Daiy Market Snaphot 02 29 2012

Daily Market Snapshot

The Bears are currently winning the battle for control.

Point Score View

Market Direction Model

 

 
Due to growing weakness in market internals, I did reduce our exposure to risk today. At this point, I am more interested in protecting our profits than fighting what appears to be an upcoming uphill battle.
 
 

Inflation Hedges Folio

 

Gold, silver and commodity prices declined in a big way on very heavy volume today. It was clear that the institutional players were in a big rush to exit these markets. The selloff seemed to be sparked by comments made by Ben Bernanke during his congressional testimony today. He seemed to imply that further Fed easing or quantitative easing was off the table for the foreseeable future. I did sell our precious metal and commodity holdings today.

Gold Chart

 

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.

Daily Market Snapshot 02 28 2012

Daily Market Snapshot

We are seeing some deterioration.

 
 

Market Direction Model

The Small caps generally lead the market up or down.
The small caps have been weak. This is a negative.

 
 

%B Point Score

 

The %B Point Score is a litte different method of looking at the same data as the Daily Market Snapshot.
A -11 point score is a shot across the bow.

 
Continued signs of  internal weakness is a concern. Stock market futures are up for the last day of the month. I am inclined to begin reducing our risk exposure.
 
 
 
 

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.

Daily Market Snapshot 02 27 2012

A pattern of morning sell offs followed by afternoon recoveries continues.
The Dow has yet to close above the 13,000 resistance level.
Just speculation, but I think it will close above that level this week.

Flexible Income Folio

US Preferred Stock Fund is one our holdings in the Flexible Income folio.

I like to superimpose two Bollinger Bands over a price chart. This gives us an easy visual method to determine whether an investment is trending or not. The US Preferred Fund is definitely trending. This ETF continues to provide some nice appreciation, as well as an above average yield.

Daily Market Snapshot

Video Spotlight - Cars that run on natural Gas

Gas prices are going higher. This will be a big problem for energy consumers around the world. Natural gas can be used to fuel cars, trucks and locomotives. Natural gas is dirt cheap. Click the link below to view a Cramer interview with the CEO of Westport Innovations. Westport has developed engines that can run on either gas or compressed natural gas.




http://www.gerritzwealthmanagement.com/cars-that-run-on-natural-gas-westport-innovations/

Daily Market Snapshot 02 23 2012

The market bouned back today.

The market regained its footing today. After a nice run, the market will often correct through either price or time. This is generally referred to as consolidation. It is both healthy and should be expected.

Well, we had about a week of consolidation in both our Flexible Income Folio and our equity folios as well. Maybe today's performance marks the beginning of the trend higher; we will see. 

I think the the following charts paint the picture better than my words.

Flexible Income Folio

 

 

After a week of consolidation the Flexible Income Folio
is rising once again.

New America Folio

The New America Folio also shows the recent consolidation and a possible
resumption of the trend.

Inflation Hedges Folio

Gold ETF (GLD)

With the printing presses in operation around the world,
Gold is once again making a run for its old highs.

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.

Daily Market Snapshot 02 22 2012

The market made a weak showing today.

The market is getting a bit tired at this point. It has been a good run and perhaps it is time for a pause.

We are seeing some deterioration
in the Market Direction Model as well.

The spector of higher energy prices seems to be causing investors some distress.

Sector Performance

Materials and Energy have been the top
performers so far this week. Consumer Dicretionary and
Financials have turned in the worst performance.

In the past few days I have added positions in the energy and materials sectors to all model portfolios. I also liquidated positions in the financial and most consumer discretionary sectors.

If our market indicators continue to deteriorate I will not hesitate to protect client accounts.

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.

K-1 Tax Forms

You more that likely have recieved some K-1 Forms from various unfamiliar companies. IRA accounts are exempt from having to files these is they total less that $1,000 total income. That is the case for most all of the accounts under my management. They are generated due a rule that is referred to as Unrelated Taxable Business Income. Just save them along with your tax receipts. You don't need to enter them in your tax returns. These are sent as a result of us investing in commodity or currency related assets from time to time.

Your custodian may send you a letter asking you to foward the K-1s to them, but, only if they exceed the dollar amount mentioned above.

Call if you have any questions concerning these K-1 forms.

Kudos to Ian!

