Wall St down, MF Global falls victim to Europe – RSI picks Indonesia & regional banks October 31, 2011
Posted by Marlowe Cassetti in IDX, KRE.add a comment
Wall Street closed its best month in 20 years on a down note on Monday as the failure of trading firm MF Global Holdings Ltd and new worries about Europe’s debt crisis hammered financial shares.
In a sign that Europe’s woes were far from over, Italian and Spanish bond yields soared, prompting the European Central Bank to buy the debt, while shares of European banks came under heavy selling pressure.
MF Global Holdings Ltd, the futures broker that made big bets on European sovereign debt, filed for Chapter 11 bankruptcy protection, making it the biggest U.S. casualty of the euro zone crisis. Trading in MF Global shares was halted.
The Dow Jones industrial average dropped 276.10 points, or 2.26 percent, to 11,955.01. The Standard & Poor’s 500 Index fell 31.79 points, or 2.47 percent, to 1,253.30. The Nasdaq Composite Index lost 52.74 points, or 1.93 percent, to 2,684.41. (commentary & photo courtesy of Reuters)
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The RSI portfolio had a great day by virtue of excellent performance in its two bond holdings ZROZ and BAB, up 6.84% and 1.95% respectively. After the close RSI made two new recommendations:
- Buy 450 shares Market Vectors Indonesia Index ETF (IDX); Volatility = 9.4%
- Buy 555 shares SPDR KBW Regional Banking (KRE); Volatility = 9.6%
FYI, both of these picks were generated by our "dip buying" module. So let’s take a look at the charts.
Both charts show that both funds have been in sharp uptrends and have dipped a bit in the last two days. This piqued the interest of RSI’s dip module.
I have been taking a greater interest in the long term view of any new RSI picks. I’m not very impressed with either of these long term prospects. If that changes, I might give them a more serious consideration.
Catch you later. Happy Halloween to all you goblins.
Wall Street, finishing flat, posts 4 weeks of gains – Bought QQQ October 28, 2011
Posted by Marlowe Cassetti in QQQ.add a comment
Stocks closed out a fourth week of gains in quiet fashion on Friday, edging higher as the market took a breather after rallying 3 percent on Europe’s deal to stem its debt crisis.
Though investors still have questions about implementing the deal, they appeared satisfied by Europe’s progress as stocks ended their longest weekly winning streak of the year.
The S&P 500 rose 3.7 percent for the week. The benchmark index had a seven-week rally that ended in January, but only two of the weeks were in 2011.
DJIA gained 22.56 points, or 0.18 percent, to 12,231.11. The Standard & Poor’s 500 Index .SPX.INX added 0.49 point, or 0.04 percent, to 1,285.08. The Nasdaq Composite Index .IXIC shed 1.48 points, or 0.05 percent, to 2,737.15. (commentary & photo courtesy of Reuters)
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Of all the recent RSI picks, the QQQ fund has shown good strength and it has established a new long-term uptrend. Therefore, I purchased the Qs for the RSI portfolio.
The QQQ has made quite a run from its local low at the start of this month, so the question is … how long will this last?
The better question is … Is this the continuation of a longer term trend that started in August? I think it is. We shall know the answer to this question in the fullness of time.
Enjoy your weekend.
Bare-bones EU debt deal news enough for buyers – Bought BAB October 26, 2011
Posted by Marlowe Cassetti in BAB.add a comment
Stocks rose on Wednesday as the slow progress from European leaders in resolving their debt crisis was enough to satisfy investors, even if early reports from an EU summit were short on detail.
The euro zone aims to leverage its 440 billion euro bailout fund "several fold," but details are not expected until November, according to a draft statement obtained by Reuters.
Stocks increased gains in the afternoon as the news emerged, continuing the market’s recent rally. The S&P has risen 9.5 percent for the month on growing optimism for a deal to address sovereign debt and bank balance sheets in Europe.
