid September 24, 2010
Posted by Marlowe Cassetti in IEV, MVV, PIO.trackback
I had a long discussion with a follower to this blog. It started with his question that exemplified his interest in following RSI. He is confusion as to which of the RSI picks for him to select. I commented that he doesn’t have to swing at every pitch. Meaning, of course, that he has full discretion to pick and choose. As I was running down the many factors he should use, I soon realized that he was looking at RSI’s picks as a silver bullets. He wasn’t interested in swinging at every pitch but rather he was swinging for the fences. I tried to explain to him that RSI is designed for slow and steady rather than hitting homeruns. I think I got through to him
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The markets had a great day today to close out a great week. RSI keeps on with its picks:
- Buy 242 shares iShares S&P Europe 350 Index (IEV); Stop = -$4.13 Target = +$12.39 Volatility = 4.33%
- Buy 622 shares PowerShares Global Water (PIO); Stop = -$1.61 Target = +$4.82 Volatility = 3.67%
- Buy 263 shares ProShares Ultra MidCap400 (MVV); Stop = -$3.79 Target = +$7.58 Volatility = 8.14%
And their charts:
IEV is an okay Europe fund, but it is vastly underperforming the overall market. I would avoid it. Notice I’ve added a new line for accumulation/distribution which measures the money flow into and out of the funds.
PIO has previously been picked by RSI. Since then it has performed well. If you want to add this to your portfolio, wait for a pullback.
Lastly we have MVV, which is a twice leveraged fund. It sports a high volatility of 8.14%, so use great care with this. Again, wait for a pullback, which just might be underway.
Have a great weekend.
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