Monday, January 30, 2012

Daily Market Snapshot for 01 30 2012

The market is digesting some of it's
recent gains. A bit of a pullback
at this point would not be a bad thing.
After being down 130 points, the DOW fought it's way back to down just -.05%. The European debt crisis is once again gaining attention due to the upcoming important meeting in Brussels. This may pressure the market for another couple days.

Dow Jones Industrial Average
gave a neutral reading (yellow).
The only yellow in the
 current sea of green
The intermediate term trend remains up. The short term trend is displaying some negativity. I believe this will be the pause that refreshes.

(Click on the charts for easier viewing)


Equity Sector Rotation

Green represents the best performing sectors.
We avoid the red, unless bottom fishing.

Our big cap tech stocks held up very well today as the market sold off this morning. It is always a nice confirmation of a good buy decision when they behave so well. I'm talking about Apple and IBM, holdings in our Core Equity folio.

We have avoided the consumer staples since the first of the year. There comes a point when some of these oversold sectors offer some good bottom fishing opportunities. I did pick up some Phillip Morris today when it bounced off it's lower bollinger band on an analyst upgrade. It's currently yielding a very high 5.72%.

Phillip Morris

 We have a good bit of cash on hand. I feel comfortable buying the upcoming dip.

Friday, January 27, 2012

Market Direction Model Nuances

I have prepared a brief  slide presentation to help tie together the Market Direction Model and the Daily Market Snapshot. At a minimum, a cursery understanding of what message these two powerful visuals convey will benefit you greatly.

The MDM and Snapshot, and how they relate to the management your money, in sometimes volitile and  frightening times, will help bring clarity to the steps I take to both protect and grow your wealth.

You can click on the MDM image to the right to view this brief presentation now or visit the GWM web-site to view the slide show at your convenience.

(* Hint - If you adjust the screen size of the slides properly, all you will have to do is click the advance arrow a single time to proceed to each new slide.)

Daily Market Snapshot 01 27 2012

Daily Market Snapshot

The Market had a rather lackluster week all in all.

Market Direction Model
Short Term - The market may pull back or at least
pause to digest some of  the recent gains.

Intermediate Term - the market looks positve


Gold continues to shine!
I addeed to our gold position (GLD)

Wednesday, January 25, 2012

Daily Market Snapshot 01 25 2012

Daily Market Snapshot

Apple's stellar earnings and Ben Bernanke's comments
propel the market higher.


Gold shot up immediately on the Bernanke comments.


Apple's stellar quarterly earnings report and Bernanke's dovish comments added the needed gas in the tank to send gold and the markets higher. Bernanke seemed to open the door for the possibility of more quantitative easing (QE-3). Moreover, Helicopter Ben said the Fed would hold down interest rates through the end of 2014.

I  re-deployed a portion of available account cash prior to the Fed Chief's comments.

Today's gains moved us further into overbought territory. A pullback of more that a few days would have been helpful. That being said, we still need to have a stake in a market that is on the move.


Daily Market Snapshot 01 24 2012

The Market is loosing steam.

Apple's blowout earnings will propel the NASDAQ on Wednesday. I reduced all equity exposure yesterday, including Apple. Apple was declining until the big upside surprise. We still have a 10%  Apple position in the Core Equity folio.

Monday, January 23, 2012

Daily Market Snapshot 01 23 2012

In bullish cycles the market can remain
overbought for extended periods of time.

The far-right green bar in the Snapshot came down to about the 13% level. This tells us that last week's very overbought condition was somewhat relieved today.

Market Direction Model
All Green on 01 23 2012

The Market Direction Model remains positive.  I suspect any pullback would be bought with this kind of underlying market strength.

Equity Sector Rotation

Money continues to rotate out of the defensive sectors, consumer staple and utilities.
Energy stocks are coming back into vogue.

I did buy a position in XLE (Energy ETF) today in the GWM Sector Rotation folio.

Additionally, I took a full position in GLD (Gold bullion ETF) in the GWM Inflation Hedges folio.

Flexible Income Sector Rotation

Preferred Stocks and Convertible bonds remain the place to be.
Junk Bonds have been gaining strength.
I will be looking to take another inverse position
in US Treasuries if they continue to slide.

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.

Saturday, January 21, 2012

Boosting our Returns in the Flexible Income Folio

GWM Flexible Income Folio

Yields have been rising on certain bonds the last few days, on the twenty year US Treasury in particular. Since price moves inverse to yield, the price of these bonds have been falling. Corporate bonds have been having difficulty as well. The volatility of bonds in general has been an issue for our Flexible Income Folio.

All GWM Model Portfolios have money allocated to the The Flexible Income folio. Golden Years has a 70% allocation, In-Betweener 50% and the Go-Getter folio has a 25% allocation. I have had to become more active in the management of this folio due to the increased volatility of traditional bonds.

I have been seeking to diversify by acquiring positions in different types of income related assets, i.e., convertible bonds and preferred stocks. This has helped.

Another method of battling periods of negative performance in bonds is to hedge the folio with inverse instruments such as the ProShares UltraShort Lehman 20+ Year Treasury ETF (TBT).

TBT is a powerful tool, but must be used with precise timing because it is a leveraged double edged sword.

