Market Bounce

After the Nasdaq Composite Index hit it's 200 Day Moving Average, representing a 10% decline and a valid
market correction, the market bounced nicely. While this bounce may last a couple days, it is not confirmation that the short term down-trend is over.

(Click on Chart for Easier Viewing)

Nasdaq Composite Index

Has a Nasdaq botton been put in at the 200 DMA?
We won't know until until there is evidence of a trend change.

I will probably add to our position in energy, which has been outperforming lately.

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.

The Nasdaq Composite Now Down about 8% - This is the Average for a Pull-Back

The Nasdaq composite, which is home to many of the high flying growth stocks, was down about 8% from it's recent highs this morning before bouncing back a bit.  The average market pullback is historically about 8%. If this level does not hold, we will probably see this pull back turn into an 8 to 12% correction.


GWM Model Portfolios currently are invested in a very defensive manner. Accounts have a very high cash position and the invested positions are primarily in the defensive Consumer Staples and the Utilities sector.

The market remains very volatile with 100+ point up days followed by 100+ point down days. Gil Morales, a  well known investment manager, says the market is acting like a chicken with it's head cut off, just running all over the place with no rhyme or reason. In the current environment it is very easy to get chopped up trying to pick a bottom; that would be a fool's game.

The market index averages are concealing a lot of carnage going on under the surface. Many individual growth stocks are down 20, 30 and 40%. While this is creating opportunity, the time to buy is not yet at hand.

Gold is Up and the Stock Market is Under Pressure

World headlines concerning the Russian's involvement in Crimea and negative economic news out of China are being blamed for the stock market weakness.

It is always a guessing game as to a specific reason for stocks coming under pressure. I happen think the market is still consolidating last years gains, gains that were really fueled by excess liquidity in the market as a result of  unprecedented money printing by central banks all around the world.

The primary trend remains to the upside, however, we cannot ignore the downward pressure on stocks at the moment. Consequently, I will be reducing market exposure in the GWM Major Markets 2 Folio and GWM Sector Rotation Folio 2.

I will be adding to our gold related positions in both Sector Rotation folios because gold is now breaking out to the upside.

Year to Date Returns

The Market has recovered from it's January pull-back..  The S&P 500 Index is now up 0.96% Year-to-Date.

S&P 500 (Benchmark) Y-T-D:   +0.96%

GWM Golden Year: Y-T-D:       +1.67%

GWM In Betweener Y-T-D:      +1.73%

GWM Go Getter Y-T-D:           +1.85%

S&P 500 Index

S&P 500 up 0.96% Y-T-D

The market is having a little trouble breaking through its recent highs at this juncture.  We may chop around for a while as world events unfold in the Ukraine. For the moment, my optimism has been dampened a bit because of Putin's latest military moves.


Addendum: Performance broken down by Folios

GWM Folio Performance Y-T-D

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.

All 2013 Tax Docs Have Been Delivered

All 2013 tax docs have been delivered to you and/or your tax preparers. Tax Docs were delivered via Dropbox, email or regular mail as appropriate. Forms include 1099s, 1099Rs and Form 8949. Realized Gain/Loss reports have been also sent when requested.

If you are missing any docs please call or email me.

Stephen L Gerritz, CFP

PowerShares MENA Frontier Countris Prt (PMNA) is being closed out by PowerShares

PowerShares MENA Frontier Countris Prt (PMNA) is being closed out by PowerShares. I hate to see this great investment being  discontinued. You can see by the chart below that they are closing out at their all-time high.

PMNA represents 10% of the GWM Marjor Markets folios 1 and 2. Share are being liquidated at $13.61 per share and cash will be returned to accounts in a few days. Overall account valuations posted at Folio currently list PMNA at 0 value while the shares are being tendered. Cash proceeds will be deposited back to your accounts on Tuesday the 25th. At that time your accounts will show their true and correct overall valuations.

PowerShares MENA Frontier Countris Prt 

(PMNA)

PMNA being liquidated at all time high, $13.61 per share.

Invesco PowerShares: Leading the Intelligent ETF Revolution

Invesco PowerShares is leading the Intelligent ETF Revolution through its family of more than 120 domestic and international exchange-traded funds (ETFs). PowerShares ETFs seek to outperform traditional benchmark indexes while providing advisors and investors access to an innovative array of focused investment opportunities.

Follow-Through-Day Registered on the NASDAQ Index, Indicating a Probable End of the Correction

After a 7.46% decline in the Dow Jones Industrial Average, the correction may have run it's course. When one of the major market indexes reveals evidence that large institutions are once again buying stocks in volume, odds favor a resumption of the uptrend.

Our Follow Through Day (F-T-D) indicator marks an initial rally day (the blue dot in the chart below) following a market low (the green dot). The market must hold above this rally day level going forward (the grey dots) for 4 to 10 days or more. We then look for a Follow-Through-Day, (2 magenta dots), as confirmation that the new rally may be sustainable. The F-T-D is  characterized as another big up day on greater volume than the previous day.

This is more info than you probably wanted to know. Suffice it to say, it is now safer to go back in the water. 

Next week I will be adding back positions in earnest. The most attractive investments will be those that held up best during the correction; The strongest candidates are revealed in market down-turns.

(Click on Chart for Easier Viewing)

Follow-Through-Day Indicator

Market in Confirmed Uptrend

* With corrections of 8% or less, the market normally recovers rather quickly.

* From a historical perspective, when markets correct more than 8%,  there is no telling how much further they could decline, i.e., July to October 2011. This is the precise reason that risk management is an important part of our portfolio management style.

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.