Archive for March, 2014

Cross Currents

Monday, March 24th, 2014

March 24, 2014,

VTI ( Vanguard Entire USA Equity Market )  As of the close March 21, 2014, the ETF ….VTI completed 557 days with no sell signal.  Accumulated profit, including dividends,  is 58.37%.    On March 31, VTI’s close, relative to it’s 200 day moving average,  will tell me to stay in or get out of the trade and the surf altogether…except for GLD which has its own month end  eject button..

GOLD ( GLD )   Friday concluded the 15th day of the long trade with a gain of 0.67%.  Yes, I know that the Crimea question looks to be concluded, but that is only part of what’s impacting GLD.  I’m just following the trail to the next bend ( March 31 )  to decide whether to sell.   Or,  add another 3% of my liquid net worth to my GLD  holding because GLD’s 50 day moving average has swung upward to positively intersect its 200 day moving average

QQEW / ZACK February 18 ( Fictional ) Portfolio. This portfolio is down 2.7% since inception.  The portfolio is comprised of any of the 100 stocks in the QQQ  100 Index which are accorded a Rank of 1 ( strong buy ) or 2 ( buy ) by Zacks.  My understanding is that the Zack #1 or # 2 Rank is given only to equities whose performance is derived from positive reporting, especially relating to positive earnings surprises.  This portfolio was constructed to tell me something about the thrust of the market.  Here, two factors could be impacting performance…the harsh impact our weather is having on GDP and/ or the market pausing for a refresher.  So, while the existing VTI signal says its safe to stay in the water. the recent performance of these stocks has me looking over my shoulder to make certain my water wings haven’t sprung a leak.

Think I’ll spend part of today checking the relative performance of some of the sector ETF s  in my portfolio and on my watch list.  These include VDE, ITA, XLF, XIV, XBI, RPG, and VB.

Richard Maurice Gore

 

Convergence

Thursday, March 13th, 2014

March 13, 2014

 

Gold….the  ETF….”GLD”  ended February above it’s 200 day moving average, so I invested 7% of my liquid net worth in  GLD .  This investment is ahead 2.6% in eight trading sessions.

Now, I’m awaiting a confirmation that my decision was correct.   My thought is that the  confirmation will take place when GLD’s 50 day moving average ( trend line) crosses above it’s 200 day moving average ( trend line ).  We are almost there.  GLD’s 200 day moving average is $125.74.  It’s 50 day moving average, $ 123.45, and  climbing toward an intercept.  Should that happen, I’ll invest another 3%  of my liquid net worth, ( my final allocation to this asset ).

Why is GLD  awakening ?  You would think I’d know a little more about gold than I do, given that for 3 years my desk at Citibank, Johannesburg sat and vibrated about 5,000 feet above the floor of a working gold mine…. just across Fox Street from the main entrance to the Johannesburg stock exchange,  where trading  gold shares is very serious business.

But, I would never buy gold based on my analysis of what should happen to it’s price..  No, instead I consider myself  just an old Indian scout following a trail ( trend ).  My version of a broken twig or bent branch is found on a chart in doing trend analysis.  I don’t care whether the Chinese or George Soros is buying gold or why.  All I care about is that its being bought often enough and in sufficient quantity  to move the trend needle into the ” Buy ” zone.

I am a firm believer in using moving averages,  strength relative to the trend of  a relevant benchmark, and volume to  determine the viability of  a trend.

Where does the trail end ?  Gold can be volatile, so  I hope I don’t find the exact top because there could be a sink hole waiting just before trails end !   I’ll probably  exit with not  quite as much profit as possible.   In fact, as soon as I’m ” all in “,  my next move will be to locate the exits and formulate an evacuation plan..

Richard Maurice Gore

February 28 – Gold Signal +Staying Long

Saturday, March 1st, 2014

Close February 28, 2014

VTI closed the month at $ 97.40.  This is 9.3% above its 200 day simple moving average of  $89.11.  It’s my barometer for staying long until March 31, 2014, unless,  at some point during the month VTI closes 5% below its 52 week high ( $ 97.86  ) less 5   % =  $ 92.97.  That would get my attention and with other factors could cause me  to lighten up by as much as  50% of my total invested position in the market. I would then wait until month end to determine the fate of the remaining 50% of my invested positions, ( or depending on tape momentum ) go back in.  Since I am not in the December 31, 2011 VTI month end trade, I trade around it.  For instance this week I liquidated my entire VTI position and replaced it with RPG ( Rydex SP 500 Pure Growth ).  Since Jan 1,  VTI is up  1.54% while RPG is up 6.55%.  So, I’ve narrowed my diversification from 3500 to 500 stocks and tilted from balanced performance  to pure growth. Its my expectation that as the market moves higher, momentum will grow more concentrated and RPG may evolve into OEF ( 100 names ) always with me keeping one eye on VTI and where it is in relation to its 200 day moving average.  VTI is my canary because its been on the right side of the trend for 500 plus days. And, when the trend ends…..well, you know the rest.

Gold ( GLD ) $127.62  finished February above its 200 day moving average, $125.89.  I could see by noon that this was in the cards, so I invested 7% of my liquid investment assets into GLD.

My February 18 ” Watch List ” QQEW / Zacks Portfolio finished the week with a gain of 0.30%  versus 1.3 % gain for SPY.  Since February 18 the Watch List portfolio has gained 2.53% while SPY has gained 1.11 %.   The Leaders are TSLA 23.5%, GRMN 16.4% and WYNN 9.1% – The laggards are EXPD, negative 5.6%,  MU, negative 3.5% and ADSK, negative 3.1%.  Of the 20 entries, 7 are in negative territory.  Which among this 20 has a compelling and sustainable competitive advantage over its competitors.? For me, that , and sustainable momentum,  will be the factors that determine how long  I tag along for the ride.  Time for me to begin to get to know more about some of these names.  But, be assured,  nothing I learn will stop me from bailing out, at least temporarily, if VTI signals the party is over or specific momentum begins to sputter..

Richard Maurice Gore