Faster moving MACD “Buy” indicators applied to DJIA, S&P 500 and NASDAQ are all positive as of today’s close. With all three indices confirming, we are issuing our Seasonal MACD Buy Signal.
Throughout the year we have maintained a bullish outlook for the full year. At the start of the “Worst Months,” we did anticipate a pickup in market volatility based upon our historical seasonal patterns, the Presidential election, ongoing geopolitical issues and some Fed uncertainty. The market did deliver on our volatility concerns with mild declines in April, the second half of July through early August, at the beginning of September, and during the first week of October. However, after each pullback the market ground its way higher.
Headwinds remain and volatility could persist in the near term with some back fill of recent gains a possibility. The Presidential election needs to be decided, and it soon will be. Conflicts persist in Europe and the Mideast. Inflation is still a concern for the Fed and future rate cuts could be fewer and further down the road than originally thought. However, seasonal factors have been reasonably well-aligned throughout the year, interest rates have been cut, economic data has proven generally resilient, and DJIA and S&P 500 are at new all-time highs. Though never a certainty, we will stick with the system and begin establishing new long positions in the ETF portfolios.
Tactical Seasonal Switching Strategy ETF Portfolio Trades
Buy SPDR DJIA (DIA), SPDR S&P 500 (SPY), Invesco QQQ (QQQ), and iShares Russell 2000 (IWM) in the Almanac Investor Tactical Seasonal Switching Strategy Portfolio. These positions will be equally weighted in the portfolio. Buy limits for DIA, SPY, QQQ and IWM are initially today’s closing price plus 1% (closing price times 1.01 = buy limit). For tracking purposes, these ETFs will be added to the portfolio using their respective average prices on Monday, October 14. This price will be calculated by summing the high and low prices and dividing by two.
Sell “Worst Months” partial positions in iShares 20+ Year Treasury Bond (TLT), iShares Core US Aggregate Bond (AGG) and Vanguard Total Bond Market (BND). All three have pulled back from recent highs and are showing modest gains as of today’s close (October 11). For tracking purposes, they will also be closed out of the portfolio on Monday, October 14 using their respective average daily prices.
Sell iShares Short Treasury Bond (SHV) and iShares 0-3 Month Treasury Bond (SGOV). For tracking purposes, they will also be closed out of the portfolio on Monday, October 14 using their respective average daily prices.
Sector Rotation ETF Portfolio
Buy new long positions in IBB, IYW, IYT, IYZ, SOXX, XLY, XLP, XLF, XLV, XLI, XLB, XLK, and VNQ. Use a new 1% Buy Limit based upon today’s closing price for these positions as detailed above. For tracking purposes, these ETFs will be added to the portfolio using their respective average prices also on October 14. Once these positions are added to the portfolio, we will update their respective stop loss and auto-sell prices.