Wall Street finishes mostly flat in thin trade – RSI picks three December 27, 2011
Posted by Marlowe Cassetti in FVD, IYR, XLU.add a comment
Stocks ended flat on Tuesday after fluctuating between small gains and losses in a light-volume session, as investors took a breather following a 5 percent rally last week.
The S&P 500 turned positive for the year on Friday, with improving economic data boosting equities. Gains were amplified by better-than-expected data on consumer confidence, which hit an eight-month high in December, as Americans grew more upbeat about the labor market and their financial situations.
But after a strong rally and with trading volume light, investors were reluctant to draw many conclusions from the move.
The Dow Jones industrial average .DJI dipped 2.65 points, or 0.02 percent, to 12,291.35 at the close. But the Standard & Poor’s 500 Index .SPX inched up 0.10 of a point, or 0.01 percent, to close at 1,265.43. The Nasdaq Composite Index .IXIC added 6.56 points, or 0.25 percent, to end at 2,625.20. (commentary & photo courtesy of Reuters)
Today RSI made the following buy recommendations:
- Buy 1666 shares of First Trust Value Line Dividend Index (FVD); Yield = 2.62%; Volatility = 4.1%
- Buy 394 shares of iShares Dow Jones US Real Estate (IYR); Yield = 3.95%; Volatility = 5.8%
- Buy 1040 shares of Utilities Select Sector SPDR (XLU); yield = 3.84% ; Volatility = 3.7%
Let’s look at these three picks.
Although FVD is a lower volatility fund, it is on a strong recovery. I like this chart and I like the yield too. It is a good risk off trade and I will buy it for the portfolio.
I like IYR because it diversifies the RSI portfolio with real estate exposure. If there is an economic recovery then real estate should benefit. Plus it is exhibiting good chart action and it has a great yield too.
I like this low volatility fund, XLU, because it too adds portfolio diversification by representing the utilities sector and its yield is good too. It may be trading at the high end of its ascending channel, but I don’t see a problem with taking a position in the fund.
Well that is all for tonight. Happy hunting.
Rally brings S&P closer to break-even for 2011 December 22, 2011
Posted by Marlowe Cassetti in IXJ.add a comment
Stocks rose on Thursday, putting the S&P 500 on the cusp of finishing out the year higher as another decline in jobless claims pointed to further improvement in the labor market.
The S&P rose for a third day in seasonally light volume that has contributed to sharp swings recently. With the benchmark index near break-even year-to-date and the Dow already higher for 2011, U.S. stocks appeared on track to outperform such major overseas markets as China, Brazil and Europe, all of which are down more than 10 percent year-to-date.
The Dow Jones industrial average .DJI was up 61.84 points, or 0.51 percent, at 12,169.58. The Standard & Poor’s 500 Index .SPX was up 10.29 points, or 0.83 percent, at 1,254.01. The Nasdaq Composite Index .IXIC was up 21.48 points, or 0.83 percent, at 2,599.45. (commentary & photo courtesy of Reuters)
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The RSI portfolio has a good day today, up 0.4% despite its 25% cash position. Seven of the eight positions were up today and all holdings are showing positive overall gains.
One fund that RSI recently recommended, iShares S&P Global Healthcare (IXJ) has been proceeding quite well. However, it still hasn’t been demonstrating improved money flow. I’m sure the holiday reduced volume is playing some part in this. I’m also reluctant to step in with the market in the holiday distraction phase with only one more trading day before this Christmas weekend.
Catch you later.
Oracle drags tech shares; euro off after ECB – Sold VXX December 21, 2011
Posted by Marlowe Cassetti in VXX.add a comment
The euro fell on Wednesday as doubts set in over whether fresh lending by the European Central Bank would be used to buy struggling euro-zone debt, while Oracle’s weak earnings weighed on technology stocks and kept Wall Street mostly flat.
Global shares edged higher, adding to the previous day’s strong gains, though volumes were thin as the year-end holidays approach.
Italian and Spanish government bond yields rose, snapping an eight-session down trend, while prices of German Bunds edged up.
The Dow Jones industrial average .DJI edged up 4.16 points, or 0.03 percent, to 12,107.74 and the S&P 500 Index .INX gained 2.42 points, or 0.19 percent, to 1,243.72.
But the technology-heavy Nasdaq Composite .IXIC dropped 25.76 points, or 0.99 percent, to 2,577.97. (commentary & photo courtesy of Reuters)
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Quite predictably, the volatility fund VXX hit its stops today and was stopped out. There were no RSI signals after the market close.
Wall Street rallies 3 percent in broad advance – New RSI healthcare pick IXJ December 20, 2011
Posted by Marlowe Cassetti in IXJ.add a comment
Stocks rallied nearly 3 percent on Tuesday as investors bought surging banks, homebuilders and networking companies, though low volume was seen as amplifying the market’s move.
