Author: Flynn

From www.garyk.com – “Regardless of the recent rally, we continue to believe we are in a late stage environment as so many characteristics of a late stage market are showing up. They include:…” Gary Kaltbaum wrote that on 12Mar. Then he wrote it again on 24Mar adding a couple more characteristics. A reading of his web site is worth while and listening to his nightly show on line, on itunes, or on the radio show archives is an education.
Another site you should visit daily is http://ibdtv.investors.com/. It is the IBD Market Wrap video generally taking 3+/- minutes. Review the list of Market Wrap videos. The video for 26Mar is also worth reviewing.

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

My current investments:
Nordic has a price of 45.51, a sell price 43.97, a relative rank of 04, and is a hold.
SSoftware&ComputerServices has a price of 118.58, a sell price 118.43, a relative rank of 28, and is a hold until it falls more or it is sold to buy another fund.
SAirTransportation has a price of 60.34, a sell price 59.32, a relative rank of 13, and is a hold.
OTCPortfolio has a price of 78.91, a sell price 79.52, and is a sell.

My portfolio changes this weekend:
IRA #1 – Sell OTCPortfolio
IRA #2 – Sell OTCPortfolio

My portfolio market exposure after this weekend’s changes
IRA #1 – 00% invested
IRA #2 – 60% invested

Investors Business Daily maintains a count of “distribution days” for the Nasdaq and the S&P 500. A distribution day is when one of the major indexes closed down at least 0.2% on volume heavier than the day before. If you get 6 distribution days within any 4 or 5 week period, the uptrend will typically roll over into a downtrend. The current IBD count in 8 on the Nasdaq and 5 on the S&P 500. Look out below.

If SBiotechnology closes on Monday at the same place it closed today, I will lose just under 3%. Not a good investment.

IBD TBP’s Current Outlook is “Uptrend Under Pressure” – not time to invest.

My current investments:
Nordic has a price of 45.04, a sell price 43.97, a relative rank of 16, and is a hold.
SSoftware&ComputerServices has a price of 122.83, a sell price 118.43, a relative rank of 05, and is a hold.
SAirTransportation has a price of 60.62, a sell price 59.32, a relative rank of 26, and is a hold until it falls more or is sold to buy another fund.
SBiotechnology has a price of 206.43, a sell price 212.71, a relative rank of 04, and is a sell.
OTCPortfolio has a price of 82.11, a sell price 79.52, a relative rank of 08, and is a 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

I received an email the other day saying the weekly quote I used for SSoftware&ComputerSystems was wrong. It was. Somehow I entered a price about 5% higher than it should have been. This did not really change anything but the relative ranking for that week, the relative deviation for several weeks, and the sell price. One of the ways to check this is to look at the interactive chart on finance.yahoo.com for any stock or fund (FSCSX in this case). Choose a technical indicator of Exponential Moving Average (EMA) and select a line period of 200. That is just about the same results an my calculation. Then looking at Historical Prices, you can pick the most recent weekly close. Just watch out for distirbutions. I’ve not found a charting system which adusts for distributions.

Dorsey Wright & Associates, dorseywright.com, produces a weekly podcast each Wednesday. I thing about 60% of the time it covers little which is interesting. On 03/13/14, it covered details of why the market uptrend will continue. One of their favorate sayings is “What is, is.” In other words, what you think about marked direction does not matter. What is, is.

IBD TBP’s Current Outlook is “Uptrend Under Pressure” – not time to invest.

My current investments:
Nordic has a price of 45.10, a sell price 43.97, a relative rank of 11, and is a hold.
SSoftware&ComputerServices has a price of 121.03, a sell price 118.43, a relative rank of 10, and is a hold. Sell price corrected by using the correct closing prices.
SAirTra0nsportation has a price of 60.71, a sell price 59.32, a relative rank of 16, and is a hold.
SBiotechnology has a price of 213.53, a sell price 212.71, a relative rank of 02, and is a hold.
OTCPortfolio has a price of 81.91, a sell price 79.52, a relative rank of 07, 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 – 100% invested
IRA #2 – 100% invested

