As of today’s close, the slower moving MACD “Sell” indicator applied to NASDAQ turned negative. At this time we are issuing our official MACD Seasonal Sell signal for NASDAQ.
NASDAQ’s “Best Eight Months” have come to an end. As a result, Sell iShares Russell 2000 (IWM) and PowerShares QQQ (QQQ). For tracking purposes, these positions will be closed out of the Tactical Switching Strategy ETF Portfolio using their respective average prices tomorrow, June 12.
Also consider adding to existing positions in iShares Core US Aggregate Bond (AGG) and Vanguard Total Bond Market (BND) on dips. Suggested buy limits:
AGG – $116.75
BND - $87.25
This NASDAQ Seasonal Sell Signal is a reminder to tighten stop losses and/or take profits on technology related positions as NASDAQ’s seasonally favorable period has come to an end. Russell 2000 exhibits a similar pattern to NASDAQ and small-cap positions could also be reviewed.
Stock Portfolio Updates
Over the last four weeks through yesterday’s close, S&P 500 jumped 13.1% and Russell 2000 leapt 19.0%. During the same time period the portfolio climbed 3.0% excluding dividends and any trading fees. Overall performance was held in check by a sizable cash balance of over 50% of the portfolio. Sizable gains by JetBlue Airways (JBLU) since last update lifted the Mid-Cap portion of the portfolio to a gain of 6.5%. Large-caps were second best, advancing 5.5% while Small-caps advanced just 2.8%.
CenterState Bank (CSFL) completed its merger with South State Corp (SSB) on June 5. For each share of CSFL held 0.3001 shares of SSB were received with fractional shares being paid out in cash. For tracking purposes CSFL was closed out of the portfolio using its last trade price from June and SSB was added to the portfolio using its close on June 5.
Recent housing market data, specifically mortgage data, has provided a boost for home builders. Low interest rates, pent up demand and perhaps a desire to relocate away from coronavirus hotspots are some of the main drivers. Small cap holding KB Home (KBH) was up 55.9% since being added in early April. Today’s decline has eroded some of that gain.
In the Large-cap portfolio, Regeneron Pharm (REGN) is the top performer overall, up over 100% at yesterday’s close. It has retreated from its recent highs, but on the way higher half of the original position, established last October, was sold on May 29 when shares doubled. This is standard trading procedure for the stock portfolio and can be found in the portfolio table’s footnotes below. The remaining shares of REGN are on Hold.
Defensive, dividend paying positions in the Large-cap portfolio have recovered nicely over the last four weeks. Of the 15 positions held (shaded in grey) all but four were positive as of June 10 close. The best performing position was Brookfield Infrastructure (BIP) up 10.6%. Consolidated Edison (ED) is the poorest, down 8.2%. Major portions of ED’s service region were in lockdown longer with the first stage of easing restrictions beginning just this week. As business activity resumes, ED will likely begin to improve as well.
Another portion of the portfolio that was recovering nicely was energy. Exxon Mobil (XOM), BP plc (BP) and TOTAL (TOT) had all bounced nicely higher over the past month. Crude oil supply is still ample, and demand is still down, but as the economy reopens and recovers demand is quite likely going to accelerate. XOM, BP and TOT are on Hold.
Church & Dwight (CHD) came within $0.12 of trading at its buy limit on May 26. CHD can still be considered on dips below its buy limit.
All other positions are currently on Hold. Please see table below for updated stop losses.