The Dow Jones industrial average gained 162.42 points, or 1.39 percent, to 11,869.04. The Standard & Poor’s 500 Index .SPX.INX rose 12.94 points, or 1.05 percent, to 1,241.99. The Nasdaq Composite Index .IXIC added 12.25 points, or 0.46 percent, to 2,650.67. (commentary & photo courtesy of Reuters)
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Sorry for my absence from this blog for a few days. RSI has been giving some indications of investing in a variety of bond and silver funds, some of which I have mentioned in the past few blogs. I have been narrowing the choices down by virtue of using long-term trend criteria. The silver funds appear to be in a downtrend and won’t be considered until they demonstrate a trend change. Bond funds, on the other hand, are exhibiting a good uptrend movement. Consequently, I purchased a position in PowerShares Build America Bond (BAB). Besides the uptrend, BAB pays a 5.17% yield. Not too shabby in this low interest rate enviroment.
As the chart illustrates, BAB has fallen to its lower trendline before recovering.
A weekly chart shows its long term trend. As long as this trend remains in place, I will keep it in the portfolio.
Catch you later.
Euro zone chatter triggers late selloff – RSI picks short the Yen October 19, 2011
Posted by Marlowe Cassetti in Blogroll, YCS.Tags: YCS
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Stocks fell on Wednesday as traders, after sitting on their hands for most of the day, jumped to sell in a hair-trigger reaction to fresh 
reports underscoring that Europe remains far from a solution to its debt crisis.
In a repeat of a now-familiar pattern, traders capitalized on headlines emerging late in the trading day, this time to push the market lower. With long-term investors largely on the sideline due to Europe’s uncertainty, the market remains susceptible to swift swings.
The Dow Jones industrial average .DJI was down 75.49 points, or 0.65 percent, at 11,501.56. The Standard & Poor’s 500 Index .SPX was down 15.63 points, or 1.28 percent, at 1,209.75. The Nasdaq Composite Index .IXIC was down 54.41 points, or 2.05 percent, at 2,603.02. (commentary & photo courtesy of Reuters)
RSI has a new buy recommendation:
- Buy 122 shares ProShares UltraShort Yen (YCS); Volatility = 7.97%
Since this an UltraShort fund it is leveraged against the rise in the Japanese Yen currency. This fund has been in a long term downtrend. This could be a reversal of the downtrend. If so, there may be a good opportunity. I will be looking closely at this opportunity.
Have a good day. I’ll catch you later.
S&P 500 index poised to extend streak – RSI picks Silver October 14, 2011
Posted by Marlowe Cassetti in DBS, SIVR.add a comment
With one-third of the Dow components and crowd favorite, Apple, reporting results next week, U.S. stocks are setting the stage for another week of gains.
After the steepest two-week rally in more than two years, the S&P 500 is at the top end of its range for the past two months.
The benchmark closed Friday above 1,220 for the first time since early August, and bets against the recent rally could start to pile up.
For the week, the Dow Jones industrial average .DJI gained 4.9 percent, the S&P 500 .SPX added 6 percent, and the Nasdaq Composite .IXIC rose 7.6 percent. (commentary & photo courtesy of Reuters)
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The RSI portfolio took another hit today as the VXZ fund was sold. This leaves only ZROZ in the portfolio. After the market close RSI made the following buy recommendations:
- Buy 125 shares PowerShares DB Silver (DBS); Volatility = 11.8%
- Buy 221 shares ETFS Physical Silver Shares (SIVR); Volatility = 11.8%
These two funds are almost identical since they both track the physical metal. SIVR has an average volume over 5 times that of DBS. All other things being equal, go with SIVR. The last chart is the longer term (weekly) chart. It is concerning that since the end of May 2011, it is making lower highs and lower lows. This price action suggests a continuation of the downtrend or a sideways movement that was started in May.
Have a great weekend and enjoy the lovely fall weather.
JPMorgan drags blue chips down; Google up late – RSI picks QQQ October 13, 2011
Posted by Marlowe Cassetti in QQQ.add a comment
The Dow and S&P 500 slipped on Thursday after JPMorgan’s earnings and China’s soft trade data revived worries about the impact of slower growth on profits.
