Author: Flynn

After the market action on Thursday, Investors Business Daily changed their market outlook from “confirmed uptrend” to “uptrend under pressure.” Basically that says the trend may be changing. The prevailing opinion seems to be that as long as the market continues to respond to the federal reserve board as they print more and more money, the market will continue up.

A review of a chart of the last 12 months of the S&P500 (^gspc) on finance.yahoo.com shows a series of higher highs and higher lows as the trend continues upward. The same is true of SBiotechnology (fbiox) except the high made in early October was not exceeded by the high made in later October and the corresponding low was lower than the previous low. This may be a sign of a trend change. SBiotechnology has a corresponding potential trend change sign in June from which it recovered.

The sum of the deviations (1123,974,913) is not up for the last two weeks – not a 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 invest.

My current investments:
SAutomotive has a price of $54.76, a sell price $53.10, a relative rank of 13, and is a hold.
SBiotechnology has a price of $164.12, a sell price $169.78, and is a sell.
JapanSmallerCompanies has a price of $13.65, a sell price of $13.56, a relative rank of 44, and is a hold until I need the money to invest in a better fund or if falls a little more
Nordic has a price of 44.12, a sell price 41.91, a relative rank of 02, 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 – 60% invested

John Stossel has a weekly show on the Fox Business Network. I DVR it every week, but you can also watch it at www.foxbusiness.com/on-air/stossel. It looks like it takes about two weeks before the current episode is available on the web site. The show he presented on 10/24 featured the Federal Reserve Board. The guys who have spent 3+ trillion dollars (and continue to spend 1 trillion a year) bailing out banks (domestic and foreign), corporations, and the market without even a vote in congress. The guys who with loose money and then tight money caused the depression, with loose money caused the inflation of the 70s, with loose money caused tech boom of the 90s and the housing bust of the 00s. The guys whose loose money policies (i.e. 0% interest rates) make the poor poorer, destroy the middle class (how much are you earning on your CDs), and make the rich richer. With the 0% interest rates, it will be interesting to see which will happen first: another housing market crash, a stock market crash, a bit of extreme inflation, or maybe all 3. Since the fed was put in charge of the money supply, the value of the dollar has declined more than 95% (and they have redefined inflation 20 times). His show features excerpts from the movie “Money for Nothing.” Looks like an intereting movie.

Fidelity Nortic fund has an interesting history. If I remember correctly, about 30 years ago Fidelity started some country funds – the one I remember was the United Kingdom fund. They were not a great success and were merged out of existance. Then about 20 years ago, they did it again. Again they were merged out of existance, except for Nortic. It seems, since it was doing much better than the other country funds, the shareholders voted not to merge the fund and it is doing well again today.

The sum of the deviations (1120,1123,974) is not up for the last two weeks – not a 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 invest.

My current investments:
SAutomotive has a price of $55.33, a sell price $53.10, a relative rank of 05, and is a hold.
SBiotechnology has a price of $171.03, a sell price $169.78, a relative rank of 08, and is a hold.
JapanSmallerCompanies has a price of $13.69, a sell price of $13.56, a relative rank of 37, and is a hold until I need the money to invest in a better fund or if falla a little more
Nordic has a price of 43.57, a sell price 41.39, a relative rank of 02, and is a buy.

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

Dorsey Wright & Associates is a money management and research firm. They produce a weekly podcast (which you can listen to with windows media) on their web site (dorseywright.com) and the one on 10/16 was rather exceptional. They started by indicating the market had moved into a structural bull market which in the past has from 8+ to 20+ years. The podcast discusses the method they manage their ETFs. DWA manages 4 ETFs: PDP which holds ~100 mid and large cap stocks, DWAS which holds ~200 small cap stocks, PIE which holds ~100 emerging market stocks, and PIZ which holds ~100 developed market stocks. Every quarter they evaluate the the hundreds of stocks which meet the ETF’s criteria. They then select the best performing stocks and adjust the holdings of each fund. In the podcast they discuss a global technical leaders strategy of investing in the four ETFS and cash. In the best perfroming fund 50% of your portfolio is invested, 33% in the second best, and 17% in the third best. Over the last 3 months PIZ is up 13%, DWAS is up 7%, PDP is up 5%, PIE is up 3% and cash is up 0%.

Jim Rogers discusses investments: http://www.youtube.com/watch?v=_WiuofkAAWs

The sum of the deviations (869,1120,1123) is up for the last two weeks – 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 up – time to invest.

My current investments:
SAutomotive has a price of $55.55, a sell price $53.10, a relative rank of 06, and is a hold.
SBiotechnology has a price of $175.44, a sell price $169.78, a relative rank of 02, and is a hold.
JapanSmallerCompanies has a price of $14.07, a sell price of $13.56, a relative rank of 09, and is a hold.
Nordic has a price of 44.81, a sell price TBD, a relative rank of 01, and is a buy.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Invest 20% in Nordic.

