Wall Street ends worst quarter since 2008 meltdown – ECRI calls recession; Bought VXZ, TLT & MYY; RSI portfolio soars 1.54% today September 30, 2011
Posted by Marlowe Cassetti in MYY, TLT, VXZ.add a comment
Stocks ended their worst quarter since the depths of the 2008 credit crisis, crippled by Europe’s debt debacle, a U.S. credit downgrade and a sputtering global economy.
A steep slide on Friday closed out a fifth month of losses as weak economic data from China sparked fears of a global economic slow
down while investment bank Morgan Stanley plummeted on concerns about its exposure to European banks.
The S&P 500 index has lost more than 14 percent this quarter and over 7 percent in September alone. As of Thursday, Wall Street’s deep downturn in the third quarter wiped out $2.2 trillion of the Wiltshire 5000 index — the broadest measure of U.S. stocks.
The Dow Jones industrial average dropped 240.60 points, or 2.16 percent, to 10,913.38. The Standard & Poor’s 500 Index fell 28.98 points, or 2.50 percent, to 1,131.42. The Nasdaq Composite Index lost 65.36 points, or 2.63 percent, to 2,415.40.
Wall Street’s "fear gauge," the CBOE volatility index, or VIX, rose more than 10 percent to 42.96, its highest close since mid-August and indicating investors expect more volatility ahead. (commentary & photo courtesy of Reuters)
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Today the Economic Cycle Research Institute (ECRI) declared that the US has slipped back into another recession. ECRI has a very good record in calling recessions. This call motivated me to add to the VXZ position and open a new position in MYY. Both of these are RSI’s recent picks. Additionally, I added TLT to the portfolio as a defensive position. These new acquisitions dropped the cash reserves to 21%. At the end of the day the RSI portfolio soared 1.54%. Seven of the eight positions had 2.5 to 5% gains today. A happy ending to a dismal market week.
RSI had no new picks today. Have a happy weekend. See you at Apple Days in Penrose on Saturday,
Dow, S&P rise in wild day, Nasdaq takes China hit – RSI picks VXZ September 29, 2011
Posted by Marlowe Cassetti in VXZ.add a comment
Stocks mostly rose in a volatile session on Thursday as stronger-than-expected economic data and German approval of a beefed-up euro-zone crisis fund relieved two of the worst fears hanging over the market.
But the Nasdaq was knocked lower by a brutal sell-off in U.S.-listed Chinese stocks on news of a probe into accounting practices and profit taking in Apple shares after a huge gain during the quarter.
The Dow Jones industrial average .DJI gained 143.08 points, or 1.30 percent, to 11,153.98. The Standard & Poor’s 500 Index .SPX gained 9.34 points, or 0.81 percent, to 1,160.40. But the Nasdaq Composite Index .IXIC dropped 10.82 points, or 0.43 percent, to 2,480.76. (commentary & photo courtesy of Reuters)
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The RSI portfolio was dead flat today. However wasn’t asleep today since it had a buy pick:
- Buy 71 shares iPath S&P 500 VIX Mid-Term Futures ETN (VXZ); Volatility = 8.0%
It turns out that the RSI portfolio already holds this fund and it has been an excellent gainer, 11% since it was purchased on August 30th. It still looks good although money flow (lower plot) is fading. But can volatility keep increasing? We shall see.
Stocks drop, led by commodities on economic fear – RSI soars, bought SH & RWM; new pick MYY September 28, 2011
Posted by Marlowe Cassetti in MYY.add a comment
Commodity-related stocks drove Wall Street lower on Wednesday as stiff declines in energy and metals prices underscored investor con
cerns about global economic weakness and Europe’s raging debt crisis.
A sharp 7 percent dive in the price of copper, seen as a leading indicator for the economy, rattled investors and led to a drop of 4.5 percent in the S&P materials index. Freeport-McMoRan Copper & Gold Inc fell 7.3 percent to $32.29.
Investors were on a knife edge as inspectors from the EU and IMF headed to Greece to scrutinize austerity plans while German Chancellor Angela Merkel worked to defuse a revolt within her government ahead of a vote to expand Europe’s bailout fund on Thursday.