The declines put an end to three straight days of gains that capped off a 12 percent increase in the S&P 500 since hitting a low on October 4. The Nasdaq stayed in positive territory, helped by semiconductor shares.
The Dow Jones industrial average .DJI fell 40.72 points, or 0.35 percent, to end at 11,478.13. The Standard & Poor’s 500 Index .SPX shed 3.59 points, or 0.30 percent, to 1,203.66. But the Nasdaq Composite Index .IXIC gained 15.51 points, or 0.60 percent, to close at 2,620.24. (commentary & photo courtesy of Reuters)
The RSI portfolio made a small gain today, but it has been battered by the recent market gyrations. However RSI made a buy recommendation that is not its usual short fund bent.
- Buy 112 shares PowerShares QQQ (QQQ); Volatility = 6.24%
This very popular fund has been recently range bound between 50 on the low side and 57 at the top. It is pushing the high end of the range. A beak-out through 57 would be a great buy trigger. Likewise, a drop from this level and subsequent recovery would be a good buying opportunity. Take your pick.
I have included a StockCharts “weekly gallery” to illustrate the QQQ longer term trend. It appears to be at the cusp of returning to a positive trend.
I will certainly be keeping an eagle eye on the progress of QQQ.
Wall Street holds steady, ready for earnings – VXZ stopped out October 11, 2011
Posted by Marlowe Cassetti in AMJ, VXZ.add a comment
U.S. stocks took a breather on Tuesday after the best five days for the S&P 500 in more than two years as investors look to earnings for a reason to extend the market’s rebound.
Stocks wavered between gains and losses throughout the session. Markets have been reacting to news from the euro zone where officials are trying to contain a debt crisis that threatens large European banks and global financial stability.
The Dow Jones industrial average .DJI was down 16.88 points, or 0.15 percent, at 11,416.30. The Standard & Poor’s 500 Index .SPX was up 0.65 point, or 0.05 percent, at 1,195.54. The Nasdaq Composite Index .IXIC was up 16.98 points, or 0.66 percent, at 2,583.03. (commentary & photo courtesy of Reuters)
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With the market volatility dropping today my holding in VXZ was stopped out. The cash reserves are now risen to 49%. The portfolio dipped slightly today.
After the close there were no RSI buy signals except for an indication pointing to JPMorgan Alerian MLP Index ETN (AMJ). This will be a fund I will be monitoring on a long term basis.
Wall St extends rally on euro-zone hopes – SDS, SH & RWM stopped out October 10, 2011
Posted by Marlowe Cassetti in RWM, SDS, SH.add a comment
U.S. stocks jumped 3 percent on Monday, extending gains into a second week as a pledge by German and French leaders boosted hopes that the euro-zone debt crisis may be resolved.
The gains lifted the S&P 500 above its 50-day moving average for the first time since late July, a bullish technical signal. The S&P 500 is now up about 11 percent since its low on Tuesday, when it briefly fell into bear-market territory.
The Dow Jones industrial average .DJI surged 330.06 points, or 2.97 percent, to end at 11,433.18. The Standard & Poor’s 500 Index .SPX climbed 39.43 points, or 3.41 percent, to 1,194.89. The Nasdaq Composite Index .IXIC shot up 86.70 points, or 3.50 percent, to close at 2,566.05. (commentary & photo courtesy of Reuters)
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Today’s market rally, or should I say explosion, sent a knife through the RSI portfolio. Three positions SDS, SH and RWM were stopped out since they were short funds. The lesson here was lack of portfolio diversification. Leaning in one direction can lead to being wrong footed.
There we no new RSI signals today.
Europe hopes, data lift stocks for week – RSI reaffirms ZROZ October 7, 2011
Posted by Marlowe Cassetti in ZROZ.add a comment
After nearly falling into a bear market, U.S. stocks finished the week higher on Friday, building gains on encouraging jobs data and hopes that Europe was dealing with its debt crisis.
