The Model Portfolio opened three new positions on Tuesday and Wednesday in X, DECK and ESI. None of the existing positions were stopped out this week and all 10 open positions are profitable.
The portfolio is about $22,000 of the $152,000 portfolio in stocks and the balance is in cash.
As stated last week, now that the market has changed to a more neutral intermediate term trend from from down and we will use a pullback opportunity to a higher low to become more invested.
With the bearish harami in the indices and many stocks on Friday, this week might present the opportunity to do just that.(click on image to enlarge)
Learn the DisciplineWeek Seven Summary(click image to enlarge)
All positions closed or stopped out this week are trading at or below their exit price except AMZN which rallied after being stopped out.We have been rather conservative in our risk exposure over the past several weeks because the market broke support and was down trending. During this time that approach paid off by outperforming the negative return of the SPX as we mentioned last week. If the market forms a higher low in its current pull back from Thursday's high, that is the point we will become more aggressive in getting the Model Portfolio more fully invested.Remember, we want to think like a Master Chess Player thinking several moves in advance.
I know you are busy…in fact when I was first asked to start a blog by those who listened to me once a week but wanted to know what I was thinking every day, I delayed for a whole year, because I was busy too and I knew it would take time to put what I see and think each day into writing…and I knew it was my personal time that I would be using…I finally took the plunge a year ago and I think it has been a good experience for you and me…
I would like to make some enhancements for your benefit to the blog, both in what I share and how I share it…but before I do, I am asking for your insight as a regular reader of this blog…I know you are busy and that it is easy to think someone else will give their input, so Dave won’t need mine (apparently they are thinking the same thing you are)…actually several already have and I am very appreciative to those who have taken the time out of their busy day to give me feedback…their insights are very helpful…however, the feedback I have received is not yet a valid sample size…what that means to the non-statistical types is that if I take their insight and add it to mine, it is essentially still guessing at what most of you find useful on Chartsignals…Sooooo…I’m asking you…yes, You…
Will you please take just a moment now to email me at chartsignals@yahoo.com and tell me: What information in Chartsignals do you find useful right now?
The benefit of taking a moment is that I won’t delete something that is useful to you and I will delete information that is not that useful…and Chartsignals will become a more effective and efficiently delivered source of what I see and what I’m thinking every day…I do appreciate everyone that is willing to help me help you…Dave
DJIA - 7.01, -0.10%
SP500 - 2.66, -0.35%
NASDAQ Comp. - 27.48, -1.92%
Russell 2000 - 6.73, -1.71%Exchange NYSE NASD
Advancing 2,198 1,207
Declining 1,590 1,552Oil $47.35 +$1.10
Gold $922.00 -$8.10
SOX 212.16 -7.95
VIX 43.74 +1.38
The VIX moved up and did confirm the move down in the SPX on Monday.
Strongest Sectors: XLU +2.71%...XLB +1.57%...XLP +1.56%
Weakest Sectors: XLY -2.36%...XLF -1.95%...XLV -1.08%
Sector Watch
Up Trending:
Sideways: XLE, XLY, XLV, XLK
Down Trending: XLF, XLP, XLI, XLB, XLUStocks rose in early trading Monday only to reverse and move lower by the afternoon. The financial sector which had been the leading sector ETF early Monday fell to the next to the weakest sector by the end of the day. .
Technically, the indices had a key reversal day with stock prices opening and moving higher only to have sellers push prices down to close near their low of the day. For many stocks Monday is the high day of the recent support bounce and a break below the low of the high day on Tuesday would represent a bearish entry signal and an exit signal on short term bullish trades. Some stocks broke the low of the high day today.
The Financial Sector XLF fell -1.95%. Leading financial stocks which gained 1%+ included MET, ZION, AFL, KEY, STT, PRU and USB. Remember that all of these stocks are in intermediate term down trends.Learn the DisciplineWe closed positions in FAS at 5.11, UYG at 2.33 and stopped out on AMZN at 66.74. All three trades were profitable.
Index Commentary
The DJIA formed a tombstone doji right at its 50% Fib retracement (Feb 9) and at its 30 DMA. This is also the high day. Watch for a potential break of the low of the high day.
The SPX formed a shooting star ath the 30 DMA and the 50% Fib Retracements (Feb 9). Today is the high day in the counter trend. Watch for a potential break of the low of the high day on Tuesday.
The Nasdaq formed a bearish engulfing which confirmed Friday’s hanging man at its 50% Fib retracement (Feb 9) and its 30 DMA. Today is also the high day in this counter trend move. A bearish engulfing requires no confirmation.
The RUT formed a bearish engulfing that confirmed Friday’s hanging man at its 38.2% Fib retracement (Feb 8) and just above its 20 DMA. This is also the high day. A bearish engulfing requires no confirmation.At the Open on Tuesday
Counter Trend Up in a Down Trend
SPY – bearish harami at 30 DMA in bear flag
BA – shooting star above 20 DMA in bear flag
WHR – black spinning top at 30 DMA in bear flag
BDK – shooting star at 30 DMA in bear flag
DE – shooting star at 30 DMA in bear flag
WYNN – bearish engulfing at 20 DMA in bear flag
ADS – shooting star/bearish harami at 30 DMA in bear flag
DECK – bearish engulfing at 20 DMA in bear flag
VNO – evening star at 30 DMA in bear flag
SPG – evening star at 30 DMA in bear flag
FWLT – shooting star confirms shooting star at 30 DMA in bear flag
Stocks to Watch on Tuesday
Leading Stocks:
Holding Above 30 DMA
BIDU, CLB, BKC, NFLX, DLTR, HANS, ICE, ALGT, MOS, DLB, JEC, PWR, VPRT, AMZN, MON, AAPL, CTSH, FLS, JOYG, AMX, APEI, AXYS, BAP, CAM, GMCR, GPRO, JCOM, JOSB, MUR, PCLN, PETS, WMT
Moving Above 30 DMA = 2
ATW, GR
Moving Below 30 DMA = 4
FSLR, MYGN, SYNA, SNHY
Staying Below 30 DMA
EBAY, GME, SLGN, WRC, CPLA, ESRX, GES, PSYS, CHL, DECK, GILD, MHS, TDG, SPWRA, AMED, BIIB, GXDX, PCP, RBN, DV, ESI, VAR, WCG, BLUD, JW.A, MUR, ORCL, RCI, SWN, HLF, STRA, PCR, RIMM, BDX, BYI, PPD, ACN, NIHD, K, NTLS, HDB, CBST, SNA, AFAM, MCD, EZPW, WAB, FAS, UYG
Monday’s Action (=> +$0.70 or -$0.70)
Moving Up: MON, PCLN, CNX, AGU
Moving Down: STRA, BIDU, FSLR, GS, MA, SOHU, MS, SINA, PNRA, AEM, ANR, NDAQ, AFAM, NEM, HANS, ONXX, BRCM, POT, MOS
Intermediate Term Market Trend: Neutral – Nasdaq; Down – DJIA, SPX, RUT
Short Term Market Trend: Up
Week Six Summary:Approximately $30,000 of the $152,000 model portfolio is currently invested. After six weeks the portfolio is down approximately 1% compared with the SPX which is down over 8% in the same time period. As we stated six weeks ago, the model portfolio is essentially a stock only portfolio at this time and intended to be primarily an intermediate term strategy. There is a difference between making individual trades and managing a portfolio and our objective is to reinforce some portfolio concepts that will make large differences over time. As we get a valid sample size of trades we will become more explicit in our explanations. So stay tuned and you will become plesantly surprised over the next few months as the portfolio unfolds.