The Dow Jones industrial average dropped 179.79 points, or 1.61 percent, to 11,010.90. The Standard & Poor’s 500 Index dropped 24.32 points, or 2.07 percent, to 1,151.06. The Nasdaq Composite Index dropped 55.25 points, or 2.17 percent, to 2,491.58. (commentary & photo courtesy of Reuters)
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RSI had an excellent day today while the market dove. The non-cash holdings gained 1.6% today. I also bought two of RSI recent picks SH & RWM. This increased the bear portfolio bias. Yes, this is taking a risk by betting on a continued bear market. It also doesn’t lead to a very diversified portfolio, but maybe that is okay in this current market environment.
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Today RSI made the following pick:
- Buy 154 shares ProShares Short MidCap400 (MYY); Volatility = 7.3%
What, another short the index fund? I guess so, since the market action is certainly leaning that way. MYY is looking like it wants to move up from its ascending trendline. It just might eclipse its prior high of $75, but it might take a while and a strong bear market. Right now I have to see more of a bear trend to buy this fund and see more money flow into MYY (see lower A/D line).
Catch you later.
Stocks gains on Europe, Accenture rises late – RSI picks SH September 27, 2011
Posted by Marlowe Cassetti in SH.add a comment
Stocks rose for a third day on Tuesday on efforts by euro-zone officials to solidify the region’s rescue fund and alleviate a sovereign debt crisis, boosting optimism.
But equities ended off their highs for the day after a report suggested cracks were emerging in a previously agreed deal to tackle the crisis.
A successful solution to Europe’s sovereign debt crisis would take the pressure off banks worried about funding and remove a threat to economic growth. Rising hopes for an agreement have helped push the S&P 500 up more than 4 percent since Thursday’s close.
The Dow Jones industrial average finished up 146.83 points, or 1.33 percent, at 11,190.69. The Standard & Poor’s 500 Index was up 12.44 points, or 1.07 percent, at 1,175.39. The Nasdaq Composite Index was up 30.14 points, or 1.20 percent, at 2,546.83. (commentary & photo courtesy of Reuters)
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The market rally these past three days have hit the RSI portfolio. With that as a background, RSI has picked another “short the market” fund. Here is the latest:
- Buy 137 shares ProShares Short S&P500 (SH); Volatility = 6.5%
The RSI portfolio currently hold SDS the ultra short fund and back on Sept. 23 RSI picked the short Russell 2000 fund RWM. Thus this current buy pick adds to RSI’s bearish bias. SH may be poised for a move up, it took a hit today. The same goes for SDS and RWM; the charts look alike. But what if the bear market resumes???? We shall know in the fullness of time.
I’ll catch you later.
Wall Street stabilizes after disastrous week – RSI picks RWM; Stops hit on PCY & SIVR September 23, 2011
Posted by Marlowe Cassetti in RWM.add a comment
The Dow Jones industrial average on Friday suffered its worst week since the depths of the financial crisis in 2008, stung by severe anxiety over Europe’s spiraling debt crisis and a warning from the Federal Reserved about the U.S. economy.
But stocks ended higher after a disastrous four days of selling, which helped push down the S&P 500 index 6.6 percent for the week.
Volatility spiked in a revival of the tumult seen in August. Fears of a Greek default and the Federal Reserve’s gloomy prognosis for the U.S. economy spurred heavy selling in equities.
Stocks seesawed between gains and losses on Friday, but the S&P was able to hold above the August 8 low of 1,119, a key support level that served as a trigger for buyers during the week.