Investors jumped on a banking sector that was already riding high, extending gains after the U.S. Federal Reserve released new capital proposals that turned out to be less onerous than the market feared.
The Dow Jones industrial average .DJI was up 335.73 points, or 2.87 percent, at 12,103.58. The Standard & Poor’s 500 Index .SPX was up 35.95 points, or 2.98 percent, at 1,241.30. The Nasdaq Composite Index .IXIC was up 80.59 points, or 3.19 percent, at 2,603.73.
About 6.83 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq, below last year’s daily average of 8.47 billion. (commentary & photo courtesy of Reuters)
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RSI made one buy recommendation today:
- Buy 179 shares iShares S&P Global Healthcare (IXJ); Volatility = 4.04%
As a side note, this fund pays slightly over 2% yield and its volume isn’t very large, but not thin. IXJ has made a good comeback since its fall that ended in early August 2011. It has been outperforming the market since early November and lately the Acc/Dist (the lower magenta line) has been weak. Before I would consider this fund, I want to see better money flow into IXJ.
Catch you later.
Banks sink Wall Street, BofA below $5/share – Bought IBB; Risk On or Risk Off? December 19, 2011
Posted by Marlowe Cassetti in IBB.add a comment
Banks dragged the stock market lower on Monday, with losses accelerating late after Bank of America’s stock price fell below $5.00 for the first time in nearly three years.
Warnings of deteriorating conditions in the euro zone and concerns about tougher capital rules that could cut into big banks’ profits pressured the financials throughout the day.
When BofA, the largest U.S. bank, plunged through $5, it ignited a late-day decline in the sector and the broader market, which fell 1 percent. More than 29 million shares of the stock traded, accounting for about 5.4 percent of the day’s total trading.
The Dow Jones industrial average .DJI was down 100.13 points, or 0.84 percent, at 11,766.26. The Standard & Poor’s 500 Index .SPX was down 14.31 points, or 1.17 percent, at 1,205.35. The Nasdaq Composite Index .IXIC was down 32.19 points, or 1.26 percent, at 2,523.14.
Adding to worries, Fitch warned on Friday it may downgrade the ratings of France and six other euro zone countries, saying a comprehensive solution to the region’s debt crisis was "technically and politically beyond reach".
More than three-fourths of companies traded on the New York Stock Exchange fell while 76 percent of Nasdaq-listed issues closed in negative territory. (commentary & photo courtesy of Reuters)
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RSI issued a buy recommendation Sunday:
- Buy 606 shares of iShares Nasdaq Biotechnology (IBB)
Today I opened a position in IBB because it has exhibited the potential start of a return to the upper trendline. I also like its diversification aspect for portfolio balance.
I subscribe to a newsletter from a group of respected money managers. They are now looking at the equity market as a glass half empty, so they are moving into more risk off trades. This aspect of the RSI portfolio resulted in the portfolio gaining a respectful +0.3% today while the overall market dropped over 1%. RSI is certainly picking risk off candidates.
Wall Street rally fades after warnings on Europe – Good day for RSI; bought CVY December 16, 2011
Posted by Marlowe Cassetti in CVY.add a comment
A rally in stocks fizzled, leaving major indexes with modest gains on Friday, as Wall Street was torn between hope that U.S. economic data signals better times ahead and fear Europe’s debt crisis will engulf world economies.
About 8.9 billion shares changed hands on the New York Stock Exchange, NYSE Amex and Nasdaq, higher than this year’s average of 7.9 billion.
Trading was choppy due to "quadruple-witching," the expiration of four types of futures contracts — equity options, stock index futures, stock index options and single stock futures.
After an early rally, buying dried up when rating agency Fitch warned of risk of recession in Europe.
The Dow Jones industrial average .DJI was down 2.42 points, or 0.02 percent, at 11,866.39. The Standard & Poor’s 500 Index .SPX was up 3.91 points, or 0.32 percent, at 1,219.66. The Nasdaq Composite Index .IXIC was up 14.32 points, or 0.56 percent, at 2,555.33.
For the week, the Dow fell 2.7 percent, the S&P lost 2.9 percent and the Nasdaq was down 3.5 percent. (commentary & photo courtesy of Reuters)
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The RSI portfolio put in a respective performance performance with all but one position, VXX, showing a gain today. During the day I opened a position in CVY, which I reviewed in yesterday’s blog. This holding adds to the income producing portion of the portfolio and slants it more to the “risk off” bias.
Have a great weekend.
Asian shares, euro gain after upbeat U.S. data – RSI picks two income funds December 15, 2011
Posted by Marlowe Cassetti in CVY, HDV.add a comment
Asian shares rose and the euro edged higher on Friday, as signs of strength in the U.S. economy temporarily broke through gloom over the European debt crisis that had driven a sell-off in riskier assets over the past three days.
