Author: Flynn

Last weekend I worked to update my weekly numbers as soon as Fidelity published them. The first group they updated, indicated by the date (as of 08/08/2014) in the group title, was the select funds. The only problem was that of the 40 mutual funds in the select group 15 of the funds did not contain the 08Aug numbers even though the title said it had been updated. So, as a result, as your emails pointed out, I used an incorrect price for STransportation and should not have sold it. I have updated the 15 incorrect select group quotes so the numbers are better this week. I am really not sure how to insure the quotes Fidelity provides on their funds are correct. Next time I will check the quotes of the funds I own by using another source and if there is a fund to buy or sell, I’ll call Fidelity to verify the quote. I have compained several times in the past about Fidelity giving bad quotes, generally related to a distribution. Fidelity replies, but basically ignores my calls and letters.

www.marketwatch.com had an interesting on the latest quarterly report from Soros Fund Management. They reported that their investment in puts on the S&P500 was increased in a huge way. That is a bet the market will go lower.
Last week on the Charles Panye show on Fox Business News Gary Kalkbaum indicated he used the 50 day moving average an his sell point. Charles said he was a longer term investor and used the 200 day moving avarage.

IBD TBP’s Current Outlook is “Confirmed Uptrend” – time to invest. The Outlook was changed on 13Aug14.

My current investments:
SBiotechnology has a price of 209.29 a sell price TPD, a rank of #1, and is a buy.
It was one of the 15 which Fidelity had a bad quote on the website and when corrected was the #12 fund last week.
It has gone up extremely fast since last week so is very volatile..

My portfolio changes this weekend:
IRA #1 – Buy SBiotechnology
IRA #2 – Buy SBiotechnology

My portfolio market exposure after this weekend’s changes:
IRA #1 – 100% invested
IRA #2 – 20% invested

July was a fun month for about the first half. In July my 5 portfolios, IRA#1 down 2%, IRA#2 down 4%, PDP PIE PIZ DWAS down 1%, TQQQ up 3%, TQQQ/SQQQ up 4%. For the last 3 months, IRA#1 +4%, IRS#2 -1%, PDP etal -1%, TQQQ +14%, TQQQ/SQQQ +15%. IRA#1 and IRA#2 changes are reported in these notes. PDP etal purchased PDP and PIZ in May (the 2 which had 3 month gains) when IBD said “Uptrend Confirmend” (UC). TQQQ was purchased in May when IBD said UC and half sold in July when IBD said “Uptrend under Pressured” (UP). TQQQ/SQQQ – TQQQ was purchaed in May when IBD said UC and sold in July when IBD said UP. TQQQ/SQQQ did not buy SQQQ since IBD never said “Market in Correction” (MC). I described the TQQQ and TQQQ/SQQQ in my 07Mar email – flynndj.com. Both are based on IBD’s ETF strategy using TQQQ instead of QQQ and now using a 8% stop loss updated daily.
On 01Aug, the remaining TQQQ shares in the TQQQ portfolio was sold when it fell below the 8% stop loss (updated daily).
On 05Aug, IBD said “Market in Correction” and the next day TQQQ/SQQQ purchased SQQQ at the open. SQQQ goes up 3 times faster than the market goes down – and vice versa.

One of the podcasts I have to which had previously listened and just started again is Paul Merriman. At PaulMerriman.com he presents the ultimate buy and hold strategy. He has recommendations for investors in Vanguard, Fidelity, and Schwab. Buy and hold is not my kind of investing, but some investors perfer not to change investments.

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

My current investments:
SElectronics has a price of 75.50 a sell price 75.53, and is a sell.
STransportation has a price of 79.76, a sell price of 80.16, and is a sell.

My portfolio changes this weekend:
IRA #1 – Sell SElectronics
IRA #2 – Sell SElectronics and STransportation.

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

Not a good week in the market. This was the biggest down week in two years. Not one of the 130 mutual funds I follow has had an improving deviation from its moving average over the last two weeks. That is my normal criteria for a fund I may consider buying. Gary Kaltbaum in his Friday night radio show pointed out that the US market generally follows the direction of the German Market – the DAX. The DAX fell below its 50 day moving average in early July, fell below its 200 day moving average Thursday, and is now 2.9% below the 200 day moving average. Good things do not happen when an index is below a 50 day moving average and only bad things happen when an index is below a 200 day moving average. There are significent indicators that a market top is near, as there have been for months, but as long as the Fed is printing money there will probably not be a market correction.

IBD TBP’s Current Outlook is “uptrend under pressure” – NOT a time to invest. I am surprised they have not change the outlook to “market in correction.”

My current investments:
Nordic has a price of 46.46 a sell price 46.94, and is a sell.
SAirTransportation has a price of 63.77, a sell price 64.21, and is a sell.
SElectronics has a price of 76.13 a sell price 75.53, a relative rank of 01, and is a hold.
STransportation has a price of 81.26, a sell price of 80.16, a relative rank of 09, and is a hold.
SNaturalGas has a price of 43.83, a sell price 43.84, and is a sell.

My portfolio changes this weekend:
IRA #1 – no change
IRA #2 – Sell Nordic, SAirTransportation, and SNaturalGas.

