Rocket Science Investing with ETFs

Fed and Apple restart Wall Street’s advance – RSI picks 6 funds today

Marlowe Cassetti — Thu, 26 Jan 2012 06:12:46 +0000

Big profits from Apple and a promise from the Federal Reserve to keep rock-bottom rates for at least two more years powered the U.S. stock market higher on Wednesday.

Buying picked up after the Federal Reserve said it would keep interest rates near zero through at least 2014, which was longer than many investors anticipated. The actions were taken as a sign of the central bank’s commitment to boost a sluggish economic recovery.

The Dow Jones industrial average .DJI rose 83.10 points, or 0.66 percent, at 12,758.85. The Standard & Poor’s 500 Index .SPX was up 11.41 points, or 0.87 percent, at 1,326.06. The Nasdaq Composite Index .IXIC ended up 31.67 points, or 1.14 percent, at 2,818.31. (commentary & photo courtesy of Reuters)

The RSI had a good day today along with the overall market. RSI made the following picks today:

Buy 256 shares MSCI Indonesia Investable Marke (EIDO); Stop = -$3.89 Target = +$11.68 Volatility = 5.00%
Buy 405 shares First Trust Health Care AlphaDE (FXH); Stop = -$2.46 Target = +$7.39 Volatility = 3.42%
Buy 376 shares First Trust NASDAQ-100- Technol (QTEC); Stop = -$2.66 Target = +$7.97 Volatility = 4.00%
Buy 256 shares Rydex S&P 500 Pure Growth ETF (RPG); Stop = -$3.90 Target = +$11.70 Volatility = 3.36%
Buy 224 shares Rydex S&P Equal Weight ETF (RSP); Stop = -$4.45 Target = +$13.34 Volatility = 3.59%
Buy 117 shares SPDR Select Sector Fund – Energ (XLE); Stop = -$8.52 Target = +$25.57 Volatility = 4.70%

I’m entering these six funds into my monitor list as I’m looking to add positions to the portfolio.

Wall Street rises on bank results, but Google sinks late – Closed out ZROZ; RSI picks FXD & IXN

Marlowe Cassetti — Fri, 20 Jan 2012 04:53:55 +0000

Stocks rose for the third straight day on Thursday, sparked by results from Bank of America and Morgan Stanley and as the latest jobless claims dropped to a near four-year low.

The S&P 500 hit a fresh five-month high, with the industrials, consumer discretionary stocks and financials leading gains.

In the latest snapshot of the U.S. economy, data showed the number of Americans filing for new jobless benefits dropped to nearly a four-year low last week. It added to views that the economy is slowly moving forward.

The Dow Jones industrial average .DJI rose 45.03 points, or 0.36 percent, to end at 12,623.98. The Standard & Poor’s 500 Index .SPX gained 6.46 points, or 0.49 percent, to 1,314.50. The Nasdaq Composite Index .IXIC climbed 18.62 points, or 0.67 percent, to close at 2,788.33.

Advancing stocks outnumbered declining ones by a ratio of about 2 to 1 on the New York Stock Exchange. On the Nasdaq, nearly three stocks rose for every two that fell. (commentary & photo courtesy of Reuters)

**********************************************************************************

One of RSI’s best performing positions has been PIMCO 25+ Yr STRIPS (ZROZ). In recent weeks it has been rolling over and acting tired. Not too surprising since this recent positive market action has hurt the risk-off positions. Closing out this position today represents a 20% gain which translates to pocketing +3.17R. Not too shabby.

*********************************************************************************

Today RSI continued to make more picks of risk-on funds:

Buy 473 shares First Trust Cons. Discret. Alph (FXD); Stop = -$2.11 Target = +$6.34 Volatility = 4.00%
Buy 188 shares iShares S&P Global InformationTechnology (IXN); Stop = -$5.31 Target = +$15.93 Volatility = 3.44%

Both these ETFs have been performing well. I think FXD has an edge over IXN since its money flow is more positive. Either way I will be looking at these and the other recent picks for potential new positions.

Catch you later

Wall Street gains 1 percent as IMF gives Europe hope – RSI picks more funds today

Marlowe Cassetti — Thu, 19 Jan 2012 05:33:47 +0000

Stocks jumped to their highest since July on Wednesday as the International Monetary Fund sought to help countries hit by the European debt crisis, while forecast-beating earnings from Goldman Sachs dispelled some worries over bank profits.

The IMF is seeking to boost its war chest by $600 billion to help countries reeling from the crisis, even though some nations insist Europe must first do more to support ailing members, according to sources.

