Archive for April, 2017

April 30 SPY Signal..

Saturday, April 29th, 2017

April 30, 2017

Your 4,905 share investment in SPY, $ 1,096,415 as of the close December 31, 2016, is now worth
$1,167,782.

SPY’s April 28 price $238.08 is comfortably above its 200 day moving average price of $222.18.

The rule says stay invested.

Richard Maurice Gore

The Company You Keep

Tuesday, April 25th, 2017

April 25, 2017

Taking dead aim at May 1….Ever mindful of the admonition ” Play till May then go away ! ”

Aware that a possible government close down April 30 is a definite adverse market risk.

Aware that there are potential ” black swans ” in the pond such as Korea etc.

Nevertheless a trend follower and understanding that interest yields on bonds are lower than earnings yields on stocks.

Therefore I am operating in the market, ( no options at present ), under the protection of the ” SPY ” 200 day moving average umbrella.

Warren Buffett ( Berkshire Hathaway ) and John Vogel ( Vanguard ) would tell you that ” SPY ” an ETF passively representing the S&P 500 Index is the performance benchmark against which all portfolio managers are measured ( including Mutual Funds, and Hedge Funds etc ). The implication is why pay any professional to actively manage a portfolio if he can’t outperform a passive index of the 500 largest USA companies.

SPY….November 1, 2016 to April 24, 2017…positive gain
of 11.58% ( and that doesn’t include a 1.91% dividend… ( SPY is the benchmark )

So, what am I holding outperforming SPY ?

ETFs : QQQ ( passive ) 14.68%…ITA ( 17.74 %)…XLF ( 19.96% )…KBE ( 24.83% )…ROBO ( 18.84% )

SBIO ( 18.51% )

As a comparison reference GOLD ( GLD ) since November 1…negative 0.38%…VDE ( energy ) negative 0.36%.

Stocks: GS ( 25.24% )…AMZN ( 14.89% )…FB ( 11.05% ** thats right SPY is outperforming Facebook )
MCO ( 18.84% )…TMUS ( 33.75% )…C ( 20.94% ) AAPL ( 26.51% ) MSFT ( 12.70% ) GOOG ( 8.52 % )** thats right, SPY is outperforming GOOGLE !

This is the company I am presently keeping with full confidence SPY will not sink below its 200 day moving average as of the close Friday.

To make this list my chart analysis must be positive and I need to like the story underpinning the market’s action…as well as an analysis which includes PEG ratios, Debt / Equity, free cash flow/ price etc.

Richard Maurice Gore

Play Till May ?

Saturday, April 15th, 2017

April 15,2017

As someone who has seen his year to date profit wiped out during the first 10 days of May, I respect this well know admonition and pay extra special attention to the signals the market is giving off as we approach May 1.

As anyone who regularly reads this blog knows, I respect ( even more ) the 200 day timing model for the ETF “SPY” ( the top 500 USA stocks )which trades as a basket . On Tuesday SPY’s price, $232.41, broke below its 50 day moving average ( $234.51 ), ( support ) so I’ve postponed any new market purchases and will wait to see what develops this week. SPY’s 200 day moving average, $220.75 sits 5.1% below where we are now.

My chart readings for stocks are settling into a performance pattern I would describe as anemic.

More and more, people are referring to the market’s performance between November 1 and now as ” the Trump Bump “, an expression of confidence that Trump will deliver on his promises. Now, with investigations on his relationship with Russia heating up combined with failures to deliver a voting victory on health care, demands for his tax returns, bellicose saber rattling by Korea and Putin, and what seems to be a pivot toward liberals, The ” bump ” has become a ” bimp ” and uncertainty is creeping in. Uncertainty and higher stock prices seldom travel in the same direction.

But, but, but, interest rates are still low and that means stock yields can compete with bond yields. The USA is navigating through troubled international waters and even though Trump says he would favor a weaker dollar ( higher interest rates ) the USA is seen as a safe haven and that means international demand for the dollar, and both stocks and bonds.

Me ? I haven’t been as heavily invested as I should have been and that means a lower overall performance for my portfolio during the Trump Bump even though I was holding the right cards. I’m still learning ! But, smallerlosses if SPY nose dives through its 200 day moving average on the 30th.

My biggest equity position is 3 April PUTS on Amazon at 860, 855 and 840.
My biggest ETF position is with QQQ.

I’ll get aggressive again as SPY clears the April 30th hurdle and my individual stock charts begin to
show a pattern of accumulation rather than distribution.

Richard Maurice Gore

No April Foolin – SPY Model Still Positive

Saturday, April 1st, 2017

April 1, 2017

SPY ended March at $ 235.74of which is 7.49% above its 200 day simple moving average of $219.32.

This means that SPY is still on a BUY signal.

The 4,905 shares you theoretically hold are now worth $1,156,305 versus $1,096,415 on December 31, 2016. This means your unrealized profit for the first 3 months of 2017 is $59,890, excluding dividends of 2.36%

I always like to compare financial market profits to rental profits. Theoretically, you have received $19,963 per month rent ( with no dividends, BUT with no expenses or aggravation ) for 3 months on an investment property in which you have invested $1,096,000.

The current BUY signal was generated March 31, 2016 ( 253 days ago ). Since that date SPY has appreciated 17.08% excluding dividends which are 2.36% per annum. So, looking back 1 year your total return in SPY has been 19.44%.

Truthfully, I would have sold my position last week based on the possible inability of the Trump administration to make changes that would deliver higher profits and lower taxes. The financial markets abhor uncertainty. BUT, I realize I can’t predict the market at any specific time. All I can predict is that I will follow the trend dictates of my timing model and probably not head for the exits on time. On the other hand I can predict I will not be savaged by being long the market and most likely will escape with a decent profit instead of sitting on the fence, doing nothing to protect my profit, and consoling myself that I am a long term investor. The model will not allow me to sit still for anywhere remotely close to a 50% round trip which could take ten years to get back to breakeven as it did during the last grand recession.

I am sufficiently in the market to cheer for a daily rise and sufficiently out, thanks to Trump, to know it pays to have a reserve on the sidelines.

In addition to long positions ( primarily equities AMZN and GS ) (primarily ETFs QQQ, ITA, KBE, XLF ) I have written promises to accept assignment of certain stocks and ETFs ( Puts ) at lower prices.

Richard Maurice Gore

SPY is an Exchange Traded Fund. It is a basket containing all 500 names in the Standard & Poors 500 Index representing the largest of the large cap stocks appearing in the Index 500. In a word, it is the USA Stock market. It is passive in that it is not managed by a portfolio manager. Very few of the components in the index change from year to year. Its annual performance result is the benchmark against which all portfolio managers are measured to determine whether their expertise is worth a fee or commission. It eliminates ( spreads ) the ” specific risk ” of investing in a specific stock over 500 names and is said to contain only ” market risk ” making it attractive to people who want to be in the stock market, but not subject to the risks associated with any one company.