New All-Time NASDAQ High & ETF Portfolio Updates
By: Christopher Mistal
April 23, 2015
It has been a long 15 years plus, but today NASDAQ finally eclipsed its previous all-time closing high of 5048.62 set on March 10, 2000. This is a significant accomplishment for NASDAQ that will undoubtedly draw attention to today’s tech valuations. Granted, many companies do look rich today compared to standard valuation metrics, but today’s NASDAQ and the companies that comprise the index are far different than 15 years ago. Many of today’s tech companies are aggressively growing revenues and earnings which helps justify their valuation premium. 15 years ago, the valuation premium was largely based on pure speculation as many of the dot-com companies then did not have anywhere near the revenue or earnings growth that exists today.

The next hurdle for NASDAQ, which keeps going higher with every monthly inflation reading, is to clear its real all-time high. Inflation adjusting NASDAQ for the last 15 years produces a real all-time high of just under 7000. From today’s close NASDAQ needs to climb an additional 38.5% to be at a real all-time high.

[Inflation Adjusted Chart]

ETF Portfolio Updates

With the market on the verge of fresh new highs, the Almanac Investor ETF Portfolio “Open Position Average % Return” has swelled to 10.1%. Current leaders include: iShares DJ US Medical Devices (IHI) up 20.7%, SPDR Healthcare (XLV) up 18.8% and First Trust ISE-Revere Natural Gas (FCG) up 16.1% at yesterday’s close. Strength from health care related concerns is not surprising given the returns the sector has produced in recent years however FCG’s solid advance is somewhat confusing considering recent weakness by natural gas. As a result of ample supply and tempered demand, United States Natural Gas (UNG) was stopped out on April 9 for a 10.8% loss. Short-term outlook for natural gas is not all that bright so no new trade idea is being presented at this time.

Due to recent market strength, defensive trade ideas, AdvisorShares Ranger Equity Bear (HDGE), iShares 20+ Year Treasury Bond (TLT) and iShares Core US Aggregate Bond (AGG), for the upcoming “Worst Six Months” have come under pressure, but thus far have not traded under their respective buy limits. Buy limits are unchanged as we will remain patient. Should the market continue to rally they may become cheaper and if the rally falters our Seasonal MACD Sell Signal could be used to establish new long positions in these defensive trade ideas.

With the exception for HDGE, TLT and AGG, the balance of the portfolio is on Hold. The “Best Six Month” for DJIA and S&P 500 end soon and many other sector seasonalities come to an end in May. Please note Stop Losses in table below. Recent gains by several positions have resulted in higher stop losses.

[Almanac Investor ETF Portfolio – April 22, 2015 Closes]

Disclosure Note: At press time, officers of the Hirsch Organization, or accounts they control held positions in UNG, USO, XLU and XLV.