ETF Portfolio Updates: Let the Winners Ride
By: Christopher Mistal
January 04, 2018
Over the last month since last update, the ETF Portfolio has improved nicely. The average open position gain is now 4.3% (using closes prices from January 3) compared to 0.5% at the start of December. iShares DJ Transports (IYT) is the best performing position of recent trade ideas, up 11.9%. The worst performing position is Vanguard REIT (VNQ), down 0.6%. Interest rates have moved modestly higher over the past month and this has put some pressure on VNQ. Both IYT and VNQ are on Hold.
Per last month’s update, SPDR Gold (GLD) and iShares Silver (SLV) have been closed out. The timing of these sales was not the best as both GLD and SLV have recovered, but this bounce could be short-lived as both gold and silver have been stuck in trading ranges for more than a year and typical seasonal strength normally ends around now.
Just one new sector trade idea begins in January, short Computer-Tech. The recent track record for this trade has been poor and the longer-term record is less than stellar. With major indices closing at record highs yet again, shorting Computer-Tech does not appear to be a good setup at this time.
Three sector seasonalities come to an end in January: High-Tech, Computer Tech and Pharmaceutical. However, High-Tech and Computer Tech return to favor in March and April respectively so instead of selling any tech-related positions we will continue to hold SPDR Technology (XLK) and iShares US Technology (IYW). The Pharmaceutical sector is not directly represented in the portfolio; instead it is represented by SPDR Healthcare (XLV) and iShares NASDAQ Biotech (IBB). The sector seasonalities associated with XLV and IBB last until May and March. Continue to Hold XLV and IBB.
Last month’s new trade ideas related to seasonal strength in copper, iPath Bloomberg Copper (JJC) and Global X Copper Miners (COPX), have run away. Both have essentially gone straight up since the day after they were presented last month. If you ignored the Buy Limits and bought then you likely have a respectable gain.
Although this January has gotten off to a strong start, mid-term Januarys have a spotty history. With this in mind, all positions in the portfolio are on hold.
[Almanac Investor ETF Portfolio – January 3, 2018 Closes]
Disclosure Note: At press time, officers of the Hirsch Organization, or accounts they control held positions in IWM, XLP and XLV. They did not hold any positions in the other ETFs mentioned in this Alert, but may buy or sell at any time.