The Dow Jones industrial average gained 37.19 points, or 0.35 percent, to 10,771.02. The Standard & Poor’s 500 Index gained 6.83 points, or 0.60 percent, to 1,136.39. The Nasdaq Composite Index gained 27.56 points, or 1.12 percent, to 2,483.23. (commentary & photo courtesy of Reuters)
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It was a tough day for RSI as the portfolio shed PCY and SIVR when they hit their stops. Selling these two funds raised cash reserves to 60%. The remainder of the portfolio is invested:
- PowerShares Fundamental High Yield Corp Bond (PHB)
- ProShares UltraShort S&P500 (SDS)
- iPath S&P 500 VIX Mid-Term Futures ETN (VXZ)
- PIMCO 25+ Yr Zero Coupon U.S. Treasury Index ETF (ZROZ)
As you can see, this portfolio is not poised for a bull market. So today’s pick will add to that bias:
- Buy 139 shares ProShares Short Russell2000 (RWM); Volatility = 8.1%
Okay, let’s look at the chart. This fund is very volatile as illustrated by the chart. The Russell 2000 is an index of small capitalization stocks. If we fall into another recession this fund, that shorts the R2k will rise. In the past five days RWM has taken off, so you might want to wait and buy this on a dip (if it ever materializes). Bottom line this a bet on another recession.
Have a great weekend.
Market’s 3 percent fall suggests deepening worry – RSI soars September 22, 2011
Posted by Marlowe Cassetti in SGG.add a comment
Stocks plunged on Thursday, extending a selloff to four days, as policymakers’ failure to arrest global economic stagnation sent markets spiraling downward.
The heavy volume of Thursday’s plunge signaled investors are selling in anticipation of more losses. Wall Street’s "fear gauge," the CBOE Volatility Index, jumped 12 percent, giving the index its biggest 2-day percentage spike in a month as investors protected against more losses to come.
Energy and materials shares were among the hardest hit areas on worries of slowing worldwide demand. Signs of a slowdown in China fed those fears.
The Dow Jones industrial average dropped 391.01 points, or 3.51 percent, to 10,733.83. The Standard & Poor’s 500 Index lost 37.20 points, or 3.19 percent, to 1,129.56. The Nasdaq Composite Index slid 82.52 points, or 3.25 percent, to 2,455.67. (commentary & photo courtesy of Reuters)
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The headlines above tell it all. The market is tanking. The RSI portfolio is again soaring, up 0.8% buoyed by big gains in ZROZ, SDS and VXZ. However, the silver fund SIVR took a hard hit. Also the sugar fund SGG was stopped out. The net result of all this is a 1.4% gain in the non-cash portion of the RSI portfolio. The portfolio’s cash reserves have grown now to 42.7%.
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No new RSI signals after the markets close. Catch you later.
Wall Street sinks 3 percent after Fed cites economic "risks" September 21, 2011
Posted by Marlowe Cassetti in CORN, NUGT.add a comment
Stocks suffered their worst drop in a month after the Federal Reserve said there were "significant downside risks" to the economy even as it took another stab at boosting growth.
Selling accelerated as volume spiked in the last hour of trading, with banks and insurers leading the decline, as the KBW Bank index .BKX slid 5.5 percent and the KBW Insurance index .KIX off 5.2 percent.
The Fed said economic growth remains slow, and recent indicators point to continuing weakness in overall labor market conditions, and the unemployment rate remains elevated.
The Dow Jones industrial average .DJI dropped 283.82 points, or 2.49 percent, to 11,124.84. The Standard & Poor’s 500 Index .SPX lost 35.33 points, or 2.94 percent, to 1,166.76. The Nasdaq Composite Index .IXIC fell 52.05 points, or 2.01 percent, to 2,538.19. (commentary & photo courtesy of Reuters)
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Sorry for my delay in reporting on RSI. In the past couple of days stops were hit on NUGT and CORN. Last week’s market rally was a tough week for the RSI portfolio as it ran counter to the market rally. Today was a similar story as the non-cash portfolio portion soared 1.7% while the market tanked.
There have been no new RSI buy candidates. I’ll let you know as soon as it is revealed to me.
Push for action in euro zone fuels gains – RSI picks PHB September 15, 2011
Posted by Marlowe Cassetti in PHB.add a comment
Stocks rose 1 percent in a third day of gains on Wednesday after European leaders displayed new urgency in efforts to contain the euro zone debt crisis.
German and French leaders called on Greece to implement all financial reforms "strictly and effectively," a German government spokesman said.
Adding to the relief for investors, Italian Prime Minister Silvio Berlusconi won a confidence vote on an austerity plan for Italy, the euro zone’s third-largest economy.
