Tuesday, June 24, 2014

Market Gunning Towards Quarter End

$SPY - the market is ripping higher on what seems a never ending stream of reasons.  Economic data? Fed? Quarter end? This or that IPO? A new $NFLX original?

These rallies are great and fun when you're along for the ride. Especially in the high beta names.  

In vacation mode this week...

Saturday, June 21, 2014

$SBUX - Surging Beans

$SBUX - I've missed this stock run. It's one of the huge winners, yet it's not in my portfolio! In the "Peter Lynch buy what you know" formula, I'm even in a Starbucks at least 3-4 times a week spending money.

There are long lines.  There are people not just drinking $6 drinks, but also eating scones and snacks.

It's not just a huge winner, it's a style of life!

Starbucks hiking prices on drinks, bagged coffee


Associated Press - Associated Press - Fri Jun 20 16:30:00 UTC 2014

NEW YORK — Starbucks is raising prices on some of its drinks by 5 cents to 20 cents starting next we...

If you have Windows 8, open this in Finance. Otherwise, open in the browser.

Sent from Surface Pro

$VRX – Sell Signal

$VRX – The short term system is out of Valeant as of the close Friday. A pretty flat trade on either side of the zero line after a big move Friday – wow!  From sinner to saint in a day.  It’s a volatile stock and needs a little breathing room when trading!  The stock poked it’s head above the 200dma but closed right about there.  This is the second time in the past week where the 200dma provided resistance, but this time the stock actually got above it for a while.  The 50dma is right above and it wouldn’t surprise me if it tried to go up and touch that at some point, assuming it can get enough momentum to stay above the 200dma.

The company made it’s hostile bid offer for Allergan.  The world will have to wait to see what happens with the deal, but perhaps the headline news frenzy quiets down for a bit until a decision is made.

Even with the pullback the stock has had a huge run and IBD says it’s “consolidating since February.” 

Thursday, June 19, 2014

$VRX - Hostile Short Term Trade

$VRX - yuck.  This is a short term trade that isn't working out.  I just follow the system.  It hasn't said to sell Valeant yet but it isn't comfortable to have a loser staring at you in the face and tying up cash that could be placed elsewhere. 

The squabbling in the headlines continues over VRX and the hostile bid for Allergan. 

Again, this is a short term trade with a small position.  

The end of the quarter is coming so who wants to show VRX in their list of holdings?  Anyone? Anyone? Buehler?

EWA - G'Day Mate!

$EWA - Nice rip up off yesterday's buy signal and a gap up and over the 50dma. Since this is my short term trading system it is signaling a sell and to book the gains. 

Wednesday, June 18, 2014

Black Box Sell Signal

$SPY $QQQ - Sell signal on the black box today.  It's usually pretty close.  


Not sure if I will sell or my immediate course of action.  Historically and usually, the system generates multiple buy or sell signals clustered together over a few days.  But it has on occasion top-ticked the trend.  It also has been wrong on occasion.

Something for me to think about if I can’t sleep tonight.  LOL

EWA - Shrimp on the Barbie

$EWA - Australia looks interesting for a rental. No position yet.  Yields over 4% too.  The ETF is popping up on my list as oversold and due for a bounce. Negatives are that it gapped down yesterday below the 50dma on some volume.  A gap fill up at this point would take it back up to test the 50dma (near $26.50). EWA is also above the 200dma (which is around $25.50).

EWA is $26.13 as I type.  Australia?  Hmm...

Tuesday, June 17, 2014

VRX – Not the Best Action

$VRX – Got a bounce but close to 200dma and rejected. Long tail on the upside of that candle isn’t the best sign. Still in trade.

VRX - Phasers Set to Kill

$VRX - Getting a nice rip today on the plan to make a hostile bid for Allergan.  I hate it when a stock I own is in the headlines and analysts are having a war of words about the company. But if it creates fear and panic, the upside can be nice when all the noise quiets down. 

Yesterday on CNBC, A guru said this is a stock that you just can't own right now. And today it's up over 3% as I type.  SO er, maybe it's a stock you couldn't have owned last week, but this week ???

Hindsight is a great ally. Lol

Monday, June 16, 2014

Still Long VRX

$VRX - Still long from last week. There is a lot of overhead nonsense this stock is facing plus the overall market fear of Iraq right now. This also fell below 200dma last week and was booted from the IBD 50.  

Murphy's Law is that if I book the loss it will rally up to 200dma and maybe 50dma.   Will just follow my system which is still holding it.  The system would not initiate a new position with the stock under the 200dma. 

The sell signal on this could book a loss anyway since the sell trigger could happen on a strong bounce below the buy point from last week. 

No reason to guess. Just trade the system win or lose.  Way more winners than losers. 

Selling Utilities

$XLU $IDU - selling the utilities long from last week.  Nice gain.  Just a trade.  Could go higher with the safety play, but it was just a trade and the target was hit and the index up big this morning. 

Sunday, June 15, 2014

Update – The IBD Top 50 Stocks Strategy

Here is the latest on the IBD 50 stocks investing strategies vs. $SPY

imageThis last week was a mixed performance for the IBD 50 models.  The market struggled with the violence in Iraq and the Eric Cantor defeat (so they say).  For the week, there were 18 stocks up and 32 stocks down for the IBD 50. 

UBNT led the IBD 50 with a return of 13.8% for the week.  The biggest loser for the IBD 50 was AL down 10.6%.