The Dow Jones industrial average .DJI rose 96.88 points, or 0.78 percent, to close at 12,578.95. The Standard & Poor’s 500 Index .SPX added 14.37 points, or 1.11 percent, to 1,308.04. The Nasdaq Composite Index .IXIC climbed 41.63 points, or 1.53 percent, to close at 2,769.71. (commentary & photo courtesy of Reuters)

******************************************************************************

Today RSI picked the following:

Buy 146 shares iShares Russell 3000 (IWV); Stop = -$6.81 Target = +$20.44 Volatility = 3.52%
Buy 95 shares iShares Dow Jones Transportatio (IYT); Stop = -$10.43 Target = +$31.29 Volatility = 4.49%

I’m presenting these two funds for your inspection. I don’t see anything here to grab my interest. You might find a use for them in your portfolio.

Catch you later.

Wall Street rises but ends off highs as Citi sinks – Bought KRE; RSI picks another two

Marlowe Cassetti — Wed, 18 Jan 2012 06:05:37 +0000

Stocks advanced on Tuesday, pushing the S&P 500 to its highest since early August, but sharply pared gains late in the session as Citigroup’s steep drop in profit gave investors a reason to unload bank shares.

The financial sector, which has outperformed the broader market so far this year, took a hit on investors’ disappointment with Citigroup Inc’s earnings.

The Dow Jones industrial average .DJI rose 60.01 points, or 0.48 percent, to 12,482.07 at the close. The Standard & Poor’s 500 Index .SPX added 4.58 points, or 0.36 percent, to 1,293.67. The Nasdaq Composite Index .IXIC gained 17.41 points, or 0.64 percent, to 2,728.08.

The benchmark S&P 500 briefly moved above 1,300 on an intraday basis for the first time since August 1. Analysts said a substantial move past that resistance point could trigger more buying.

Volume totaled 6.8 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, just above the daily average of 6.68 billion.

Advancing stocks outnumbered declining ones on the NYSE by about 3 to 2, while on the Nasdaq, advancers beat decliners by about 13 to 12. (commentary & photo courtesy of Reuters)

********************************************************************************

Today I purchased the requisite shares of SPDR S&P Regional Banking ETF (KRE). It was behaving well but dropped slightly after the Citi news hit the street. That’s okay since I was looking to add financials to the portfolio mix.

After the bell, RSI issued another two buy signals:

Buy 165 shares Vanguard Total Stock Market ETF (VTI); Stop = -$6.03 Target = +$18.10 Volatility = 3.64%
Buy 109 shares SPDR Series Trust SPDR S&P Bio (XBI); Stop = -$9.11 Target = +$27.34 Volatility = 4.92%

With VTI, you are buying the entire US stock market. This is a highly diversified holding and pays a 1.92% yield. Technically it is doing quite well.

XBI is also doing well, almost too well. I would wait until you see some price pullback and buy on the dip.

Wall Street slips on reports of euro-zone downgrades – RSI picks IJS, IWB & KRE

Marlowe Cassetti — Sat, 14 Jan 2012 05:59:55 +0000

Stocks dropped on Friday, snapping a four-day winning streak, after news reports that Standard & Poor’s would downgrade credit ratings on several euro-zone countries.

The ratings agency was reportedly set to downgrade euro-zone countries, including France and Austria, but leave the ratings of Germany and the Netherlands unchanged. French Finance Minister Francois Baroin said the country has been notified of a one-notch cut.

After the market’s close, S&P followed through with downgrades of France and Austria as well as seven other members of the 17-nation euro zone bloc.

The Dow Jones industrial average .DJI dropped 48.96 points, or 0.39 percent, to 12,422.06 at the close. The Standard & Poor’s 500 Index .SPX lost 6.41 points, or 0.49 percent, to 1,289.09. The Nasdaq Composite Index .IXIC fell 14.03 points, or 0.51 percent, to 2,710.67.

For the week, the Dow rose 0.5 percent, while the S&P 500 advanced 0.9 percent, and the Nasdaq gained 1.4 percent. (commentary & photo courtesy of Reuters)

*******************************************************************************

Although the market was down 1/2% today the RSI portfolio managed a small gain, demonstrating the opposing forces of the risk-on balancing out the the risk-off positions. I guess you might say the RSI portfolio was perfectly hedged today.

After the close the RSI system gave four new risk-on picks:

Buy 102 shares iShares S&P SmallCap 600 Values (IJS); Stop = -$9.77 Target = +$29.32 Volatility = 5.38%
Buy 155 shares iShares Russell 1000 (IWB); Stop = -$6.42 Target = +$19.25 Volatility = 3.60%
Buy 241 shares SPDR S&P Regional Banking ETF (KRE); Stop = -$4.15 Target = +$12.44 Volatility = 6.33%

I’ll make some quick comments about the charts below.

