Archive for September, 2016

September 30 Signal

Friday, September 30th, 2016

October 1, 2016

Since SPY closed September above its 200 day moving average ( $216.92 vs $206.27 ), SPY continues on its Buy Signal,  up 5.3 % year to date, ( 6.94  % including dividends )

For sure , you know I am convinced the low level of interest rates makes equities ( read USA Stock Market ) the only game in town.

Enter the low energy, orange fluff head,  threatening, at the debate, a  market crash if the FED raises interest rates.

Now, what do you do if you are Janet Yellen, simultaneously being accused of keeping interest rates low to help Hillary Clinton but with insufficient evidence to raise rates…….. The answer……nothing.

In my opinion, this means its safe to invest in the leading stocks of sectors which do their business in dollars with minimal cross currency exposure….if the price comes to you…as it could courtesy of  banking woes and lower oil prices.

I believe in this market,  I am writing puts in companies such as FB and NVDA  instead of blindly purchasing the stock at today’s price. I’d rather take delivery at a discount off today’s price plus pocket a premium for having had the courage to have written a Put that gives me some price cushion without altogether excluding risk.

Richard Maurice Gore

SPY 500 a buy until Sep 30, 2016

Thursday, September 1st, 2016

August 31, 2016

The USA stock market, as represented by the Etf  symbol “SPY”, is a basket of 500 USA stocks which trade as one stock.  SPY ended August at $217.44 per share, only 32 cents above August 1, and that says a lot about its lack of direction.

The good news is that the 200 day simple moving average of SPY is $204.03,…6.16% below today’s closing price.

So, the bullish trend continues.  This is reinforced by the fact that bond yields are low and offer almost no competition to the earnings yield of stocks.  There may be a misguided interest rate increase by the Fed but there seems to be nothing behind it in terms of strong data that would argue for a trend of rising interest rates.

If you had a million dollars invested in SPY on December 31, 2016, and ignored the December 31 sell signal, your million dollars would now have a value of $ 1,066,543 ( 6.65% excluding dividends ) ( 4,905 shares )

If you followed the sell signal of December 31 and then repurchased shares at the subsequent buy signal, your million dollars would now have a value of $1,040,667 ( 4.07% excluding dividends ) ( 4.786 shares )

If I had had my liquid resources invested at the million dollar level, my million dollars would have grown at the rate of 8.4% , but this is me unchained and investing in anything I want, based on my recognition that the investment climate is safe and that I am investing in Etfs and specific names that do most of their business in the USA. That means I am invested in IWM ( 2000 smaller cap companies ) and offshoots realizing that SPY companies contain too many energy names and firms that are forced to translate foreign earned profits into shrunken dollar profits on their quarterly income statements, or export at a disadvantage because of the dollar’s strength..

I am under invested at present based on my belief that SPY will continue to grow, but very slowly until the dollar weakens. My risk is  that the market will move higher with me not participating sufficiently. My thought is that stocks will sell off a bit but remain in the ” buy ” zone and offer better prices than at present for the next leg up.

Richard  Maurice Gore