ETF & Stock Portfolio Updates: Best Months Rally Underway
By: Christopher Mistal
November 16, 2023
Seasonality continues to work. August and September were challenging with broad declines. October appears to have been a turnaround month, again, with the market finding bottom late in the month. Our Tactical Seasonal MACD Buy signal was a bit early this year, but the subsequent market dip provided ample opportunity to pick up new positions at a bargain price. Based upon seasonal patterns and recent data, we maintain our bullish outlook for the “Best Months.”
We do recognize that numerous headwinds and concerns remain. Inflation does appear to be cooling once again based upon this week’s CPI and PPI reports, but the Fed still seems as confused as ever. One day signaling they could be done with rate hikes and then the next expressing the opposite opinion. Geopolitical risk remains elevated with two active wars. Plus, ongoing U.S. recession worries.
For these reasons we do not expect the market to march higher in a straight line. Headline risk will likely create market chop and volatility. With the market rallying during its seasonally favorable period, we will continue to buy the market’s dips.
Stock Portfolio Update
In last week’s email Issue we presented 20 new stock trade ideas. All 20 of the new stocks have been added to the portfolio as they all traded below their respective buy limits on Friday, November 10. Seventeen of the new positions were added at their buy limit price while, Frontdoor (FTDR), Grand Canyon Ed (LOPE), and Integer Holdings (ITGR) were added at their average daily price on November 10 as they opened below and stayed below their buy limit on Friday.
As of the close on November 15, InterDigital (IDCC) was the best performing new position, up 9.6%. The previous holding, Axcelis Technologies (ACLS) was a close second place with a 9.4% advance. Three positions were modestly in the red. The weakest was Virco Manufacturing (VIRC), off 2.9%.
All new positions from last weeks’ basket can still be considered on dips or at current levels. Please see the table below for individual buy limits and stop losses. As a reminder, many of the new positions are small and mid-cap stocks that can exhibit higher volatility.
[Almanac Investor Stock Portfolio table]
Sector Rotation ETF Portfolio Update
The rally from October’s lows has lifted the portfolio’s open position average gain to 3.1%. Only iShares Biotech (IBB) is in the red. Interest rate sensitive sectors have performed the best as the 10-year Treasury yield retreated from around 5% to near 4.5%. SPDR Technology (XLK) was the top performing ETF as of the close on November 15. Vanguard REIT (VNQ) is a standout, up 5.1% after languishing much of this year.
All positions in the Sector Rotation ETF portfolio can be considered on dips or at current levels. Please see the table below for individual buy limits, stop losses and suggested auto-sell prices.
[Sector Rotation ETF Portfolio table]
Tactical Seasonal Switching Strategy ETF Portfolio Update
After a sluggish start, the Tactical Seasonal Switching Strategy portfolio is up and running with an average gain of 3.4%. As has been the case for all this year, Invescos QQQ (QQQ) is leading the way higher, up 4.6% as of the close on November 15. iShares Russell 2000 (IWM) has also returned to positive with a mild 1.8% advance.
All positions in the portfolio can be considered on dips. As a reminder, per the strategy there is no official stop loss or auto-sell price for these positions. The “Best Months” has a defined holding period and we do not want to get whipsawed out of a position nor do we want to limit potential gains by selling early. However, if this approach does not fit one’s risk tolerance, then it is acceptable to implement your own stop loss and target price.
[Tactical Seasonal Switching Strategy Portfolio table]
Disclosure note: Officers of Hirsch Holdings Inc. hold positions in QQQ, IWM, DIA, and SPY in personal accounts.