While I have not finished the monthly numbers, Feb was a good month. My IRA invested in 5 funds was up 5% and my IRA invested in one fund was up 3%. Last year I set up 3 small IRAs to do some other type of investing. The IRA which invests in PDP, PIE, PIZ, and DWAS was up 2%, the IRA which follows in IBD TBP’s Current Outlook was up 5%, and a third IRA which almost follows IBD TBP’s Current Outlook was up 0%. On 25 October (you can review it on flynndj.com) I described the investing method I use for the PDP, PIE, PIZ, and DWAS IRA. The second and third small IRAs follow the method IBD set up in their webinar last year – I mentioned the webinar in July – http://ibdtv.investors.com/ibd-webinars/660901-etf-market-strategy-webinar-061813.aspx. For the second small IRA I invest in TQQQ instead of QQQ and the same for the third, except for the third when IBD suggests you sell half, I sell all, and when IBD suggests you sell all, I buy SQQQ. I also weekly update a 8% stop loss on all of these IRA positions. All three of these smaller IRAs are very simple and easy in their method of investing. It only takes a couple of minutes to manage any of these last three IRAs compared to the couple of hours it takes to do the first two.

For those of you who think the market will continue up read the following http://www.marketwatch.com/story/7-signs-were-near-a-market-top-and-what-to-do-now-2014-03-07.
I do not know which way the market will go.

IBD TBP’s Current Outlook is “Confirmed Uptrend” – time to invest.

My current investments:
Nordic has a price of 46.28, a sell price 43.97, a relative rank of 11, and is a hold.
SSoftware&ComputerServices has a price of 124.66, a sell price 124.16, a relative rank of 08, and is a hold.
SAirTransportation has a price of 62.44, a sell price 59.32, a relative rank of 13, and is a hold.
SBiotechnology has a price of 217.43, a sell price 212.71, a relative rank of 01, and is a hold.
OTCPortfolio has a price of 83.71, a sell price 79.52, a relative rank of 07, 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 – 100% invested
IRA #2 – 100% invested

One of the most interesting events of the month from an ETF point of view was the announcement from PowerShares. They decided to change 10 of their ETFs to be momentum driven run by Dorsey Wright Associates (DWA). DWA previously managed 4 PowerShares ETFs: PDP – DWA Momentum Portfolio(MP), PIE – DWA Emerging Markets MP, PIZ – DWA Developed Markets MP, and DWAS – DWA SmallCap MP. They all use the same type of selection criteria. PDP, for example, looks at a the performance of the 3000 largest US-listed companies and selects the 100 which have the best relative performance. Each quarter they rebalance and reconstitute the portfolio from the best performing of their 3000 universe. Each of the ETFs are managed a similar fashion.  The 10 ETFS are DWA NASDAQ MP, DWA Basic Material MP, DWA Consumer Cyclicals MP, DQP Consumer Staples MP, DWA Energy MP, DWA Financial MP, DWA Healthcare MP, DWA Industrials MP, DWA Technology MP, and DWA Utilities MP. These portfolios are managed on what is performing, not what some manager thinks looks good.
last year I set up a small portfolio to invest in PDP, PIE, PIS, DWAS, and cash with approximately 50% invested in the best performing, 33% in the second best, and 17% invested in the third best on a last 13 week performance basis. Any time cash is one of the top three, none of the lower ranking investments are held. I re-evaluate weekly and use a weekly 8% stop loss order based on the most recent high close. In January I lost 2.7%. Obviously one month does not make a market and I hope to do better.

The Feb24th Chuck Jaffee MoneyLive show featured Martin Pring – you can listen to it online at www.moneylifeshow.com. At about 10 minutes into the program Pring talkes about his long term indicator consisting the S&P500 to GDP ratio as a momentum indicator and taking a moving average of that ratio. That indicator has turned negative 6 times over the last 100 years each times was followed by a bear market. We are now in high risk territory based on that indicator. He likes any commodity based ETFs or resource based stocks.

IBD TBP’s Current Outlook is “Confirmed Uptrend” – time to invest.

