Market ekes out a small gain – RSI likes iShares MSCI Spain Index (EWP) & CurrencyShares Euro Trust (FXE) October 26, 2010
Posted by Marlowe Cassetti in EWP, EWT, FXE, RJA.trackback
And the RSI portfolio did likewise .. a tiny gain. But better than a loss.
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I want to take this time to discuss some portfolio performance observations. As we approach the end of the month we have been enjoying a nice bull market. Thus the RSI portfolio should reflect the rosy scenario and it indeed does just that. In the next few days I will review each RSI picks that were incorporated into the portfolio. I will not review the “holding funds” because they were not picked by RSI. They were selected by me to provide a bond like portfolio allocation and as a parking place for monies to be allocated to be reinvested with RSI’s picks.
The first fund for review is ELEMENTS Rogers Intl Commodity Agriculture ETN (RJA) with some connection to the famous trader Jim Rogers. RJA was purchased on 08/19/10 and today it has risen 17.62%. While this gain is great, it still has a way to go to gain +2R. The chart below shows the buy arrow in August.
The next fund to review is iShares MSCI Taiwan Index (EWT) that was added to the RSI portfolio on July 21, 2010. It has gained 13.33% and it appears to have recovered and doing well with the decline of the US dollar. This ETF gives a good example of how the RSI trading works. When RJA was purchased in July a stop loss of –1R was placed and a +2R alert was also set. Neither of these two price levels were triggered since the position was initiated. I could have easily panicked and sold out on those two corrections. A good object lesson.
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And now for today’s RSI picks:
- Buy 181 shares iShares MSCI Spain Index (EWP); Stop = -$5.51 Target = +$16.53 Volatility = 5.18%
- Buy 128 shares CurrencyShares Euro Trust (FXE); Stop = -$7.76 Target = +$23.29 Volatility = 2.25%
Here we have the pick of a higher volatility single country European fund and a lower volatility European currency fund. Let’s look at EWP first. It has been moving up in a narrow range channel and beating the market since late August. Money flow is positive, but falling off lately. If you are interested in theis fund, wait until it bonces off the lower channel line.
Next is FXE which tracks the Euro. On all fronts it definitely doesn’t look like a strong fund. It isn’t beating the market and the money is falling off. It has bounced off its upper trendline and appears to be headed lower. There must be some important factor that RSI likes that I’m missing. Time will decide that question.
Goodnight and I’ll catch you later.
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