Jingle Jangle – There go my nerves again !

February 10, 2014

As you already know, I am not part of the December 31,2011 VTI trade, although I wish I were.

Therefore, for my present purposes, that trade represents a barometer for whether it is safe to be long the market or be on the sidelines.

The way the market pulled back during January, told me to take nothing for granted….even though I believe we have far to go on the upside…barring a very Black Swan.  The pundits say a 10% pullback would be healthy for the market.  That may be true, but I consider 10% of my money left on the table to be decidedly unhealthy for me!

So, following my own advice, I set a trailing stop for VTI …just in case.  The stop was activated February 4.  I split my doubts down the middle and sold a bit more than 50% of my VTI position and liquidated all other Index type ETF positions.  As last week  concluded, the market found its legs pushing back against weak job numbers.  Since my VTI barometer is still positive I decided to add small positions in the following ETFs to get a better feel for “the tape” and because I believe this is where the market is headed.

DXJ …..a bet on a weak yen strengthening Japan’s export business.

FEZ ….Europe’s top 50 stocks by market cap.

IYT …Dow Transport as a leading economic indicator

QQEW…Take a look at the 100 stocks in QQQ and re-sort so that each has an equal amount of money invested.

RPG …S&P 500 purged for pure growth.

VEU… Whole world minus United States

XBI — Biotech

XHB…. not just Construction ..includes Home Improvements and Furnishings.

XLF…. not just banks…includes Insurance plus Brokers etc.

XLV….North American Health Care

Despite the bad January , I realized 2.9% profits on invested capital as I moved to sidelines  ( 35 % annualized – I should be so fortunate ).

At the moment, I consider myself neither Bull nor Bear.  Rather, I’m embarrassed to say,  a nervous but hungry Deer.

Stay tuned.

Richard Maurice Gore

 

 

 

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