Ian Woodword
Investment Analyst and
HGSI Group Mentor

You have heard me speak often about the HGS Investors group and Ian Woodward in particular. Ian is an inspiration to all that are lucky enough to come into contact with him. John Bollinger, the creator of the Bollinger bands concept, had some kind words for Ian when he was interviewed in the upcoming March issue of "Technical Analysis of Stocks and Commodities". Here is what Bollinger says in part:


“A little more than two years ago, I had the pleasure of spending time with Ian Woodward, who has been doing some interesting things with Bollinger Bands. It was an inspiring time for me.”

John Bollinger
President, Bollinger Capital Management

“Ian Woodward is an amazing guy….A couple of years back, a mutual friend arranged for Ian to drop by and show me the work he was doing, and I was very impressed. Here was a man nearly XXX years old (true age redacted!!!) with more ideas and energy than most people half his age. He has taken input from William O’Neil, Richard Arms and me and crafted an approach to investing that seeks to identify and participate in high-growth stocks. He gives three day seminars twice a year that are jam-packed with interesting ideas. I even had one of the guys who works for me attend. I think that in the fullness of time he’ll be known as one of the great analysts.”

Kudos to Ian!!!

I am trying to fit a March return trip to Palos Verdes into my schedule. The HGS Investors meeting is hosted by Ian Woodward and his partner, Ron Brown. Investors from all around the world converge on the Palos Verdes library to soak in all the words of wisdom that they can. (HGSI group members and Ian Woodward disciples fervently refer to Palos Verdes as Meca, seriously).

GWM New America Folio



GWM New America


We have changed the name of the Aggressive Discretionary folio to the GWM New America folio. We have changed not only the name, but also the management style applied.

The New America folio is only in the GWM Go-Getter Model Portfolio.

The New America folio will now focus exclusively on high growth stock opportunities. The folio will be investing in new emerging companies that are changing the landscape in America and the world. New companies such as Michael Kors, the new designer fashion sensation, and more established engines of growth, like Apple, which is quickly becoming the world's largest company.

I have prepared a New America slide show presentation that can be found under the [Clients] tab on the GWM website. This slide show illustrates the methods we use to find these potential gems.

Click either the link below or on the flag to view the very brief slide show now.


http://www.gerritzwealthmanagement.com/wp-content/uploads/2012/02/New-America-Folio1.pdf

Daily Market Snapshot 02 16 2012

Nice rebound

The market bounced back nicely today. This confirms the underlying strength of this market.

The Woody Indicator

(Volatility Indicator $VIX)

We are back in the safe zone again.

Stocks just want to go higher.

Flexible Income Folio

The income sector analysis is still looking like a Christmas Tree.
I substantially reduced our positions today. We will
just have to be defensive until this sector gets some clear direction.

Daily Market Snapshot 02 15 2012

Daily Market Snapshot

Along with other factors, a drop in Apple sparked today's market decline.

Volatility Indicator
(The Woody Indicator)

Volatility spiked up. This is an early warning,

giving us reason to be a little concerned.  

Market Direction Model

The market suffered some deterioration today.

Some columns changed from green, which is bullish, to yellow, which is neutral.

If we are going to get that much anticipated pull-back, now might be the time. After adding some positions in the morning, I quickly reversed coarse and lighten-up on risk assets after Apple began declining from its all-time high.

A decline of 3 to 5% could be in the cards. It will provide a buying opportunity in my opinion.

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.

Daily Market Snapshot 02 14 2012

Daily Market Snapshot

The pattern of morning weakness followed by strengthening
into the close continues.

The market has again been buffeted by
headline news out of Europe.

Some good news late yesterday concerning Greece however has pushed futures up, so we should have a good open  Wednesday morning.

Flexible Income Folio

We may need to reduce our market exposure in the Flexible Income Folio.
Income sectors are under pressure.

Daily Market Snapshot 02 13 2012

Daily Market Snapshot

A bit of a rebound today

Market Direction Model

Still largely green

Equity Sector Rotation

The defensive sectors are stll in the weak camp.The materials

sector is also beginning to show some signs of weakness.

The tech sector is still being led higher by Apple, now over $500.

Forget Double Dip - It's Double Recovery




Dr. Ed Yardeni is the President and Chief Investment Strategist of Yardeni Research, Inc., a provider of independent investment strategy and economics research for institutional investors.He delivers a very upbeat message about an improving economy in today's GWM Video Spotlight.

http://www.gerritzwealthmanagement.com/forget-double-dip-its-double-recovery/

Anatomy of a Trade Well Made

I combined the teachings of two geniuses a world apart to come up with the winning trades I made in TVIX and VXX last week. Both of these instruments are plays on market volatility.