The Dow Jones industrial average .DJI was up 140.88 points, or 1.27 percent, at 11,246.73. The Standard & Poor’s 500 Index .SPX was up 15.81 points, or 1.35 percent, at 1,188.68. The Nasdaq Composite Index .IXIC was up 40.40 points, or 1.60 percent, at 2,572.55.
The S&P 500 is still down 11.6 percent since July 22, roughly when the market’s recent slide began. (commentary & photo courtesy of Reuters)
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Another tough day for the RSI portfolio since its holdings are contrary to the current market short-term trend. But we are sticking to our guns and letting the system run. RSI did cough up another pick:
- Buy 4009 shares of PowerShares Fundamental High Yield Corp Bond (PHB)
Yes, that is a lot of shares, but it is because of its low volatility. If this is too large an investment you can always buy less than the –1.0R risk amount of shares. The chart looks good (positive money flow and it is beating the market) and PHB has a yearly yield of 5.88%, payable monthly. The only downside I see is that this is a bet that corporate America will do well moving forward. This kind of discounts the double dip recession camp. But it is drawing in the money.
Have a good day and I’ll catch you later.
Bets on euro zone progress boost Wall Street – RSI picks EUM September 13, 2011
Posted by Marlowe Cassetti in EUM.add a comment
Stocks gained on Tuesday as investors bought shares beaten down in recent weeks and bet European leaders would take action soon to ease the Greek debt crisis.
Worries the euro zone crisis could tip the global economy into another recession have pummeled stocks, though the selling has reached a level that some argue a Greek default is priced in to the market.
The Dow Jones industrial average .DJI was up 44.73 points, or 0.40 percent, at 11,105.85. The Standard & Poor’s 500 Index .SPX was up 10.60 points, or 0.91 percent, at 1,172.87. The Nasdaq Composite Index .IXIC was up 37.06 points, or 1.49 percent, at 2,532.15. (commentary & photo courtesy of Reuters)
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Today’s good market showing hit the RSI portfolio as corn, zeros & ultra-short S&P funds sank. On the plus side were good gains in the gold and silver funds. After a long silence RSI made the following pick:
- Buy 179 shares ProShares Short MSCI Emerging Markets (EUM); Volatility = 6.6%
I’m not too thrilled with the EUM chart, see below. Is it in an uptrend or in a downtrend? And which way will this tug of war be resolved? I guess I will monitor this fund and see where its path goes.
Catch you later.
Wall Street tumbles as ECB discord stirs broad fears September 9, 2011
Posted by Marlowe Cassetti in Blogroll.add a comment
Stocks tumbled more than 2 percent on Friday after the top German official at the European Central Bank resigned in protest of the bank’s bond-buying program, which has been a major tool in fighting the region’s debt crisis.
The resignation of Juergen Stark from the ECB throws into question policymakers’ ability to deal with Europe’s debt crisis, a problem that could engulf a world economy already teetering on the brink of recession.
Investors’ rising fears were highlighted by a 12 percent jump in the market’s main measure of expected turbulence, the VIX volatility index .VIX. The VIX neared 40, close to its highest level this year, as it marked its biggest jump in three weeks.
The Dow Jones industrial average .DJI dropped 303.68 points, or 2.69 percent, to 10,992.13. The Standard & Poor’s 500 Index .SPX dropped 31.67 points, or 2.67 percent, to 1,154.23. The Nasdaq Composite Index .IXIC dropped 61.15 points, or 2.42 percent, to 2,467.99. (commentary & photo courtesy of Reuters)
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For the second straight day the RSI portfolio powered ahead of the market averages (which took a drubbing today). The non-cash portion gained +0.6% far exceeding the –2.7% loss of the broad market. It was powered by great gains in the ultra short S&P 500 and VIX funds. It was retarded by losses in gold and silver holdings. Five greens and three reds for the eight positions. I sold the position in DBB, as directed by RSI yesterday. Its +0.2R gain evaporated to zero at the market open. You can’t win them all. Cash reserves are now at 31%.
With this negative tone to the market I fear we may be entering another bear market. I don’t know what the future will be …. bull, bear or neutral. That is the beauty of using a trading system. No prediction required. It is such a relief to shut the market noise off and go with the flow.
No new RSI signals today. Have a great weekend.
