Added Yelp (YELP) to the Core Equities Folio

We bought Yelp once again. It broke out after consolidating since early October of last year.

Yelp is like the new online version of the old Yellow Pages book.

(Click on Chart for Easier Viewing)


YELP

I could have bought it yesterday, but I wanted to see how the market
would react to today's employment report first.

This morning's employment report was very bad, very few new jobs created. While the Dow was down a little, the market overall was positive. When the market rises on bad news it is a good sign of market strength.

GWM Folio Performance Today.

The Core Equities folio invests in individual stocks.

Core Equities Folio

YELP (YELP) = Internet Services
Facebook (FB) = Social Media
Gilead (GILD) = Large Biotech
Valeant( VRX) = Pharmacueticals
Las Vegas Sands (LVS) = Leisure and Entertainment
Celgene = (CELG) = Large Biotech
Citi Group (C) = Money Center Banking

The Major Markets and Sector Rotation folios invest in ETFs, which are baskets of stocks targeting various markets and industry sectors.

Major Markets Folio

VGK = European Stocks
MDY= Mid-Cap Stocks
HEDJ = Currency Hedged European Stocks
RPG = S&P 500 Growth Stocks
RPV = S&P 500 Value Stocks
DIA - Dow Jones Industrial Index
DXJ = Hedged Japanese Market Stocks

Sector Rotation Folio

ITB = Home Builders
TAN = Solar Power
PBW = Alternative Energy
XLF = Financials

The Biotech and Solar stocks are working in this market. The Home Builder are making a come back. Financials also showed strength earlier in the week.

While the markets have had a poor start to new year, there are definite areas of strength within the market. While choppy, the intermediate trend remains to the upside. 

Many high growth stocks are emerging from long periods of consolidation that began in the last half of last year. For the most part, the stocks we are invested in are breaking out to the upside and holding their gains.

Funny Money

The Federal Reserve has begun to taper off their quantitative easing program. Last year they purchased $85,000,000,000 of securities every month. I, for one, will be happy when the government stops goosing the market. Last year, every time the market attempted to correct, to rid itself of excesses, the Fed kept the spigot on, flooding the market with money. Both the GWM Market Direction Model and Investor's Business Daily's Market Direction Model were rendered completely ineffective in the face of unprecedented money printing going on here and abroad. While these models have worked well for many years, I now have to ignore their signals until they become effective once again.

(Click on Chart for Easier Viewing)

Investor's Business Daily

ETF Market Direction Model

The IBD ETF Market Strategy
has demonstrated superior performance,
beating the S&P 500 by more that 2 to 1
since the year 2003.

While these market direction models delivered great results, with a fraction of the volatility experienced the last 13 years, the above chart clearly shows these same models under-performed the market in last two years. I believe this is the result of the Federal Reserve propping up the market with funny money (QE).

The market has not had a meaningful correction for two years; one is coming but I just don't know when. For now, I plan to stay fairly fully invested and ride the trend 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.