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

Chuck Jaffee produces a market show which you can hear at www.moneylifeshow.com every day. On 04Oct he interview Elaine Garzarelli on her view of the market. Garzarelli has been generally, correctly predicting the market for 30+ years. Listening to her interview is worth doing. She currently thinks the up trend will continue. Jaffee’s show is interesting and features many market money managers every day. I listen to it on the downloaded podcasts.
This week Investors Business Daily switched from “uptrend under pressure” to “confirmed uptrend” which say now is the time to buy.

Jim Rogers:US is exceptional…it’s largest debt nation in the world!
http://www.jimrogersinvestments.com/2013/10/jim-rogers-cut-spending-with-chainsaw.html

Not my only excuse, but one contribution to my slowness in publishing this weekly email is the Samsung Windows 8 computer I purchased last November. The first one lasted a week before it was replaced – bad sound. I started documenting the BSOD (blue screens of death) on my current machine in July and over the nest 3 months has 50+, not counting the sound which quit. So I took it back to the Microsoft store on 05Oct, they reimaged it, and I got it back on 12Oct. They did give me a list of the programs they deleted. I have had 7 BSODs since then – not ready for prime time in my opinion. Back to the Microsoft store this weekend. With every BSOD you lose what you were working on. Sort of like the old mainframe days when the minute you saw lightning or the lights flicker you would yell “Save” so everyone would save their work before the machine died. My current BSODs do not give any warning.

The sum of the deviations (874,869,1120) 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 time to invest.

My current investments:
SAutomotive has a price of $55.89, a sell price $53.10, a relative rank of 01, and is a hold.
SBiotechnology has a price of $172.46, a sell price $169.78, a relative rank of 04, and is a hold. SBiotechnology has recovered enough to it is not a sell, and also I’ve owned it 30+ days so I can sell it without Fidelity yelling at me.
JapanSmallerCompanies has a price of $14.27, a sell price of $13.56, a relative rank of 02, 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 – 60% invested

SAutomotive and JapanSmallerCompanies are doing ok, but SBiotechnology is not. Based on just the 5% decline from the highest weekly close since owned, it should be sold and I have a 3.2% loss on my position. However, I have not owned it for 30 days and do not want to violate the dumb, stupid Fidelity rule on round trip trades. They get nasty. Next week I will have owned it 30 days and we shall see what happens.

The sum of the deviations (899,874,869) 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 time to invest.

My current investments:
SAutomotive has a price of $55.03, a sell price $52.28, a relative rank of 01, and is a hold.
SBiotechnology has a price of $166.97, a sell price $169.78, a relative rank of 05, and is a sell – see above.
JapanSmallerCompanies has a price of $13.95, a sell price of $13.50, a relative rank of 02, 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 – 60% invested

So the news says the US government is shut down – based on reports from the US administration. 17% of the government is shut down, 83% is not shut down, and many employees have been recalled. (We are also going to pay them for not working.) 83% is the same number of students who attend high school in New York on an average day. Maybe New York high schools are shut down. It is also interesting the the EPA says 93% of their employees are not essential – I think that is 7% too low. 

The news says US government is going to default and destroy the world economy based on reports from the US administration. The US is not going to default (this time) – it gets twice the income needed to pay the interest every day – now some programs may have to be cut. Any number of US administration officials and news outlets are projecting disaster. The US public is being lied to and played for suckers so the US administration can get what it wants. Keep lying and the public will believe and worse, it may come true. I think this month’s market actions are an indication these lies are working and it is our investments the lies are killing.

Investors Business Daily (IBD) changed the market outlook to “Market in Correction” Tuesday PM.

I wrote the above on Wednesday, then BHO nominated Yellen to become next fed chief. The belief is her views on printing money makes Bernanke look like a tight wad. The market believing bigger floods of money are coming, took off.

On Thursday. IBD changed the market outlook to “Uprend under pressure” on Wednesday PM.

The Dividend Aristocrats are S&P 500 constituents that have increased their dividend payouts for 25 consecutive years. Currently there are 54 stocks on the list. This week a new ETF was launched which purchases these stocks – NOBL. It may be a good ETF to watch – http://investorplace.com/2013/10/dividend-aristocrats-etf-nobl-sdy/

This last week and next week until Wednesday is excessively busy with tax filings for those with extensions. At this time I do not have time to produce my normal price lists. I will put out an update as soon as I can.

SAutomotive and JapanSmallerCompanies are doing ok, but SBiotechnology is not. Based on just the 5% decline from the highest weekly close since owned, it should be sold and I have a 3.2% loss on my position. However, I have not owned it for 30 days and do not want to violate the dumb, stupid Fidelity rule on round trip trades. They get nasty. Next week I will have owned it 30 days and we shall see what happens.

I received an email from TraderPlanet offering me a free quarterly subscription to the TraderPlanet Journal. The issue available now starts with an article titled “Bill O’Neil Explains Why Growth Investing Still Works.” Bill O’Neil is owner and publisher of Investors Business Daily (IBD), author of several books, and inventor of the CANSLIM method of investing. You might want to subscribe at www.traderplanet.com/subscribe/.