My portfolio market exposure after this weekend’s changes:
IRA #1 – 40% invested
IRA #2 – 100% invested

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

This week the US announced the Gross Domestic Product declined by 2.9% in the first quarter of 2014. This is the largest non recession decline since WWII and the largest decline since the great recession 5 years ago. Since government spending on programs is based on a “rosy scenario” of 4% to 5% growth each year, this projects a grim future for budgets, deficits, and national debt. I expect proposals for increased taxes to “alleviate” some of the budget problem will be coming. The market is a predictor of future economic events, it still does not see a problem. However the indications of a market problems are everywhere. Among the indicators are house flipping seminars being presented again, market margin debt at record high, bull sentiment very high, IPOs for companies with no earnings, etc. My suggestion is that you be ready to sell.

IBD TBP’s Current Outlook is “confirmed uptrend” – time to invest. Although the S&P 500 had another distribution day this week. The count is now S&P 500 – 3 and Nasdaq – 2. Distribution days happen when there is a down day and the volume has increased. It is an indication that the managers of large portfolios are selling stock.

My current investments:
Nordic has a price of 48.48 a sell price 46.94, a relative rank of 15, and is a hold.
SAirTransportation has a price of 65.75, a sell price 64.21, a relative rank of 11, and is a hold.
SElectronics has a price of 77.29, a sell price 73.94, a relative rank of 01, and is a hold.
STransportation has a price of 83.08, a sell price of 79.55, a relative rank of 09, and is a hold.
SNaturalGas has a price of 45.93, 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 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

Last weekend Consuelo Mack on her WealthTrack show featured Michael Hasenstab who manages the Templeton Global Bond Fund. Each week the guest is asked what is the number one investment everyone should own. Mr. Hasenstab suggested Ukrainian government bonds. Doing a Google seach on Ukrainian bonds will show you the Ukraine just issued $1B in bonds – backed by YOU, the US tax payer. Sort of make one wonder how much debt the US really is has.

In February I mentioned that Invesco PowerShares changed 10 of their ETF portfolio to managed momentum portfolios following Dorsey Wright’s definition of relative strength. The announcement of these ETF changes can be found at http://www.invescopowershares.com/news/pdf/P-CHNG-PR-1-E-2013.pdf . These are managed ETFs similar to the PDP, PIZ, PIE, & DWAS (mentioned in previous comments) except the stocks in the portfolios are based in one sector. I’ve been following the 10 EFS for several months calculating their 13 week percent change. At the end of May, in a small account I use for banking, I purchaed PXI (PowerShares DWA Energy Momentum Portfolio) at 59.35 since it was the best performing of the 10. This week it close at 65.85. In rating the 10 EFTs based of their 13 week performance, PXI has been the best over the last 5 weeks. PUI is second, and PYZ is third. 3 of the 10 are down over the last 13 weeks. I update my stop loss at 8% from the highest close since purchased every night. My current stop loss is 60.58 based on the 20 Jun close. The 33 stocks the ETF owns is updated daily at www.invesco.com.

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

My current investments:
Nordic has a price of 48.67 a sell price 46.94, a relative rank of 13, and is a hold.
SAirTransportation has a price of 66.28, a sell price 64.21, a relative rank of 08, and is a hold.
SElectronics has a price of 77.83, a sell price 73.94, 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 07, and is a hold.
SNaturalGas has a price of 46.15, a sell price 43.84, a relative rank of 02, and is a buy.

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

Thanks to what is happening in the middle east, anything related to energy production went up and anything related to energy consumption went down. Four of my top 20 funds have an increasing deviation from their moving average for the last two weeks and are buys. They are all energy related. The 15 of the others do not quailify as buys and are energy consumers. An increase in the cost of energy is a tax to every consumer. Gasbuddy.com suggestes there is an excellent chance that American gasoline prices could hit new highs. The site points out that if the 3+m barrels of crude oil Iraq pumps every day, are halted, the US and the other Iraq oil customers will have to find new sources. “Less crude oil available means higher prices, it’s the old fundamentals: supply and demand.”

IBD TBP’s Current Outlook is “confirmed uptrend” – time to invest. IBD TPB’s Market Pulse also indicates the number of distribution days for the S&P 500 is 2 and for the Nasdaq is 1. When the number reaches 4 it is a time to start being careful. Distribution days are down days for either index with increased volume. That suggests the managers of large portfolios are selling.

My current investments:
Nordic has a price of 48.85 a sell price 46.94, a relative rank of 06, and is a hold.
SAirTransportation has a price of 65.17, a sell price 64.21, a relative rank of 08, and is a hold.
SElectronics has a price of 77.17, a sell price 73.31, a relative rank of 01, and is a hold.
STransportation has a price of 82.03, a sell price of 77.93, a relative rank of 05, and is a hold.
SNaturalGas has a price of 45.13, a sell price TBD, a relative rank of 02, and is a buy.
I had an error in my quote on SElectronics last week. Thank you for the emails.

My portfolio changes this weekend:
IRA #1 – no change
IRA #2 – invest 20% in SNaturalGas

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