Month: August 2013

Paul Volcher became federal reserve chairman on 8/6/79 and within a year the inflation rate was at 14% and the DJIA started a decline of 16%. Alan Greenspan became federal reserve chairman on 8/11/87 and on 10/19/87 the DJIA fell 23% and from the market high to low that year was 36% and inflation soon hit 5%. Ben Bernake became federal reserve chairman on 2/1/06 and within a 2 years the DJIA started a decline of 53% and inflation hit 5%. Bernake is leaving in January – you have been warned.
Now the government measurement of inflation has changed over the last 25 years to make much lower regardless of the reality, just like the government has done with the unemployment rate. By the way the government is now working on a change to the calculation of gross domestic product. The GDP number is too low and it makes them look bad so they are going to redo the calculation to make it higher.

On average it was a good week, but not very good. The sum of the deviations was just barely higher. This next week, being the month end week, is a time when the big investors buy more of what they own to make the their portfolios look better.

The sum of the deviations (904,672,674) is not up for the last two weeks – not time to invest.
The DJ Wilshire 5000 index is above its 50 day moving average and the average is increasing – time to invest. Both trends are not up – not a time to buy.

My current investments:
SAirTransportation has a price of $49.89, a sell price of $49.17, a relative rank of 27, and is a hold until it falls more or I need to buy something else.
SAutomotive has a price of $52.53, a sell price $50.50, a relative rank of 01, and is a hold.
SBrokerage&InvestmentMgnt has a price of $63.66, a sell price $62.44, a relative rank of 14 and is a hold.
JapanSmallerCompanies has a price of 12.79, a sell price 12.75, a relative rank of 11 and hold.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – None

My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 80% invested

After the market closed Thursday Investors Business Daily changed their market outlook to market in correction. That says it is not a time to buy, it is just a time to sell anything if your gain looks like it may become a loss. About the only bright spot in my list of Fidelity funds is SGold fund. On my web site, in addition to the top 20 funds on a 39 week deviation from a smoothed moving average, the top 20 funds based on a 13 week moving average and a 78 week are also listed. SGold moved from the 120 rank fund – out of the 130 I follow – last week to the number 1 fund this week on the 13 week list. EmergingEMEA, GolbalCommodityStock, TotalEmergingMarkets, and SGold are the only 4 funds whose deviation have improved over 2 weeks. If you want to take a shot, this may be the time to look at SGold. If you are into ETFs, over the last week, USLV (triple long silver) is up 42%, NUGT (double long gold stocks) 37%, AGQ (triple long silver) 27%, DRV (triple short real estate) 22%, and GDXJ (triple long smaller silver stocks) 17%.

It was a bad week and all the funds I own went down. Only SBiotechnology fell enough to sell, having fallen more than 5% from a previous weekly close. I own SBiotechnology in my IRA#2 and in my 401k (which allows me to buy any fund Fidelity offers).

The sum of the deviations (1046,904,672) is not up for the last two weeks – not time to invest.
The DJ Wilshire 5000 index is above its 50 day moving average and the average is increasing – time to invest. Both trends are not up – not a time to buy.

My current investments:
SAirTransportation has a price of $49.34, a sell price of $49.17, a relative rank of 36, and is a hold until it falls more or I need to buy something else.
SAutomotive has a price of $52.16, a sell price $50.50, a relative rank of 01, and is a hold.
SBrokerage&InvestmentMgnt has a price of $63.28, a sell price $62.44, a relative rank of 16 and is a hold.
SBiotechnology has a price of $155.44, a sell price 160.31, a relative rank of 03 and is sell.
JapanSmallerCompanies has a price of 12.89, a sell price 12.75, a relative rank of 04 and hold.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Sell SBiotechnology

My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 80% invested

This earlier this week Investors Business Daily changed their market outlook to uptrend under pressure. The interpretation of that market outlook is proceed with caution and be ready to take defensive action. Basically it is an indication that this is not the best time to invest. The next step may be confirmed up trend – the best time to buy stocks. Or it may be market in correction – avoid making new buys and lock in gains and cut short any losses. Based on historical standards this bull market is long over due for a correction. I mentioned gold last week. Watching the the prices and 50 day moving average for GLD indicates it may have made a bottom. There is no reason it should repeat the pattern it made in the late 70s, but it is something to watch.

One of Fidelity’s stupid rules on selling mutual funds is the round term trade rule – or hold it for 30 days or we will yell at you and may not let you buy again if you do it too much (4 times). My selling of JapanSmallerCompanies earlier this year resulted in Fidelity yelling at me. I hung up on them after strongly suggesting it was a stupid rule. However if next week should be time to sell something, I will have owned everything at least 30 days so will not break their stupid rule.

The sum of the deviations (943,1046,904) is not up for the last two weeks – not time to invest.
The DJ Wilshire 5000 index is above its 50 day moving average and the average is increasing – time to invest. Both trends are not up – not a time to buy.

My current investments:
SAirTransportation has a price of $50.90, a sell price of $49.17, a relative rank of 17, and is a hold.
SAutomotive has a price of $52.59, a sell price $50.50, a relative rank of 02, and is a hold.
SBrokerage&InvestmentMgnt has a price of $64.63, a sell price $62.44, a relative rank of 14 and is a hold.
SBiotechnology has a price of $162.32, a sell price 160.31, a relative rank of 01 and is hold.
JapanSmallerCompanies has a price of 12.99, a sell price 12.75, a relative rank of 06 and hold.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – None

My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 100% invested

One of those following gold is Gary Kaltbaum whose nightly radio show can be found at www.garyk.com. He points out that in the economically stressful times of the late 70s, gold went up over several years, fell by 50% in a year or two, and then went up 700%. During these economically stressful times gold has gone up for many years, fallen by 50% over the last year+, and is up about 9% since late June. Perhaps it is time for another 700% gain. Something to watch and the easiest way to watch it is with the ETF GLD.

I have received a couple of emails on the incorrect subject and error in a quote in my weekly emails. True. The errors did not influence any of my investment decisions and I will try to avoid those problems in the future.

The sum of the deviations (997,943,1046) is not up for the last two weeks – not time to invest.
The DJ Wilshire 5000 index is above its 50 day moving average and the average is increasing – time to invest. Both trends are not up – not a time to buy.

My current investments:
SAirTransportation has a price of $51.76, a sell price of $49.17, a relative rank of 13, and is a hold.
SAutomotive has a price of $53.16, a sell price $50.50, a relative rank of 02, and is a hold.
SBrokerage&InvestmentMgnt has a price of $65.73, a sell price $62.44, a relative rank of 10 and is a hold.
SBiotechnology has a price of $168.75, a sell price 160.31, a relative rank of 01 and is hold.
JapanSmallerCompanies has a price of 13.29. a sell price 12.75, a relative rank of 05 and hold.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – None

My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 100% invested