IJS looks great but I would wait to see where it is headed from here. The same comment applies to IWB. KRE has especially strong accumulation and I would buy it here if I wanted to add a risk-on position. It was also picked last October.

Have a great weekend. Remember the US markets will be closed next Monday.

Wall Street ekes out gains for fourth day – RSI picks an ultra fund QLD

Marlowe Cassetti — Fri, 13 Jan 2012 07:03:38 +0000

The S&P 500 closed at a five-month high for the third day on Thursday but had difficulty extending gains in the face of lackluster economic data and another European bond market test.
The Dow Jones industrial average .DJI gained 21.57 points, or 0.17 percent, to 12,471.02. The Standard & Poor’s 500 Index .SPX added 3.02 points, or 0.23 percent, to 1,295.50. The Nasdaq Composite Index .IXIC rose 13.94 points, or 0.51 percent, to 2,724.70.

In its fourth day of gains, the S&P 500 has risen 1.4 percent, but it’s added only 0.3 percent since Tuesday as investors look for more convincing evidence of an improving U.S. economy, solid corporate earnings and progress toward resolving the euro zone’s debt crisis. "The divergence of opinions on where this market is going is balancing us out and we are sort of stuck." Analysts also pointed to technical resistance near the 1,300 level. (commentary & photo courtesy of Reuters)

*******************************************************************************

It is beginning to appear that RSI is leaning more in the risk-on direction. Look at RSI’s latest pick:

Buy 60 shares ProShares Ultra QQQ (QLD); Stop = -$16.58 Target = +$49.75 Volatility = 7.45%

Yes, this is a 2X leveraged fund, so it is high volatility. It is recovering nicely and may be headed higher. Because of its volatility, do be careful with this one.

Wall Street ends near 5-month high before Europe test – RSI makes good gains today & three new picks

Marlowe Cassetti — Thu, 12 Jan 2012 05:14:07 +0000

Stocks held firm near recent five-month highs on Wednesday as investors awaited key bond market tests for Europe in the next two days that could determine the direction of the euro zone crisis.

U.S. equities have been performing better in the face of turmoil from Europe’s sovereign debt problems. This is a major change from four months ago and comes as investors have taken improving U.S. economic data to heart and an optimistic view about corporate earnings.

The benchmark S&P 500 index recovered to close little changed to continue the recent decoupling of U.S. stocks and the movement of the embattled euro.

The Dow Jones industrial average .DJI slipped 13.02 points, or 0.10 percent, to 12,449.45. The Standard & Poor’s 500 Index .SPX.INX gained 0.40 point, or 0.03 percent, to 1,292.48. The Nasdaq Composite Index .IXIC gained 8.26 points, or 0.31 percent, to 2,710.76. (commentary & photo courtesy of Reuters)

************************************************************************************

The RSI portfolio outstripped the market averages with a gain of +0.71%, helped by strong showing in ZROZ, XHB, TLT and IYR. Losses were tiny compared to the big winners.

************************************************************************************

After the market close RSI produced three buy recommendations:

Buy 108 shares iShares S&P SmallCap 600 Index (IJR); Stop = -$9.21 Target = +$27.64 Volatility = 5.21%
Buy 236 shares iShares Russell 3000 Growth (IWZ); Stop = -$4.23 Target = +$12.70 Volatility = 3.49%
Buy 189 shares Vanguard Large-Cap ETF (VV); Stop = -$5.27 Target = +$15.81 Volatility = 3.59%

All these are risk-on positions. Of the three picks, I favor the first one. It is exhibiting stronger money flow of the three. If you need more portfolio exposure to small cap this may be what you need. With that said, the other two may fit your need in the growth and large cap sectors.

Catch you later.

Wall Street at 5-month high – Bought SPDR Select Sector Fund – Industrials (XLI)

Marlowe Cassetti — Wed, 11 Jan 2012 04:38:32 +0000

Stocks climbed to a five-month high on Tuesday, led by materials stocks after an upbeat forecast by aluminum company Alcoa and strong gains in bank shares.
The U.S. equity market continued its recent divergence from the woes of the euro zone. Recent economic reports and optimism about the U.S. earnings season have pushed stocks higher in the start of the new year, with the benchmark S&P 500 rising in five of six sessions.

The Dow Jones industrial average .DJI gained 69.78 points, or 0.56 percent, to 12,462.47. The Standard & Poor’s 500 Index .SPX rose 11.38 points, or 0.89 percent, to 1,292.08. The Nasdaq Composite Index .IXIC climbed 25.94 points, or 0.97 percent, to 2,702.50.