Last week I took a 10% TBT position in our Flexible Income folio. We generated a quick 5%+ return in just a few days. I closed it out on Friday, but will be using it periodically in the future when clear opportunities present themselves.

Trade Analysis

My decision to go long was based on the use of the Effective Volume Indicator and a heads up by it's creator Pascal Willain. The following charts shows that the big boys (Large Players) were buying TBT while the general investing public (Small Players) were sitting idle. Most of the time it is wise to follow the big money. They can and do move the markets.

ProShares UltraShort Lehman 20+ Year Treasury ETF
(Click on the charts for easier viewing)

1 Minute Chart with Effective Volume Indicator
TBT Daily Chart

Nice Three Day Gain

Friday, January 20, 2012

Microsoft Shines 01 20 2012

The market was mixed, with the Dow
up strong and NASDAQ down slightly.
While the Dow was up, the internals were a little soft. The S&P 500 and NASDAQ  closed flat on the day.

We have had a good run in the last couple weeks. I took some more cards off the table today; the market is now getting pretty pricey as evidenced by the Daily Market Snapshot configuration.

I will reassess the market condition next week.

Earnings Season - Microsoft Shines

It take a lot of buying power to move a 250 Billion Dollar company this much in a single day.
We were in the right place at the right time.

We continue to hold MSFT.

Thursday, January 19, 2012

Daily Market Snapshot 01 19 2012

Daily Market Snapshot

The Bar Chart side of the Snapshot is telling us that better than 25%
of the stocks in the S&P 1500 are overbought.
We need to further reduce our exposure to overbought sectors.

Earnings Season - Google Misses

Google missed the street's target on earnings. The stock is being punished in after hours trading. As I write Google is down about 7.5%.

As you know, I like to follow the buying and selling activity of the big money players in the market, the hedge funds, mutual funds, etc. I use Pascal Willain's Effective Volume Indicator to accomplish this research.

The Large Players don't always get it right. The following chart shows that the big boys were making large Google purchases going into today's close.

I sold our Google share prior to today's earnings report.

Google chart at the close...

Google after hours.  Ouch....

Wednesday, January 18, 2012

Daily Market Snapshot 01 18 2012

The market had a great day.

The market had a very good day on Wednesday. The high-tech sector led the charge. Semi-conductors really shined.

The S&P 500 grinds higher as volatility is contained.

I took the opportunity to take profits in some of our winners, as well as, adding a few new positions. We are in the upper region of the Bollinger Bands and the day count of the current up cycle has already surpassed the last couple up cycles.  The market is strong, but a pullback or at least a pause in the uptrend  is likely before long.

Tuesday, January 17, 2012

Daily Market Snapshot 01 17 2012

Daily Market Snapshot

The market closed off its highs of the day, but still finished up.

Market Direction Model

Green is good!

I took profit in a number of areas today, including the gold miners ETF (GDX). No one ever went broke taking a profit.

Monday, January 16, 2012

Margaret Thatcher's Last Stand Against Socialism

The late Margaret Thatcher shows her spunk and great humor as she defends her stance against socialism in a meeting of Parliment.

Friday, January 13, 2012

Sector Rotation 01 13 2012

Gave back just a little on Friday

The Euro downgrade weighed on the market on Friday. Stocks reacted much less than they would have a couple months ago. That is a good sign.

Equity Sector Rotation

The defensive sectors, last year's best performing sectors, are lagging in the new year. Utilities and consumer staples are now definitely out of favor.

Utilities & Consumer Staples are declining.

Flexible Income Sectors

US Select Dividend, US Credit Bonds and Convertible Bonds are the best performing Income Sectors at the moment. The 20 Year US Treasury is once again rising due to the current focus on the Euro debt crisis.
Green is Good - Yellow Nuetral - Red is Bad

I have re-positioned GWM Model Portfolios out of underperforming sectors and into the best performing sectors. The market feels like it wants to go higher.

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.

Wednesday, January 11, 2012

Daily Market Snapshot 01 11 2012

Daily Market Snapshot

Steady as she goes!
Standard & Poors 500 Index Chart

Volatility continues to drop as stocks hold steady.

Took Profits on our Oil Sector Holdings on Tuesday

Volatility has been trending down recently. Moreover, correlations have also been lessening. This helps our indicators function better.

I took profits in our oil sector holding Tuesday morning based on the following analysis. We were holding  xle, cog, cvx, xom and glng.This proved to be very timely as prices dropped dramtically on Wednesday.

My sell decision was based on two great indicators:

Bollinger Bands
Effective Volume

(Click on chart for easier viewing)

Sell signal on Tuesday morning

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.

Tuesday, January 10, 2012

Understanding the Daily Market Snapshot


Daily Market Snapshot

The market is gaining strength.

I have produced a video titled "Understanding the Daily Market Snapshot", as well as an accompanying pdf slide show. The links to both are located on the GWM website under the main menu [Client] tab.

I believe all investors will benefit a great deal by learning about this valuable tool. You can view this 12 1/2 minute video now buy clicking on the Daily Market Snapshot graphic on the right.  If you choose to view it at a later time visit the GWM website.

Understanding the Daily Market Snapshot