Each Saturday afternoon IBD has a radio show (www.investors.com/radioshow/) and archives the show when it is completed. Over the next 3 Saturdays, celebrating their 100th radio show, they will have an interview with Bill O’Neil on investing. When you get the opportunity, please listen. You can also get the shows in ipod format. IBD has changed the Market Pulse Current Outlook to “Uptrend under pressure” due to the market results on Thursday. This translates to invest with caution, trent may be turning.

I was working with a tax client this week who was going to get 40k in capital gain with no other taxable income. He was surprised to lean there would be no tax on that gain. He was also surprised when I showed him if interest rates doubled, his bonds would lose 50% in value. He felt bonds were a risk free investment. It is true if you own individual bonds you will eventually get your money back (for what it’s worth) but if you own a fund, that is not true. At finance.yahoo.com take a look at the 6 months trend for TLT – the ishare barclays 20+ year treasury bond. It is only down about 10% over the last 6 months. Since it yields about 3%, owners lost 3+ years of interest with this decline. So much for risk free investments.

The sum of the deviations (997,899,874) 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 time to invest.

My current investments:
SAutomotive has a price of $54.55, a sell price $52.05, a relative rank of 02, and is a hold.
SBiotechnology has a price of $178.72, a sell price $169.78, a relative rank of 01, and is a hold.
JapanSmallerCompanies has a price of $13.83, a sell price of $13.500, a relative rank of 03, 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 – 60% invested

The Fed continues to buy bonds at the rate of $85b per month to keep interest rates down, printing money to do it. One of the important reasons for that is that if treasury bond interest rates climbed to normal levels the US would be even more bankrupt that it is today. Reviewing a chart of TBF – ProShares Short 20+ Treasury – shows all was fine until late last year and through April this year the market the Fed programs were working. Long about April the market started ignoring the Fed and sending rates up and bond prices down.

etfdb.com contains a tool to find which ETF can be used to replace mutual funds you may be condidering. Fidelity Select Technology FBIOX has 30 ETSs listed as being similar. In looking at the 30, the best two are PBE and XBI both of which performed just about the same as FBIOX over the last couple of months. The advantage of the ETF is that you can buy or sell it at any time the market is open, have a stop loss order to limit losses, and do not have to contend with Fidelity’s stupid rules on round trip trades. However, if you buy or sell an ETF you have to pay a commission – Fidelity changes me $8. Fidelity Select Automotive has 20 ETFs which are similar, but only 4 are performing as well as FSAVX. Most ETFs are still fixed portfolios, however as more managed ETFs are offered I expect they will perform better. I imagine Fidelity has not offered ETFs which match their mutual funds because they make more money on mutual funds. One of the more interesting ETFs is TBAR. This is an ETF which invests in GLD (gold) but switches to Tbills when GLD is below its 200 day moving average. At finance.yahoo.com you can view a chart of TBAR and compare it to GLD. TBAR is less then 2 years old and GLD has not done much on the up side in the last two years. It will be interesting to watch.

I could repeat the same comments I made last week except refering to JapanSmallerCompanies this week. JapanSmallerCompanies has 14 ETFs which etfdb.com are alternatives. The best two of these are JPP and SCJ, neither preformed as well as JapanSmallerCompanies

The sum of the deviations (617,839,997) is up for the last two weeks – 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 up – time to invest.

My current investments:
SAutomotive has a price of $54.55, a sell price $51.82, a relative rank of 04, and is a hold.
SBiotechnology has a price of $174.72, a sell price 165.98, a relative rank of 01, and is a hold.
JapanSmallerCompanies has a price of $13.96, a sell price TBD, a relative rank of 02, and is a buy.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Invest 20% in JapanSmallerCompanies

My portfolio market exposure after this weekend’s changes
IRA #1 – 100% invested
IRA #2 – 60% invested

Investors Business daily changed to Uptrend Confirmed on 09Sep13 after the gain the market had on Monday. Hopefully this will not be an average September. In one of his latest youtube videos, Jim Rogers suggest his investment in oil, gold, and other commodities are going to go much higher and stocks are going down. He also points out that with the slow end of artificially low interest rates, India, Indonesia, and Turkey are going to be hit hard. For the first time in history the world has been flooded with printed money and when it stops there will be panic in markets and it will be a huge mess. He feels the decline will be worse than 2008/09.

I am sure suprised the market is going so well and wish I had not sold SBiotechnology in the past. However, I never know how deep a decline in price is going. A couple of year ago I sold LatinAmerica 5 times. The 5th time it went from 70+ to 30- and that was a price change worth avoiding.

The sum of the deviations (414,617,839) is up for the last two weeks – 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 up – time to invest.

My current investments:
SAutomotive has a price of $53.63, a sell price $50.95, a relative rank of 02, and is a hold.
SBiotechnology has a price of $172.17, a sell price TBD, a relative rank of 01, and is a buy.

My portfolio changes this weekend:
IRA #1 – None
IRA #2 – Invest 20% in SBiotechnology

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