My current investments:
Nordic has a price of 46.15, a sell price 43.84, a relative rank of 10, and is a hold.
SSoftware&ComputerServices has a price of 130.69, a sell price 124.16, a relative rank of 03, and is a hold.
SAirTransportation has a price of 61.02, a sell price 58.74, a relative rank of 18, and is a hold.
SBiotechnology has a price of 221.48, a sell price 212.71, a relative rank of 01, and is a hold.
OTCPortfolio has a price of 83.63, a sell price 79.45, a relative rank of 07, 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 – 100% invested
IRA #2 – 100% invested

“Those who cannot remember the past are condemned to repeat it.” from The Life of Reason, Volume One – Reason in Common Sense, by George Santayana written in 1905-1906.
http://www.marketwatch.com/story/scary-1929-market-chart-gains-traction-2014-02-11 is an interesting graph.
http://www.marketwatch.com/story/crash-of-2014-like-1929-youll-never-hear-it-coming-2014-02-19 is an intereting article.

Leo Leydon was a guest on Chuck Jaffe’s Moneylife show, www.moneylifeshow.com, on 21Feb13. You can listen to it online. Leydon starts talking about 6 minutes into the show. He says up, up and away. Follow the trend until it changes.

IBD TBP’s Current Outlook is “Confirmed Uptrend” – time to invest.

My current investments:
Nordic has a price of 45.06, a sell price 42.81, a relative rank of 13, and is a hold.
SSoftware&ComputerServices has a price of 122.45, a sell price 116.33, a relative rank of 06, and is a hold.
SAirTransportation has a price of 60.50, a sell price 58.74, a relative rank of 17, and is a hold.
SBiotechnology has a price of 223.90, a sell price 212.71, a relative rank of 01, and is a hold.
OTCPortfolio has a price of 83.33, a sell price 79.16, a relative rank of 05, 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 – 100% invested
IRA #2 – 100% invested

The S&P500 is a capitalization weighted average. Thus the largest capitalization stock (price * shares) has a much higher influence on the average then the smallest. Apple, Exxon, Google, and Microsoft produce just under 10% of the S&P500 results. The top 10 holdings account for 17.75% of the S&P500 gains and losses. I do not know what the weighting is for the lowest weighted stock, but I’m sure if it moved 10% it would make very little change in the S&P500. One of the intereting things to watch is the SPY (an ETF which mimmics the S&P500) compared to the RSP (an ETF which mimmics the S&P500 if each stock were equal weighted). Currently the SPY is up 3.21% over the last 13 weeks while the RSP is up 3.51%. To me that indicates the smaller weighted stocks are producing more gains than the larger weighted stocks. Thus the market seems to be ok. It is when the largest weighted stocks produce better results than the smaller weighted stocks when there is a problem. That presents a picture where the S&P500 index says everything is great, but in reality most stocks are not going up.

So I was wrong for a week. The Fed came out this week, not last week, and caused a market gain. In the long run just remember that Niall Ferguson and Larry Kotlikoff, two of the best economists in the world, both indicate the total US federal debt is really greater the 210 TRILLION dollars when all programs are counted. That is three times greater than to total gross national product of the world. This cannot end well. Be ready to sell. BTW SGold is the best performing fund on my 13 relative rank list but still #96 on my 39 relative rank list. Some feel that is an indication of a lack of confidence governments, government debt, and paper money.

IBD TBP’s Current Outlook is “Confirmed Uptrend” – time to invest.

My current investments:
SAutomotive has a price of $55.62, a sell price $53.51, a relative rank of 56, and is a sell since it is time to invest.
Nordic has a price of 44.71, a sell price 42.75, a relative rank of 13, and is a hold in my IRA #2.
SSoftware&ComputerServices has a price of 121.61, a sell price 115.72, a relative rank of 06, and is a hold.
SAirTransportation has a price of 59.96, a sell price 58.74, a relative rank of 20, and is a hold.
SBiotechnology has a price of 214.43, a sell price 203.71, a relative rank of 01, and is a hold.

SBiotechnology is my #1 fund (and I own it), but it and SHealthCare my #2 fund, do not have increasing deviations from their 39 week averages so are not buys.
Nordic should have been sold last week in my IRA #1 but I missed it. Nordic will be sold this week even though I have not held it for 90 days and will pay a 1.5% fee.
OTCPortfolio has a price of 82.91, a sell price TBD, a relative rank of 03, and is a buy in both IRA #1 and IRA #2.

My portfolio changes this weekend:
IRA #1 – Exchange Nordic for OTCPortfolio
IRA #2 – Exchange SAutomotive for OTCPortfolio

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

I really thought the Fed would come out and make some statements to cause the market to go up, they did not, but perhaps they are working behind the scene. I am surprised how well the market did this week. I still think the market is due for a greater decline but I’ve been wrong before.
I am a little pressed for time this weekend, the tax business is keeping me busy all Sat. and Disney all Sun.

