ETF Portfolio Updates & A Change of Pace
By: Christopher Mistal & Jeffrey A. Hirsch
July 06, 2017
First of all we want to thank you all for entrusting us with your time and money, and for your loyal support. We hope our service has been helpful and profitable for you. We know change can be tough on folks, but we believe the changes we are making to our Almanac Investor digital newsletter service are for the better and will prove to be wise moves in the future.
Since we launched Almanac Investor newsletter in July 2001, the market, the world and our service has been through a great deal. We have continued to improve and hone our market timing, sector rotation and stock selection processes and systems into a well-oiled highly, effective-machine. Our results speak for themselves.
The world changed rather dramatically shortly after we launched in July 2001. Less than three months later we suffered the attack of 9/11. Then, six and half years later in March 2008, the bottom fell out triggering the Great Recession and the worst bear market since The Depression. Along the way we made some pretty solid calls and provided reliable guidance. 
Here’s a few of the big market calls:
October 16, 2002 Almanac Investor headline “BUY! BUY! BUY!”
2008 Almanac Investor headlines: January 16 “Long-Hibernating Bear Awakes in Bull’s Season, Steepest Correction Since 2003, Looming Recession, Negative Early Readings Portend More Carnage;” February 13 “Negative January Barometer Points to Further Declines, Don’t Get Snared By the Bear Market Rally;” December 12 “Bottom May Be In and a New Bull Market Underway…”
Next Super Boom – Dow 38820 By 2025 forecast, first revealed at Dow 10,783 May 13, 2010 in Almanac Investor.
Over the past 50 years of Stock Trader’s Almanac and several previous newsletters and the past sixteen years of Almanac Investor we have made a plethora of changes to our newsletter services. The time has come to make some adjustments to your subscription service. You will still receive all of the same timely and trenchant market analysis and trade ideas, and more. 
In this age of information overload we are refocusing on quality versus quantity. These days our inboxes are inundated with junk and spam and a constant barrage of requests, offers, updates and unnecessary information we are required to sift through. This is why we have decided to bombard you with less email.
Instead of two brief alerts per week, we will be sending you one thorough weekly update and a comprehensive monthly newsletter that covers everything for the month ahead in the Almanac, on our seasonal sector rotation calendar, our best months switching strategy, our market outlook and a review of all the holdings in our stock and ETF portfolios as well as any new recommendations.
Weekly updates will focus on what is on the market’s docket in the week ahead, stock and ETF updates, more Proving Grounds and new stock and sector investing and trading opportunities. We will continue to send interim Alerts on our Best Months Seasonal MACD Buy and Sell Signals as well as any pressing portfolio trades and adjustments that come up.
This effort will allow us to provide you with more videos, webinars and interactive online subscriber events. From now on you will receive one, regularly scheduled email Alert every Thursday except on the last Thursday of every month when we will publish and email you our new more comprehensive newsletter.
We apologize if this change causes any of you any inconvenience so please send us your feedback and let us know what else you’d like to see us do differently.
New Trade Ideas for August Seasonalities
Biotechnology sector enters its historical favorable season in August. iShares NASDAQ Biotech (IBB) could be bought on dips below $277.00. The stop loss is $249.30 and auto sell is $349.49. A 14.7% average gain has occurred over the last 15 years while an average gain of 22.2% has taken place the most recent 5 years. Biotech had been hot in recent years and even though valuations are still arguably elevated, this is where growth can still be found. It is also quite likely that this sector will play a significant part in the next secular bull market. Unlike other areas of the market, IBB spent the majority of the year plodding along until a mid-June pop.
[iShares NASDAQ Biotech (IBB) Daily Bar Chart]
Over the last 15 years, High-Tech has generated an average return of 11.9%, and for the last five years the average has been 9.1% during its bullish season from mid-August to mid-January. Our top ETF within this sector is iShares DJ US Tech (IYW). A buy limit of $124.50 and stop loss of $112.05 are appropriate. If high-tech produces above average gains, profits will be taken at the auto sell of $153.25. IYW had been soaring ever higher since breaking out late last year until mid-June. It has since broken down below its 50-day moving average and appears to be making a beeline towards its much lower 200-day moving average just below $129.
[iShares DJ US Tech (IYW) Daily Bar Chart]
Buy limits for IBB and IYW are well-below current prices. We want to be patient and not rush into new long-positions. Seasonal strength for these two sectors generally does not start until August and both appear poised for further losses in the short term. It will most likely not be a straight line lower, but rather a choppy trend down.
ETF Portfolio Updates
Per our Seasonal MACD Sell Signal Alert for NASDAQ emailed after the close on June 9, remaining technology and small-cap related positions were closed out using their respective prices on June 12. IYW, IWM and QQQ were all sold for gains of better than 16% (excluding any dividends or fees). XLK was closed out for a 15.3% gain, the smallest of the group. CurrencyShares British Pound (FXB) was also closed out on June 12 after it closed below its stop of $124.50 on June 9 for a 4.0% gain over three months.
Defensive positions in iShares 20+ Year Bond (TLT), iShares Core US Aggregate Bond (AGG), iShares Silver (SLV) and SPDR Gold (GLD) were also expanded in the time since issuing our NASDAQ Sell Signal as all four traded below their respective buy limits. SLV’s “Presented” Price has been adjusted to reflect the additional purchases. TLT, AGG, SLV and GLD can all still be considered on dips or at current levels (see table below for updated buy limits).
iPath Bloomberg Livestock (COW) and PowerShares DB Agriculture (DBA) have also been added to the portfolio. DBA is slightly higher while COW is slightly lower. Both are on hold.
NASDAQ’s Midyear Rally is off to a bumpy start. In that Alert there were two possible entry points presented, the first was on dips below $135.95 and the second was on a buy signal from MACD (8,17,9). A MACD buy signal occurred on Friday June 23 and PowerShares QQQ (QQQ) was added to the ETF Portfolio on Monday June 26 using its average price of $141.32. Appling the suggested 2% trailing stop loss to this entry price resulted in the position in QQQ being stopped out on June 27 when QQQ closed below $138.49. Because the MACD buy criteria were satisfied, the portfolio will officially recognize the 2% loss.
If you did not use the MACD Buy Indicator as the entry point and instead choose the price of $135.95 (QQQ traded below today) or entered near the close on June 27 then a stop loss of $134.76 is suggested. QQQ is rather oversold now and it could easily turn around and rally into mid-month.
[Almanac Investor ETF Portfolio – July 5, 2017 Closes]
Disclosure Note: At press time, officers of the Hirsch Organization, or accounts they control held  positions in AGG, COW, DBA, GLD, SLV, TLT, XLP and XLV.