11/30/2017: Dow 24272.35 | S&P 2647.58 | NASDAQ 6873.97 | Russell 2K 1544.14 | NYSE 12627.80 | Value Line Arith 6039.98

 

Psychological: Frothy. The holiday season is officially underway. Sentiment readings have been quite bullish and are likely to remain so as the market continues to rally. Expectations for tax reform and the possibilities of less regulation are also giving investors and traders reason to be cheerful.

 

Fundamental: Accelerating. Revised Q3 U.S. GDP climbed from 3.2% to 3.3% which is the best reading in three years. Employment also remains on reasonably firm trajectory with the unemployment rate dropping to 4.1%. Inflation metrics are also heading in the correct direction although they could accelerate if wage growth picks up. Corporate earnings have largely been satisfying which is driving expectations higher. If earnings remain robust, then concerns over valuations could ease.

 

Technical: Breaking out. Stochastic, relative strength and MACD indicators applied to S&P 500, NASDAQ and Russell 2000 have fully rebounded after rolling over in November. Russell 2000 weakness began in early October. Advance/decline lines are all headed higher along with the major indexes. Across-the-board strength suggests the rally has regained momentum that could easily propel stocks higher through yearend and beyond.

 

Monetary: 1.00-1.25%. A new Fed Chair, Jerome H. Powell has been selected. He has some experience as he has been a member of the Fed’s board of governors since 2012, but perhaps not as much as others. He is generally expected to maintain the dovish pace of interest rate increases while also being to open less financial regulation. What more could the industry ask for? Speaking of rates, CME Group’s FedWatch Tool is currently indicating a 90.2% probability of a 0.25% rate hike at the next Fed meeting scheduled for December 12 and 13. A new range of 1.25% to 1.50% for Fed funds is still quite accommodative.

 

Seasonal: Bullish. December is the number one S&P 500 (+1.6%) month and second best for DJIA (+1.7%) since 1950. It’s also the top Russell 2000 (1979) month and second best for NASDAQ (1971) and Russell 1000 (1979). Rarely does the market fall precipitously in December. The “January Effect” of small-cap outperformance starts in mid-December. Wall Street’s only “Free Lunch” of distressed small- and micro-cap stocks making new 52-week lows on December Triple-Witching Friday will be served before the opening bell on December 18. Santa’s Rally begins on Friday December 22 and lasts until the second trading day of the New Year. S&P has averaged gains of 1.4% since 1969. In years when Santa Claus did not come to Wall Street, bear markets or sizable corrections have often materialized in the coming year.

 

As has been the case in years gone by, especially recent years, when other market forces override seasonality folks get a little impatient with the seasonal patterns and our system. Our Seasonal Switching Strategy underperformed during the Worst Months this year. But we are pleased to inform you that this is not unusual and that despite the imperfect history of the system and seasonal market patterns, they have outperformed over the long haul.

 

In recent years since the 2009 generational low, the DJIA Best Six Months + MACD Timing have outpaced the Worst Six Months in each last seven years. Compared to full-year performance the BSM+MACD have beaten full years three times in the last seven years (2011, 2012 and 2015), lagged by a fraction twice (2014 and 2016), off by a few percentage points in 2010 and way off the mark in 2013. View the complete history and other index data on our website at https://www.stocktradersalmanac.com/Strategy.aspx.

 

Like any other strategy, our Seasonal Switching Strategy will experience periods of underperformance and periods of outperformance. During periods of underperformance we must resist emotion and remain focused on the long-term objectives of the strategy which are to capture the majority of the market’s gains while avoiding much of the market’s losses by being “out of the market” during the “Worst Months.” The long-term track record of the strategy remains intact and that is what we remain focused on, the long-term.

 

So we believe it is prudent to stick to the strategy. If we had overridden it and the market collapsed or corrected substantially, we would have been displeased with ourselves and surely would have received an earful from all of you, our loyal subscribers, as well the media and financial market pundits. Who would have thought the plethora of increasingly more capable and lethal missile launches from North Korea would have so little impact on the stock market. 

 

It’s all about the long-term results and efficacy of seasonality and historically recurring market patterns for frequency and magnitude. Besides we have never been a proponent blindly selling in May and going away. Sure, we sell some positions when we get our Seasonal BSM MACD Sell Signal, especially underperforming stocks, but we faithfully hang on to our winners, which is the key to long term investment success along with sticking to our proven effective Seasonal Switching Strategy. Have a look at some of the outstanding stock picks in our portfolio, like Arista Networks (ANET), up another $10 for a 187% gain since we presented it last October. (Full Disclosure: We own shares in ANET.) 