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

My current investments:
SAutomotive has a price of $54.03, a sell price $53.51, a relative rank of 75, and will be sold when I need to exchange it for another fund or it passes the sell price.
Nordic has a price of 44.00, a sell price 42.75, a relative rank of 11, and is a hold.
SSoftware&ComputerServices has a price of 118.66, a sell price 114.22, a relative rank of 05, and is a hold.
SAirTransportation has a price of 59.43, a sell price 58.74, a relative rank of 12, and is a hold.
SBiotechnology has a price of 205.51, a sell price 197.07, a relative rank of 01, 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 – 100% invested
IRA #2 – 100% invested

Based on a study by Ned Davis, since 1928 the market the S&P 500 has fallen 5% or more 294 times, 10% or more 94 times, 20% or more 24 times. That says about 3+ times a year, it falls 5% or more, one time a year 10% or more, and every 4 years 20%+. Perhaps this is the time, but since the high in January to the low in January, the S&P500 has only fallen 4.2%. Not very exciting yet. However, the 10Jan14 MoneyLife show, which Chuck Jaffe produces daily, featured Brad Lamensdorf, Co-Portfolio Manger of the Ranger Equity Bear ETF (HDGE). He points out that the sentiment measures are at 30 year extremes, the bear survey is the lowest it has been for the last 30 year, the bull sentiment is the at 73% after which the market averages a 16% fall, and he thinks it is time to cash out. The next correction is going to be “very brutal.”

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

My current investments:
SAutomotive has a price of $53.73, a sell price $53.51, a relative rank of 70, and will be sold when I need to exchange it for another fund or it passes the sell price.
Nordic has a price of 42.88, a sell price 42.75, a relative rank of 18, and is a hold.
SSoftware&ComputerServices has a price of 118.53, a sell price 114.22, a relative rank of 03, and is a hold.
SAirTransportation has a price of 59.51, a sell price 58.74, a relative rank of 07, and is a hold.
SBiotechnology has a price of 205.55, a sell price 197.07, a relative rank of 01, and is a hold.
Every fund is close to selling, but not there yet.

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

The views of Jim Rogers – https://www.youtube.com/watch?v=LGWK7zDCXI0 . Worth watching.

Friday after the market close, Investors Daily changed the Market outlook to “Uptrend Under Pressure”. It seems like IBD’s market outlook is changing weekly. All of the funds I own went down, but none down enough to sell. On my list of 130 Fidelity mutual funds, only SGold, RealEstateIncome, MunicapalIncome, and StrategicIncome are rated as buy based on their two week improving deviation from their moving average, yet they rank 101, 129, 109, and 110 on my list of best funds. My own feeling is that this current blip is just going to make the Fed decide to print more money or at least start making statements about doing it. The big dip is coming when high income taxpayers start to see how much their taxes have increased, as Consuelo Mack, the host of Wealthtrack, said on her 13Dec show “You might not know it, but your about to get swamped by a wave of higher taxes.”

Lawrence Summers – “America succeeds by raising everybody up. It doesn’t succeed by tearing anybody down,” the former Obama economic adviser and Clinton Treasury secretary told CNBC’s “Squawk Box” on Thursday at the World Economic Forum in Davos, Switzerland. “The rhetoric of envy and the rhetoric of tearing down, I don’t think, is the right rhetoric for America’s leaders.” http://www.cnbc.com/id/101358302

IBD TBP’s Current Outlook is “Uptrend Under Pressure” – not a time to invest.

My current investments:
SAutomotive has a price of $54.15, a sell price $53.51, a relative rank of 60, and will be sold when I need to exchange it for another fund or it passes the sell price.
Nordic has a price of 43.84, a sell price 42.75, a relative rank of 05, and is a hold.
SSoftware&ComputerServices has a price of 117.00, a sell price 114.22, a relative rank of 04, and is a hold.
SAirTransportation has a price of 60.57, a sell price 58.74, a relative rank of 03, and is a hold.
SBiotechnology has a price of 206.00, a sell price 197.07, a relative rank of 01, 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 – 100% invested
IRA #2 – 100% invested