Month: July 2014

Back in February, I discussed the Dorsey Wright Associates’ (DWA) sector-based momentum ETFs. In their 16Jul14 podcast, available at dorseywright.com, DWA discusses all their managed ETFs including a model for investing in these sector-based momentum ETFs. Referred to the “power 4” the model has an investor owning the best performing 4 of the 9 ETFs. The model also incudes cash so that when none of the 9 are going up, the model ends up in cash. In order to follow their model, you need to subscribe to their web site. However you can do it yourself. On a 3 month basis, PYZ is up 9%, PEZ is up 8%, PTF is up 8%, and PXI is up 8%. All the information on ETFs which Invesco offers, including these sector-based momentum ETFs, can be found at https://www.invesco.com/portal/site/us/investors/etfs/performance/ . The 36 stocks PYZ held, as of 7/25, are listed at that web site. DWA manages these ETFs by changing the stocks held every quarter to reflect the stocks with the highest relative strength in the appropriate sector. Currently WLK, Westlake Chemical Corp, is the largest individual holding in PYZ.

Last week I had a bad quote for SElectronics which was pointed out to me in some emails. I do mess up some numbers at times, expecially when I only have my laptop to use. Now I am back from Japan and using a much larger monitor – but still may misquote a number or two. Thank you for the emails.

IBD TBP’s Current Outlook is “uptrend under pressure” – NOT a time to invest.

My current investments:
Nordic has a price of 47.50 a sell price 46.94, a relative rank of 74, and will be sold if it drops 1.19% more or I need the money to buy something else.
SAirTransportation has a price of 65.18, a sell price 64.21, a relative rank of 27, and will be sold if it drops another 1.51% or I need the money to buy something else.
SElectronics has a price of 77.20 a sell price 75.53, a relative rank of 01, and is a hold.
STransportation has a price of 84.38, a sell price of 80.16, a relative rank of 05, and is a hold.
SNaturalGas has a price of 45.49, a sell price 43.84, a relative rank of 04, and is a hold.
My portfolio changes this weekend:
IRA #1 – no change
IRA #2 – no change

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

Investors Intelligence reports a bull/bear ratio of 4-to-1. That’s the highest it’s been all year and is approaching levels not seen since early 1987. You may not remember 1987 when the DJIA had a one day loss of 23%. It is the largest one day loss in the history of the DJIA. It took two years for the DJIA to return to the high it hit in 1987 before the loss. Typically, where there’s too many bulls in the market, the market tends to be due for a setback.
One of the readers of my emails sent the following link on momentum investing.
http://www.marketwatch.com/story/how-to-buy-momentum-stocks-without-getting-burned-2014-07-07
A quote from the article: “A momentum investor must be nimble, selling stocks that are losing steam and buying whatever is trending.” 
Thanks Don, for the link.

IBD TBP’s Current Outlook is “uptrend under pressure” – NOT a time to invest.

My current investments:
Nordic has a price of 47.36 a sell price 46.94, a relative rank of 81, and will be sold if it drops 0.90% more or I need the money to buy something else.
SAirTransportation has a price of 65.90, a sell price 64.21, a relative rank of 07, and is a hold.
SElectronics has a price of 78.50 a sell price 75.24, a relative rank of 01, and is a hold.
STransportation has a price of 84.14, a sell price of 79.93, a relative rank of 03, and is a hold.
SNaturalGas has a price of 45.10, a sell price 43.84, a relative rank of 04, and is a hold.

My portfolio changes this weekend:
IRA #1 – no change
IRA #2 – no change

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

This week’s podcast from Dorsey Wright & Associates (DWA) featured Tammy and Susan explaining how the market is still in an uptrend and some indications it should continue. They are the best two DWA podcast presenters. The boss Tom is also good. This next week they are going to feature the changes they made to the PDP, PIE, etc. momentum indexes. What was moved in and what was move out. Interesting listening.
While I think the market is still going to die soon, it does look like it has started yet. The percent bullish stocks on the NYSE is 76 and on the Nasdaq is 60. 66 percent of the stocks on the NYSE are above their 50 day average and the percentage of the Nasdaq is 57. When those numbers go below 50 it is time to be cautious.

IBD TBP’s Current Outlook is “uptrend under pressure” – NOT a time to invest.

My current investments:
Nordic has a price of 47.91 a sell price 46.94, a relative rank of 47, and will be sold if it drops 2.07% more or I need the money to buy something else.
SAirTransportation has a price of 65.53, a sell price 64.21, a relative rank of 10, and is a hold.
SElectronics has a price of 78,01, a sell price 75.24, a relative rank of 01, and is a hold.
STransportation has a price of 83.31, a sell price of 79.55, a relative rank of 06, and is a hold.
SNaturalGas has a price of 44.85, a sell price 43.84, a relative rank of 05, and is a hold.
Every fund I own in IRA#1 and IRA#2 went down this week.

My portfolio changes this weekend:
IRA #1 – no change
IRA #2 – no change

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

“Sell in May and go away” does not seem to be working this year. The month of June was good this year. In my 5 portfolios, IRA#1 up 6%, IRA#2 up 2%, PDP PIE PIZ DWAS up 4%, TQQQ up 11% (as was the TQQQ/SQQQ). For the 3 month numbers, IRA#1 +6%, IRS#2 +3%, PDP etal -3%, TQQQ -4%, TQQQ/SQQQ -13%. In the month of April I did not have stop loss orders in for the last 3 portfolios – I do now.

Due to the rules and regulations imposed on US citizens and on those foreign financial companies which hold their investments increased reporting is required. Citizens (and residents (green card)) have to file a form with the US Treasury by 30 June called an FBAR – Report of Foreign Bank and Financial Assets – if the foreign accounts ever have a value greater than $10,000. There are also additional forms which also must be filed with your 1040 income tax form. Foreign financial companies can be fined if they do not provide proper reporting also. Just this week, the US decided to fine a French bank, BNP, $9B for reporting failures. So US financial companies, like Fidelity, Vanguard, USAA, etc. are restricting the investments any investor who does not reside in the US in order to avoid penalties from foreign governments. I talked with Fidelity this week and they indicated any investor who lives outside the US can not invest in any of the 10k+ mutual funds they offer. Currently stocks and ETFs can still be purchased. A lady told me last year her bank in Switzerland closed her account since the required US reporting was too great. I received a call this week from a resident of Bulgaria who indicated Wells Fargo had frozen his brokerage account – all mutual funds. Fidelity says they determine your residence based on the addess you keep on your accounts.

IBD TBP’s Current Outlook is “confirmed uptrend” – time to invest.

My current investments:
Nordic has a price of 49.20 a sell price 46.94, a relative rank of 13, and is a hold.
SAirTransportation has a price of 65.82, a sell price 64.21, a relative rank of 16, and is a hold.
SElectronics has a price of 79.20, a sell price 75.24, a relative rank of 01, and is a hold.
STransportation has a price of 83.74, a sell price of 79.55, a relative rank of 09, and is a hold.
SNaturalGas has a price of 46.14, a sell price 43.84, a relative rank of 03, and is a hold.
Every fund I own in IRA#1 and IRA#2 went up this week.

My portfolio changes this weekend:
IRA #1 – no change
IRA #2 – no change

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