If you have followed the Gerritz InSights blog for a period of time, you have heard me talk of Pascal Willain and his Effective Volume indicator. I don't believe I had previously mentioned that he resides in Waterloo, Belgium, where French is spoken. His English is far from perfect, but he is getting better all the time.

You have also heard me talk about octogenarian, Ian Woodward, master market technician, HGS Investors group mentor and creator of what is now affectionately being referred to as the Woody indicator.

Each of these gentlemen have very different investment methodologies. By combining the teachings and creations of these two extraordinary men I believe we can gain a significant edge in the market.

Ian's focus is on keeping us on the right side of the market. He is the developer of what I call our Daily Market Snapshot and our Market Direction Model. Ian's methods are derived from an enhancement of the ideas put forth by the legendary John Bollinger and his Bollinger Bands concept. I was told that Ian had lunch with John last week to show off his new Woody Indicator; they both live in Palos Verdes. Evidently John liked it very much.

Well in a nutshell, here it is. The Woody indicator gave us early clues that volatility was creeping back into the market. It signaled me to buy protection quickly.

The Woody Indicator

Analysis of TVIX

As the data point numbers change, the colors change.
The arrows are pointing  to the column that generates
our buy and sell signals.

This is what the Woody Indicator looks like in a chart format.

The thin blue line in the chart below is the Woody Indicator. It enhances and magnifies the subtitles in market movement and investor behavior. It can get us in earlier and out sooner, and it is very easy to read.

Notice how dramtically and fast the thin blue line moves. I have not found
anything as effective.

TVIX and its non-leveraged sibling VXX are powerful hedging tools in the right hands. I might add the admonishment, don't try this at home.

Paul Grems Duncan, forum leader for Effective Volume and HGSI group member as well, pointed out the advantages of adding an additional step to trade analysis before taking the leap. He uses Effective Volume Money Flow to see if there is a divergence between the buying patterns of the large players (institutional investors) and the small players (individual investors).  In this particular case there was a  huge divergence. The large player were rushing to buy VXX, while the small player remained oblivious as usual. The following EV Chart speaks for itself.

Effective Volume Money Flow

This is quite compelling. The big boys are buying while the little guys are selling.
Who do you think is going to win?

The VXX and TVIX trades made roughly 10 and 20 % respectively. These trades proved to be effective hedges to our other positions when the market was falling pretty hard at the end of the week. Not only that, but these indicators have provided us with an early warning of a potential pullback or correction coming our way.

Oh, It's TVIX Time Again

Daily Market Snapshot

More slow grind to the upside

Volatility Indicator

A change from green to yellow is an indication
that investors are beginning to get a little skittish.
No big alarm yet, they've just been a little more cautious
the last couple days.

When investors start getting nervious about the market's prospects they begin buying protective options, a form of insurance against possible market declines.This activity can be tracked via the VIX Index, the volatility index.

The earliest indication of a change of sentiment amoung investors is a rise in the VIX or TVIX in this case.

TVIX is a 2x leveraged ETF that rises dramtically when fear starts to take hold of market participants. Big spikes in the TVIX are a very good indication of trouble ahead.

It is still  too early to tell if this TVIX rise is telegraphing a pullback in the market, but it is worth paying attention to. The market has staged a nice low-volatility rise for the last few months and many have been anticipating a correction.  Is a correction iminent? Maybe.

I bought TVIX for my personal account the day before yesterday; at the same time I bought it's unleveraged sibling VXX (the VIX related ETF) in the GWM Long/Short Folio. These are very short-term positions used to hedge our model portfolios against potential market declines.

The TVIX ETF is only suitable for the Go-Getter Model because it is extremely volatile; It was up about 10% today. VXX is a bit more tame; it was up about 5% today. As I write, futures are indicating a lower open tomorrow. If these little firecrackers pop tomorrow I may take some profits - we will  see.

Golden Years Breakdown by Folio

Golden Years Target Allocation

Investor Profile

You worked hard all your life to get where you are today. You want your money to work for you now. You want to grow your money, but do not want to take undue risks. It is time to enjoy the fruits of your labor and enjoy life. You should not have to be worried about your investment portfolio. You may want to, or have to, draw from your portfolio periodically; it should be readily available at any time.

Golden Years Breakdown by Folio

Gain/Loss 3.56 YTD - Annualized 34.19%

Actual Performance calculated by Foliofn
These figures have not been audited and are provided only for educational purposes.

This his 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.