Wall Street’s wild week began with cascading losses that brought stocks to their worst levels in 13 months. After rebounding Tuesday, the S&P 500 rose about 5 percent from its worst levels as short-sellers rushed to cover losses on new optimism about Europe.
For the week, the Dow rose 1.7 percent, the S&P 500 gained 2.1 percent and the Nasdaq was up 2.7 percent.
For Friday, The Dow Jones industrial average .DJI slipped 19.98 points, or 0.18 percent, to 11,103.35. The Standard & Poor’s 500 Index .SPX.INX fell 9.51 points, or 0.82 percent, to 1,155.46. The Nasdaq Composite Index .IXIC lost 27.47 points, or 1.10 percent, to 2,479.35. (commentary & photo courtesy of Reuters)
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The RSI portfolio, which moves counter to the overall market, was hit this week as the major indices advanced. Today was the exception. Yesterday RSI gave another buy signal on PIMCO 25+ Yr Zero Coupon U.S. Treasury Index ETF (ZROZ). This fund is already in the RSI portfolio and it is up a whopping 22%. Today, ZROZ ended down –1.3%, almost touching its lower trendline. I’m not sure I would add to this position since it has had a big run since the end of July when it was about $70/share. Currently it pays a 2.85% yield.
Have a great weekend.
Wall Street hits 13-month low on Europe woes – RSI portfolio up huge; Sold PHB and bought EUO October 3, 2011
Posted by Marlowe Cassetti in EUO, PHB.add a comment
Stocks slumped in heavy volume to a 13-month low on Monday as investors dumped bank shares on fears that Greece’s worsening financial crisis could cause a large European lender to fail.
Investors pegged losses to the sharp fall in Franco-Belgian financial group Dexia, which fell 10 percent after a Moody’s warning about it
s liquidity due to concerns about exposure to Greece.
Markets have feared European officials will be unable to prevent Greece’s fiscal crisis from turning into a global banking crisis. Greece said it will miss its deficit targets this year and next, which could limit the country’s ability to receive more aid.
U.S. banks have become a target for speculators. Morgan Stanley closed at its lowest since December 2008, and the cost to insure its debt has jumped as other banks hedge counterparty exposures and traders bet on the situation worsening.
The recession that wiped 12 years of gains off the S&P 500 was caused in part by a credit crisis.
The Dow Jones industrial average dropped 258.08 points, or 2.36 percent, to 10,655.30. The S&P 500 fell 32.19 points, or 2.85 percent, to 1,099.23. The Nasdaq Composite lost 79.57 points, or 3.29 percent, to 2,335.83.
The S&P 500 broke through a previously strong technical support level near 1,120 before hitting a 13-month intraday low just below 1,100. (commentary & photo courtesy of Reuters)
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Over the weekend I was scanning the ETF landscape; it sure looks bleak except for the inverse and government bond funds. The RSI position in PHB hit its stop loss point and was sold. However, at the end of trading today, the RSI portfolio soared +2.6%. All positions are now in the green. Today it paid to be invested in short and ultra short funds.
A prototype RSI module gave the following buy signal:
- Buy 700 shares ProShares UltraShort Euro (EUO)
Since the RSI portfolio has a lot of short funds I chose to buy less than the full –1.0R allotment of shares. If you view a weekly chart of EUO you will see that it has broken out of a downtrend that started in June 2010. This new uptrend may be the start of a major move. Remember, we are talking about a fall in the Euro currency against the US dollar. The chart illustrates the current uptrend that was started in late August ‘11. This trend has outperformed the US market (the mauve line). Money has started to flow into this fund (aqua line) suggesting it is under accumulation.
The news today was all about the woes in Europe and speculation as to what will be the ultimate effect on the euro. We shall know in the fullness of time.
Due to technical difficulties, I do not have a complete set of results for RSI tonight. If there are any new picks I will post them in the morning.
