ETF Portfolio Update: Use Dips & MACD Update: Still No Go
By: Christopher Mistal
October 20, 2016
As of today’s close, our Seasonal MACD Buy Signal is still on Hold. Our 8-17-9 MACD “Buy” indicator applied to DJIA is positive, but S&P 500 and NASDAQ remain negative. In order to issue our Seasonal MACD Buy Signal, DJIA, S&P 500 and NASDAQ MACD “Buy” indicators need to signal a “Buy” and all be in agreement.
[DJIA Daily Bar Chart]
[S&P 500 Daily Bar Chart]
[NASDAQ Daily Bar Chart]
While we continue to await the all-clear signal, numerous open trade ideas remain in the Almanac Investor ETF and Stock portfolios that can still be considered on dips below their respective buy limits. Election and Fed uncertainty has created volatility that is delaying the start of the “Best Months,” but we still anticipate respectable market performance in the wake of the election outcome and the Fed. It will likely be a bumpy road, but as long as fundamentals don’t take a turn for the worse and earnings continue to hold up, the path higher exists.
ETF Portfolio Updates
Per last update from earlier this month on October 4, SPDR Utilities (XLU) has been closed out of the portfolio. XLU was closed out using its average price on October 5 for a modest 4.0% return excluding dividends paid while it was held.
Recent hate hike expectations and a stronger U.S. dollar have resulted in iShares 20+ Year Treasury Bond (TLT) being stopped out on October 11 when it closed below its stop loss of $133.00. Price only return was a meager 0.2%, but with monthly dividends included it is better as they totaled around $1.50 since May. Our other bond holding, iShares Core US Aggregate Bond (AGG) is still on Hold.
Recent volatility did allow the addition of iShares NASDAQ Biotech (IBB), SPDR Consumer Staples (XLP), SPDR Healthcare (XLV) and Vanguard REIT (VNQ). As of yesterday’s close, IBB, XLP and XLV were still trading below their respective buy limits and can be considered at current levels. VNQ was 2.3% higher yesterday and can be considered on dips below its buy limit.
This month’s Seasonal Sector Trade idea, CurrencyShares British Pound (FXB) was added to the portfolio on October 11 at $120.00. The pound’s mini crash appears to have put in a bottom as the low on the eleventh has held thus far. FXB is on Hold. Significant uncertainty remains as to the effects of Brexit, but since most of the disastrous consequences have not materialized and may not there is room for a pound bounce. If the bounce fails, the tight stop loss should be heeded at $117.90.
The other “Worst Months” defensive position in HDGE is on hold. Continue to hold AGG and HDGE positions until the “Best Six/Eight Months” officially begin when we issue our Seasonal MACD Buy Signal Alert.
Numerous positions in the portfolio remain open with buy limits that are below current market levels. In some cases, well below. IYW, IYT, IYZ, SOXX, XLY, XLB and XLK can all be considered on dips below their respective buy limits. Any positions not added before our Seasonal MACD Buy Signal will be considered when we issue the Seasonal Buy.
SPDR DJIA (DIA), iShares Russell 2000 (IWM), PowerShares QQQ (QQQ) and SPDR S&P 500 (SPY) all appear in the portfolio as “Not Yet” with corresponding buy limits that are still well below current prices, but just above their respective support levels. If these positions dip below their respective buy limits, a half position is suggested. A full position would then be established when we issue our Seasonal Buy.
After cratering at the start of October, SPDR Gold (GLD) appears to have found support right around its 200-day moving average. Technical indicators applied to GLD are improving and additional purchases can be considered on dips below $120.05. Should GLD trade at this level we will officially double the position in the portfolio by adjusting its purchase price.
[Almanac Investor ETF Portfolio – October 19, 2016 Closes]
Disclosure Note: At press time, officers of the Hirsch Organization, or accounts they control held positions in AGG, HDGE and TLT. They did not hold any positions in the other ETFs mentioned in this Alert, but may buy or sell at any time.