U.S. stocks rose modestly on Thursday, after a fall in U.S. unemployment, a stronger-than-expected rise in regional factory activity and better-than-forecast results from FedEx Corp painted an improving picture of the economy. (commentary courtesy of Reuters)
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In the context of the current market conditions, RSI is having difficulties in identifying good candidate funds. So far the bond and other income ETFs are leading the candidate pack. Here are two promising funds:
- iShares High Dividend Equity (HDV); Yield = 4.0%
- Guggenheim Multi-Asset Income (CVY); Yield = 5.3%
Let’s look at these two charts:
HDV has been backing off its upper trendline and its A/D line has been falling. However, if and when it returns to its uptrend, I might consider it as a portfolio position.
The same comments generally apply to CVY although it is toying with its lower trendline. If it completes its uptrend resumes, it could be a good holding, especially with its 5.3% yield.
Catch you later.
Wall Street stacks up losses as global risks rise – DBO stopped out December 14, 2011
Posted by Marlowe Cassetti in DBO.add a comment
Stocks fell for a third day and hit their lowest level in two weeks on Wednesday as widespread risk aversion sank commodity prices, sent the euro to an 11-month low against the dollar and drove Italy’s borrowing costs to a euro-era high.
Investors are disappointed the European Central Bank is not buying more bonds of troubled European countries, a move that was widely seen as a requisite next step after leaders at last week’s EU summit agreed to strengthen fiscal unity in the bloc.
The Dow Jones industrial average .DJI dropped 131.46 points, or 1.10 percent, to 11,823.48. The Standard & Poor’s 500 Index .SPX fell 13.91 points, or 1.13 percent, to 1,211.82. The Nasdaq Composite Index .IXIC lost 39.96 points, or 1.55 percent, to 2,539.31. (commentary & photo courtesy of Reuters)
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The RSI portfolio only dropped –0.16%, much less than the –1.13% suffered by the overall market. Our position in PowerShares DB Oil (DBO) was stopped out as it dove almost 5% today. The next one may be XHB, the homebuilders ETF. It is closing in on its stop and if the market continues to drop it is a goner.
Hang in there and keep your powder dry.
Wall Street closes lower on Fed disappointment – GLD stopped out today; RSI picks JNK December 13, 2011
Posted by Marlowe Cassetti in GLD, JNK.add a comment
Stocks fell for a second straight day on Tuesday after the Federal Reserve gave no hints of new stimulus measures to offset the effects of the worsening European debt crisis.
Though the Fed did leave the door open to further easing next year, as it has done after recent meetings, it gave no indication it was any more inclined to provide new economic stimulus.
The Dow Jones industrial average .DJI slid 66.45 points, or 0.55 percent, to end at 11,954.94. The Standard & Poor’s 500 Index .SPX dropped 10.74 points, or 0.87 percent, to 1,225.73. The Nasdaq Composite Index .IXIC lost 32.99 points, or 1.26 percent, to close at 2,579.27. (commentary & photo courtesy of Reuters)
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The RSI portfolio position in SPDR Gold Trust (GLD) was closed today when it hit its stop loss sell level. It has been in a downward ratcheting trajectory for the past several days, so this was not too surprising when it hit its stop. The RSI portfolio had a very good day today despite the general market decline.
After the close RSI picked the following:
- Buy 375 shares SPDR Barclays Capital High Yield Bond (JNK); Volatility = 2.81%; Yield = 7.43%
I would like to see a better long-term uptrend established for this fund, but I guess beggars can’t be choosers. On balance, if this fund does punch through the upper green trendline and with the 7.43% yield it could be a great “risk off” investment. I like it.
Catch you later.
Wall St rises on EU summit hopes – Bought XHB December 6, 2011
Posted by Marlowe Cassetti in DBO, DTN, PJP, XHB.add a comment
Stocks rose on Tuesday as investors bet European leaders would take strong steps this week to end the region’s debt crisis, including bolstering its financial rescue fund.
The latest source of optimism came from a Financial Times report that European leaders will discuss boosting the firepower of the euro zone’s rescue fund at the summit. The report cited senior European officials.
The Dow Jones industrial average .DJI gained 52.30 points, or 0.43 percent, to 12,150.13. The Standard & Poor’s 500 Index .SPX.INX added 1.39 points, or 0.11 percent, to 1,258.47. But the Nasdaq Composite Index .IXIC dropped 6.20 points, or 0.23 percent, to 2,649.56. (commentary & photo courtesy of Reuters)
I have been monitoring the five funds recommended in the last blog. Monday I bought a position in SPDR S&P Homebuilders (XHB) as it was progressing nicely. Today the RSI portfolio was off a small amount < 0.3%, about the same amount the NASDAQ was down.
Here are a couple more funds to monitor that look attractive:
- PowerShares DB Oil (DBO)
- WisdomTree Dividend ex-Financials (DTN) yield = 3.41%
- PowerShares Dynamic Pharmaceuticals (PJP)
Take a look at these three and add them to your monitor list. I will be doing this too.