The total return since 2/8/2014 is underperforming the SP500.  While none of the IBD 50 models are outperforming the SP500, the more diversified model (with 50 stocks) is performing better than the less-diversified models. 

The portfolio is sold at the closing price Friday night, and rebalanced into the make-up of the IBD top 50.  Dividends are excluded from total returns.

Trading costs $348.25.

image The IBD monthly strategy is also lagging the SP500 for the month of June. 

The total returns for all monthly models continue to trail the SP500.  Fear in the Middle East may hamper growth stocks for the time being.

FANG leads the monthly IBD 50 models with a 16.5% return.  On the downside, VRX has fallen 8.85%.

For the month of June, the IBD 50 has 28 gainers and 22 losers. 


Trading costs $69.65.

As I have been reading reviews of investing and rebalancing into model portfolios, the trading costs of rebalancing weekly or monthly is often discussed.  Going forward, I will list the “in and out” rebalancing costs for each strategy.  I will assume a $9.95 cost to sell last week’s or last month’s portfolio, and $9.95 to buy the new weekly or monthly portfolio.  (Imagine the costs of doing this with individual stocks, compared to using Motif.  Note that Motif limits the size of portfolios to 30 stocks).

The Top 25 holdings are listed at at Motif Investing.  (A check as of 3/31/2014 shows that the ability to view all holdings is limited to Motif members and IBD subscribers).

None of the above strategies are a recommendation to buy or sell stocks.  These are model portfolios constructed for entertainment only.

This is the IBD portfolio performance since 2/8/2014.  Each portfolio begins with $10,000 and then invests an equal amount in the top 5, 10, 25 and 50 IBD stocks at the closing prices on Friday for the weekly model, and at the closing prices on the last trading day of the month for the monthly model.  Since IBD changes the make up of their top stocks daily, this will only rebalance on Fridays or end of month.  It is assumed that trading costs are $9.95 to “buy” a model portfolio, and $9.95 to “sell” a model portfolio.  Thus, each weekly or monthly rebalance out of the previous portfolio and into the new portfolio costs $19.90.  Daily changes in the IBD 50 or stock rankings are not considered.  Changes in IBD’s overall market views are not considered.  Stop loss orders or other market timing strategies are not considered. 

Based on a blog entry from Paladin Money.  See Investors Business Daily for more information on the IBD 50.  See Motif Investing for their IBD Top 25 portfolio, and the ability to construct your own portfolio of stocks.

Thursday, June 12, 2014

Market Thoughts for Thursday

  • image $SPY - Iraq is the reason du jour for the latest market pullback. (This is more important than yesterday’s reason, “Eric Cantor losing.”  Really?)
  • Anyway, while the Middle East always seems to emerge from time to time as a reason for a market correction, it always seems to remedy itself soon enough.
  • More importantly, economic numbers look a little weak to me.
  • Soccer.  I’m not that interested in the World Cup, but is sure has grown in popularity.
  • When you think about the Middle East, it seems on the surface that we’re better off if they are shooting at each other rather than shooting at the US or Israel.
  • Just a reminder: the Dodgers were 4-1 to win the World Series at the beginning of the season.  Carry on.
  • When I was much younger and in school PE class, I hated that we had to play soccer instead of flag football, basketball, or softball. 
  • So, Rick Perry compared homosexuality to alcoholism.  I guess that’s a wrap for his 2016 plans.
  • I’m a little bit more invested in the market after today’s buy of $.XLU and $VRX.  The utilities rallied off the lows today for a nice gain.  I think they’re vulnerable to rising interest rates (as competition for yield seeking money).  But they may also be seen as a safer place to keep money should folks be worried about losing those recent gains in growth stocks.  VRX is another story, falling all day long before a slight bounce near the close.  It’s volatile! 

Short Term Trades

Going long $VRX and $XLU. Thought process here is that the utilities are oversold and may catch a bid if the market gets a little wobbly.  

VRX is also oversold and around the 200dma.  Come on, support levels! The stock has also been stuck in the Allergan battle. 

Tuesday, June 10, 2014

Market Thoughts and Randomosity

  • image $AAPL – So now the price point is at a place where we can trade options on it.
  • $SPY - Stock indices at or near all time highs.  Pretty amazing.  Sell in May not working (again).
  • I am about 75% long, including some stocks but I have trimmed a lot of the high beta stocks for the $SPY recently.
  • I don’t think it’s time to be very aggressive.  But hard to stay out when the bull market is trending.  The market has busted out of the trading range and is providing a nice ride up for long positions.  The signs of a market top are out there, but like we saw in other recent bubbles the last move up can keep going on and on longer than anyone expects
  • Been watching the new Making Money with Charles Payne show on Fox Business.  I like Charles. I think his stock picks are a little shaky.  More on that this weekend.
  • Speaking of, I have been keeping up with the IBD 50 and Fox Business Block stocks.  More this weekend.  But have been taking a break from blogging and audiobooing.
  • We know bull markets don’t last forever.  We also know the economic numbers seem a little weak. I guess the Fed QE is what is keeping it going. 
  • Low interest rates have been like a tax cut for folks, as payments on mortgages have dropped.  Less money spent on the house payment means more money for vacations and other stuff.
  • $NFLX - Watching The Walking Dead on Netflix, but just finished Season 3.  When will Season 4 be available?