Market Comment 09 27 11

For all the recent breath-taking rises and falls in the market we have really gone nowhere of late. If the following chart seems confusing to you, you are not alone. At times like these the wisest thing to do is let the institutions with there algorithmic blackbox trading systems battle it out on their own, while we sit patiently and safely on the sidelines.

One market segment that has shown significant bearish signs is the small-cap Russell 2000 Index. The bulls are losing this battle at the moment. I added to our position in RWM (INVERSE SMALL CAP ETF) today as the market rallied. The following chart reveals a small head & shoulders pattern that has developed. This pattern can portend an imminent decline, just as a larger H&S pattern foretold the decline in the S&P 500 last month.

I took a 1/2 position in Gold today. I am thinking that the bottom might be found at the 1,550 area.. I'll take the other 1/2 position opportunistically, either on an upside breakout or after a decline of 100 points.

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Market Comment 09 21 2011

For the past couple weeks I have been patiently awaiting the Federal Reserve's announcement on their next course of action to help our ailing economy. Well, we got the news today and the market did not like it. The Dow Jones Industrial Average dropped over 283 points.

In a plan named "Operation Twist", the Fed plans on changing the composition of their balance sheet over the next year or so by selling short dated maturity treasuries and buying longer term treasuries and in particular mortgage backed issues. I think the intent is two-fold; one, to help lower mortgage rates, and two, to pressure banks to loan more money to customers.


All GWM Model portfolios should show a gain today due to our predominant positions in high quality bonds and US Gov treasuries. Additionally, our positions in RWM and EUO made money. RWM is an inverse small cap ETF and EUO is a leveraged pairs trade ETF that goes long the US Dollar while shorting the Euro. Apple and Amazon gave back just a fraction. After gaining big yesterday, GDX, our gold miners ETF, gave back about 2% today.

The market has been too volatile lately to get committed in a big way to either the long side or the short side. September, which is historically the worst month of the year for stocks, will soon be in the rear view mirror. The market usually bottoms in October, which sets the stage for the seasonally strong part of the calendar, November through April.

The benefit of watching the market closely during times of distress is that the really strong investment candidates reveal themselves. The stocks that held up the best throughout the turmoil will make up my high conviction buy list when the dust settles.

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http://www.gerritzwealthmanagement.com/

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Market Comment 09 13 11

Our Market Direction Model is now in cash. Institutions are now accumulating positions. Yesterday the big players stepped in to buy in the last half hour of trading, pushing the markets up to finish with a gain after a morning sell-off.

I believe a bounce is in the making. This will not be a trend change, just a bounce.

I plan on eliminating some short positions and buying a few equities for a short term hold.

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Market Comment 09 09 11

The European Debt crisis weighed on the US stock market today.

The only equity position we have on the books is Permanent Portfolio (PRPFX). Much of PRPFX is invested in gold, silver and treasuries and only a partial exposure to growth stocks.

All GWM Model portfolios should show gains today as the stock market slumps.

I took profits in our 1X and 2X short positions in small cap equities and bought more US Treasuries.

GWM Market Direction Model Change!

The GWM Long/Short Folio will now seek good entry points for inverse positions (shorting the market).  For now we will avoid taking on new equity positions. Furthermore, we will reduce or eliminate current equity positions and favor high quality bonds and inverse equity positions.

Precious metals positions will be maintained or increased
based on market behavior.

Upcoming stock market bounces or rallies will be sold rather than bought as they are likely to fail. I will not be buying the dip initially. 

Visit us at

http://www.gerritzwealthmanagement.com/

This blog post does not constitute an offer of investment advice. This blog is only provided for educational purposes. Please read the Important Blog Disclosure posted in the right channel bar.

Friday Morning Jobs Report - NO NEW JOBS

The Bureau of Labor Staticstics issued the following bad news report this morning. This is clearly confirmation that the economy is in trouble. The markets responded immediately by selling off. We now have to wait for the President's joint congress address next week to see if he has a meaningful solution.

In a paradoxical way the market may actually welcome the bad news as it could be an incentive for the Fed to rekindle some form of quatitative easing. So the market may be in a wait and see mode until the upcoming two day Fed meeting next week.

"Nonfarm payroll employment was unchanged (0) in August, and the unemployment


rate held at 9.1 percent, the U.S. Bureau of Labor Statistics reported today.

Employment in most major industries changed little over the month. Health

care continued to add jobs, and a decline in information employment reflected

a strike. Government employment continued to trend down, despite the return

of workers from a partial government shutdown in Minnesota."

The Gerritz Letter

The September issue of The Gerritz Letter has been published. It should be in your mailbox now.
 
It will also be posted on the GWM website later this morning.
 
http://www.gerritzwealthmanagement.com/