Month: April 2014

Last week I mentioned the risk of looking for high yield tax free Closed End Funds (CEF). One thought is that If you have other income, up to a 3k loss can be a deduction from other ordinary income – if you own the CEF for less than a year – and you still made the 7% tax free. I saw that done a couple of years ago – except the guy had 50k in short term income, a 33k loss, and 35k in tax free income.
The MoneyLife program, www.moneylifeshow.com, features an ETF of the week. About 2 weeks ago it was DBA, PowerShares DB Agriculture, and the expert suggest you buy it and hold it until is starts to decline below its 200 moving average. Last weekend it cloase at 27.83 and teh 200 day moving average was 25.43. Since I use an exponentially smoothed 39 week moving average I would have given it a percent deviation of 12.7 – ranking it #2 if it had been on my fund list. This week it cloased at 29.11. Basically it is an investment which should go up as the dollar goes down

The market is not very profitable these days. I have been suggesting to some that if they want a rather safe investment and are willing to watch it is that they invest in SPY. Hold it as long as the 200 day average is increasing. Finance.yahoo.com on their interactive chart provides you with all the data you need. Look at it weekly. Currently SPY is selling for 186+ and the 200 day average is 176+. SPY is an ETF which holds all the S&P 500 stocks with the same weigting the index has for each stock. You can look at “Holdings” and see the top 10 stocks it holds.

IBD TBP’s Current Outlook is “Market in Correction” – not time to invest.

My current investments:
Nordic has a price of 45.49, a sell price 44.17, a relative rank of 05, and is a hold.
SAirTransportation has a price of 61.33, a sell price 58.98, a relative rank of 09, and is a hold.

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

My portfolio market exposure after this weekend’s changes
IRA #1 – 00% invested
IRA #2 – 40% invested

One type of investment I’ve rarely purchased is a Closed End Fund (CEF). A CEF is a company in the business of making money by investing in stocks or bonds (instead of making burgers like Burger King). A mutual fund or ETF has an unlimited number of shares which you essentially buy from the offering company. CEF shares are traded on the stock market and are purchased from another investor. There are about 600 CEFs and CEFConnect.com provides a way to analyze them. For example, a screen for tax free funds yields a list 200 CEFs which yield 2.22% to 7.79%. The 7.79% CEF, Pioneer Municipal High Income (MHI), produces the high yield by being leveraged by 25.48% – it has borrowed 25% of its assets. It sells at 10% above the value of its assets and has lost 7.4% over the last year. The 15Apr MoneyLife show, www.moneylifeshow.com, featured John Cole Scott, chief investment officer, Closed-End Fund Advisors. Inc. Currently he likes global and Master Limited Partnership (MPL) CEFs. He likes MIE, ETV, and as part of the show’s “hold it or fold it” segment he answered viewers questions and likes NBB, SOR, TYN and dislikes NCV and GAB.

Again the federal reserve board (FRB) in the form of Janet Yellen, the chairman, basically said the FRB would print money for at least a year (if they do not run out of ink) and keep interest rates low for a year. The market likes printing money.

IBD TBP’s Current Outlook is “Market in Correction” – not time to invest.

My current investments:
Nordic has a price of 45.57, a sell price 44.11, a relative rank of 07, and is a hold.
SAirTransportation has a price of 61.31, a sell price 58.98, a relative rank of 06, and is a hold.

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

My portfolio market exposure after this weekend’s changes
IRA #1 – 00% invested
IRA #2 – 40% invested

Every Sunday StockCharts.com produces a free Newsletter called ChartWatchers. It is worth reading for the views of the the several writers. I especially like the articles by John Murphy. In the past he was on FNN and later CNBC. Last sunday he wrote “Midterm Elections years are the most dangerious of the four-year presidential cycle. …midterm year peaks usually start in the spring. Since April ends the ‘strongest six month period’.. that makes April a good time to take money off the table. It may also make the ‘sell in May’ maxim more meaningful this year.”

So on Tuesday as the market was heading down, there were comments from the Federa Reserve Board (FRB), the Nasdaq started up and closed 2.5% higher on Wednesday. Then the market decided to ignore the FRB and closed 4% lower on Friday. It is almost to the place where the market is ignoring the FRB. So my bet is they will do another big qualitive easing to pump money into the market and make it go up. However, until then it looks like a down market.

IBD TBP’s Current Outlook is “Market in Correction” – not time to invest.

My current investments:
Nordic has a price of 45.80, a sell price 44.11, a relative rank of 02, and is a hold.
SAirTransportation has a price of 59.30, a sell price 58.98, a relative rank of 09, and is a hold. The sell price was adjusted by the today’s distribution.

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

My portfolio market exposure after this weekend’s changes
IRA #1 – 00% invested
IRA #2 – 40% invested

Investors Business Daily Market Wrap video on 04/04/14 – http://ibdtv.investors.com/market-wrap/696089-ibd-market-wrap-040414.aspxm – said “Though some of you might find this whipsaw market extremely trying, remember one of your greatest safeguards is to follow the trend. And sure it can go back up quickly, but it can just as easily trend south and take your profits along with it.” This was after they changed “Market in Correction” to “Uptrend Resumes” on 01Apr to “Market in Correction” on 04Apr. Take the opportunity to listen to www.garyk.com archived radio on 04/04/14. At 21 minutes into the show he lists the conditions we now have which match conditions prior to previous crashes.
Last weekend and on Monday the Federal Reserve Board (FRB) used talking points to indicate they would be printing more money to keep the market going up, and the market went up. Then on Thursday the market turned around and started down. We may be at the stage where printing more money can’t keep the market up. Since the FRB has been printing money to keep the market up for many years, when printing money quits working the downtrend will be severe. The FRB has managed to stop two potential crashes over the last 5 years by doubling the printing of money each time.
2014 had a good February but things deteriated in March. For the quarter, my #1 IRA is down 1% , my #2 IRA is down 2%, my PDP/PIE/PIZ/DWAS is down 2%, my IBD ETF strategy is down 7%, and my IBD ETF strategy with short is down 14%. It was a quarter with a lot of up and down market directions. Few trending strategies work well when there is no solid trend.

IBD TBP’s Current Outlook is “Market in Correction” – not time to invest.

My current investments:
Nordic has a price of 46.43, a sell price 44.11, a relative rank of 02, and is a hold.
SSoftware&ComputerServices has a price of 116.34, a sell price 118.43, and is a sell.
SAirTransportation has a price of 61.87, a sell price 59.32, a relative rank of 05, and is a hold.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Sell SSoftware&ComputerServices

My portfolio market exposure after this weekend’s changes
IRA #1 – 00% invested
IRA #2 – 40% invested