The Dow and S&P 500 hit their highest intraday levels in five months. The S&P 500 close above 1,285.09 is the highest since the end of July and marked a breach of technical resistance, which could spur further gains.

Volume was solid, with about 7.02 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, above the daily average of 6.7 billion. Advancing stocks outnumbered declining ones on the NYSE by 2,305 to 687, while on the Nasdaq, advancers beat decliners 1,833 to 699. (commentary & picture courtesy of Reuters)

********************************************************************************

The RSI portfolio turned in a good gain of +0.57% today. Somewhat under the 0.89% gain of the S&P500. I’ll take that, considering the large number of risk-off, income generating positions in the portfolio.

Recently RSI picked SPDR Select Sector Fund – Industrials (XLI) which I have been monitoring. Today I purchased it for the RSI portfolio. I have been trying to ease into more risk-on positions. RSI has been picking more of these funds, so I’m following suit.

*********************************************************************************

After the close RSI picked an energy fund:

Buy 1032 shares ELEMENTS Rogers Intl Commodity Energy ETN (RJN); Volatility = 5.57%

My concerns is that it trades, on average, a bit under 100,000 shares per day. Not quite thin, but not in high demand. Also, as an ETN it represents the value of a basket of 6 energy commodity futures contracts, so it doesn’t hold the physical commodity. This is somewhat risky. However, if the economy turns around, international energy futures should do well.

This is a pick that might be worth your consideration, but use caution.

Wall Street finishes up as earnings, euro zone eyed – RSI picks more funds

Marlowe Cassetti — Tue, 10 Jan 2012 05:07:12 +0000

Stocks ended slightly higher on Monday in a light-volume session as investors stayed cautious ahead of corporate earnings and key auctions for European debt this week.

The Dow Jones industrial average .DJI gained 32.62 points, or 0.26 percent, to 12,392.69. The Standard & Poor’s 500 Index .SPX gained 2.89 points, or 0.23 percent, to 1,280.70. The Nasdaq Composite Index .IXIC gained 2.34 points, or 0.09 percent, to 2,676.56.

Volume was light with about 5.98 billion shares traded on the New York Stock Exchange, NYSE Amex and Nasdaq, below the daily average of 6.61 billion. Advancing stocks outnumbered declining ones on the NYSE by 1,898 to 1,077, while on the Nasdaq, advancers beat decliners 1,422 to 1,067. (commentary & photo courtesy of Reuters)

*****************************************************************************

The RSI portfolio followed the market today and turned in a small gain. After the close RSI made the following buy recommendations:

Buy 274 shares Power Shares DB Oil Fund (DBO); Volatility = 5.0%; Yield = 0.0
Buy 81 shares SPDR S&P 500 (SPY); Volatility = 3.9%; Yield = 2.0%

Unfortunately I have to be brief tonight on these picks, but here are the charts:

A fund of interest is Market Vectors EM Local Currency Bond ETF (EMLC); Volatility = 2.6; Yield = 5.8%

It may make a breakout from this chart pattern.

Economy boosts Wall Street in 2012′s first week – RSI picks the S&P 500 in fund VOO

Marlowe Cassetti — Sat, 07 Jan 2012 06:51:16 +0000

Stocks rose in the first week of 2012, even though news that the U.S. jobless rate neared a three-year low did not whet interest in equities on Friday.

The U.S. market came into the new year revisiting familiar themes, with signs the U.S. economic recovery was gathering speed taking some of the focus off of lingering concerns about the euro zone’s debt crisis.

On Friday, the Dow Jones industrial average .DJI dropped 55.78 points, or 0.45 percent, to 12,359.92. The S&P 500 Index .INX fell 3.25 points, or 0.25 percent, to 1,277.81. The Nasdaq Composite .IXIC gained 4.36 points, or 0.16 percent, to 2,674.22.

Volume remained weak, with about 6.3 billion shares exchanging hands on the New York Stock Exchange, the Nasdaq and Amex, compared with last year’s daily average of 7.84 billion shares. (commentary & photo courtesy of Reuters)

*******************************************************************************

The RSI portfolio had a good day today with a gain of +0.33%, which beat all three of the major averages. This was achieved by virtue of the risk off positions.

After the market closed RSI made the following pick:

Buy 161 shares Vanguard S&P 500 ETF (VOO) Stop = -$6.17; Volatility = 4.22% (per $1,000 of risk)

VOO sports a yield of 2.06% which is a nice perk. The technicals indicate that this fund, and hence the general market, might be making a new change in trend to the upside. It has been beating the market (as measured by an un-weighted index RSP) and money is flowing in. It could just be at a turning point. I like it at this point.

Have a great weekend.