by phil - October 25th, 2014 7:34 am
It seems we weathered that storm very well!
As noted in our the last review of our virtual portfolios, BALANCE is the key to riding the market waves and we not only survived recent the 10% drop and 7% pop but we have thrived – with our Short-Term Porfolio holding onto a $94.2% gain (as of yesterday's close) and the Long-Term Portfolio back to 19.2% for the year, for a combined $790,353 off our $600,000 start – a combined 31.7% gain for the year!
I would say it's time to cash out but we've already cashed out with the Short-Term Portfolio now sitting on $179,243 in cash (92%) and the LTP has $637,800 in cash, which is 107% of the portfolio's value. That's because we've sold so much premium to others (our "Be the House" strategy) that it dwarfs the net value of our positions.
Nonetheless, we're only using 34% of our $1M margin as these are, generally, conservative long-term positions. We went into the weekend leaning very bearish in the STP, protecting our long gains in the LTP and Income Portfolios.
- CAKE – Was a disappointment as they lowered guidance on earnings on 6.3% more revenues and they lowered guidance to $2.07 from $2.25 – flat to last year. Our mistake here was looking at the costs of food products like corn, wheat, etc for basic foodmaking but it was the cost of cream cheese that killed them on the food side. Last year they topped out in the high $40s and now we are in the low $40s and I'm willing to go long on them but not appropriate for the STP – we'll look to cut this one loose next week.
- GMCR – Getting to be a white whale for us, the damned thing never goes down. Earnings are 11/19 – I certainly want to see those.
- FAS – Part of the other FAS Money Spread below (there's a limit of 4 legs to one spread). While this spread can be very stressful to manage, it's responsible for 10% of our profits this year.
- SQQQ – Our primary hedge, though taking a huge hit
by phil - October 24th, 2014 7:58 am
Already the monsters are coming out with two of NY's three papers already maxing out their headline fonts to scream EBOLA!!! to people on their way to work. As I noted to our Member in this morning's Alert (tweeted out too!) that made for easy shorts on the Futures:
Based on Ebola and the upcoming stress tests, I'd have to guess a sell-off is coming today. Shorting /ES at 1,940 (tight stops, of course) and the Dow (/YM) at 16,600 are a lot safer than shorting /TF at 1,100 but all good lines to use and watch. /NQ already failed 4,000.
It's 7:54 and already the Egg McMuffins are paid for on nice drops off those levels and we'll take quick profits and run and hopefully get a chance to re-enter as I don't see this day going well.
We're back to short in our Short-Term Porfolio but less aggressively so than last weekend as we can't ignore the underlying 3.5% gains our indexes have put up this week.
As usual, the Dollar is being knocked down to support the Futures but it's not helping oil much ($81.24) so far. Gold, however, bounced back to $1,233 and silver (/SI) went over our long line at $17.25 (very tight stops below). Gasoline (/RB) was rejected at $2.20 – another sign that the underlying economy is much weaker than these indexes would have you believe.
In fact, GS reports today that China has shut 20% of it's Iron Ore production in the face of an inventory glus and prices dropping 40% this year. The market is in the midst of a transition without precedent in recent commodity history as supply jumps and higher-cost mines shut, according to Macquarie Group Ltd. HSBC Holdings Plc, which cut its price forecasts this week, sees a 30 percent slump in Chinese output next year.
“The market currently looks like a game of chicken where no player has blinked,” HSBC said. “The major producers are likely to compete heavily on production and costs, with little regard for
by phil - October 23rd, 2014 7:56 am
We decided to give yesterday a pass.
Though the indexes failed to hold our strong bounce lines (well, 3 of 5 did), we can blame Canada for that one as a gunman shot up Parliament yesterday afternoon and the "terrorist attack" news sent our markets lower. Other than that (and these things are unavoidable when you sell 500M guns to 400M people in North America), it wasn't a bad day for the markets, so we're going to wait and see what actually sticks. Our watch levels remain:
So the Dow fell almost exactly from it's strong bounce to it's weak bounce yesterday. Aside from confirming the 5% Rule™ is firmly in charge, holding the weak bounce line is bullish – IF it holds. The S&P and Nasdaq held their strong bounce lines (thanks to AAPL) while the NYSE stayed in it's range but the Russell was a big disappointment and failed the weak bounce – a very bad sign if they can't take it back today.
by Greg - October 22nd, 2014 5:40 pm
Join us for the PSW Conference where you'll learn:
- To BE THE HOUSE – Not the Gambler!!!
- How to critically analyze today's markets and economy
- What strategies to apply to the current market conditions
- When to hold your trades and when to fix them for bigger gains
- How to use futures to leverage portfolio returns
- How to incorporate fundamental analysis for long-term wins
- The investing trends that will matter next year
- Our top stock picks for 2015
by Option Review - October 22nd, 2014 5:38 pm
by phil - October 22nd, 2014 8:07 am
What an amazing recovery!
Just one week ago the World was coming to and end and now everyone has their rally caps back on. Investors really are sheep – except I think sheep have better memories… We're still right on plan of dropping 10% and then bouncing 4% (strong bounces) by Wednesday (today) that was initiated on October 6th by our friends at the Fed (see yesterday's post for the summary). For those of you keeping score, our strong bounce predictions for today were:
The Dow is just 17 points away from our goal and we'll just need the NYSE and the Russell to confirm their bounce lines and THEN we can get bullish again. Meanwhile, we actually got a bit more bearish in our Short-Term Portfolio (also in yesterday's post) as our Long-Term Portfolio popped right back to up 18.1% for the year so we wanted to lock those gains in with the STP, which finished the day up 81.8%, down from 92% in the morning as the markets rocketed.