 

 

Furthermore, this late MACD Buy Signal we issued two days ago is not a bad sign. In the table below we lined up all the BSM+MACD Buy Signals that came after November 1. DJIA was up in all 15 subsequent BSM with zero losses, for an average of 9.2% right in line with the average of 9.3% for all BSM+MACD since 1950. So history is still on our side.

 

 

Speaking of history, we are month away from the beginning of the midterm election year, which has been notoriously fraught with market declines, recessions, bear markets and political battles. The rally looks intact for now, but if this tax cut becomes law and goes into effect during the often volatile and treacherous midterm year in 2018 it could be one of the straws that break this bull market’s back. 

 

From all the bipartisan analysis we’ve seen this tax cut plan does not seem built to help the middle class and small business. Obamacare has been a drain on the middle class and small business. Health insurance rates keep going up and are set to increase by another wide margin in 2018 for most working Americans who get their health insurance from the Exchanges. The poor, the rich, and folks who work in larger unions and corporations have not been hurt so much by Obamacare, but much of the country has.

 

And now, the tax cut legislation appears poised to benefit big business over hardworking Americans and small business, the backbone of this country. Comments this week from Vanguard Founder John Bogle highlight the potential deficiencies of this tax proposal and how it could be a disadvantage to the bulk of the tax-paying class.

 

As reported by Bloomberg News, at an event Tuesday sponsored by the Council on Foreign Relations in New York Vanguard Group founder John Bogle said that “the tax proposals in Washington are a ‘moral abomination’ because they favor corporations at the expense of workers.”

 

Bogle went on to say, “Just think about this: Corporate profits after taxes last year were the highest they’ve ever been in the history of GDP going back to 1929 and we are thinking of giving relief to the corporations at the highest levels ever. Individual wages are at the lowest level in about 15 years as a percent of GDP…. So we are helping people who are doing very well and doing nothing for the people doing very badly. One of the flaws is that corporations are putting their shareholders ahead of the people that built the corporation…. worst part of it is that corporations are making so much money now that they don’t know what to do with it. They aren’t investing in new equipment, in innovation. They’re buying back their own stock.” Stock buybacks have been a huge driver of the bull market.

 

While it remains to be seen, this possible new tax legislation – and any other new, disruptive laws – have the potential to knock the stock market off its high horse. Uncertainty and new laws can create fundamental changes to the Wall Street playbook and rock the market. Mr. Bogle makes a valid point. 

 

In the chart below from The Federal Reserve Bank of St. Louis’ most excellent FRED Database we try to illustrate Mr. Bogle’s argument. We have plotted out two lines, one showing Corporate Profits as a percent of GDP and one showing Employee Wages as a percent of GDP (adjusted to be on the same scale as the Corporate Profits ratio). Our numbers are not quite at the extreme levels Mr. Bogle mentions, but they are rather close and on trend with Bogle’s comments. After tax profits are way up and wages are way down. Let’s hope Washington gets tax cuts right along with the numerous other agenda, policy and legislative initiatives we could use.

 

 

Ever increasing expectations that tax reform is going to occur has propelled DJIA up to and through 24000 (1). Prior to the jump higher this week, DJIA spent two weeks treading water in mid-November. This sideways to modestly lower trading was enough to send both the slower and faster moving MACD indicators lower. On Tuesday, November 28, DJIA leapt higher turning its MACD Buy indicator positive (2) which finally satisfied the criteria to issue our Seasonal MACD Buy Signal.

 

 

DJIA (3) and S&P 500 (4) weekly winning streaks came to an end on November 10 after eight straight weeks of gains. Winning streaks always end, but due to the obvious bullish nature of this streak, losses were mild and quickly recovered as the holiday spirit kicked in ahead of Thanksgiving.

 

NASDAQ’s weekly winning streak may not have lasted as long, ending at six, but it only declined 0.2% in a single week before returning to its winning ways (5). As of today’s close NASDAQ is up 27.7% year-to-date which is a sizable lead over DJIA and S&P 500.

 

Tepid NYSE Weekly Advancers and Decliners data has finally given way to a healthy, better than two-to-one advantage to Advancers (6). Although the major indexes never suffered a meaningful pullback in October or early November, they very easily could have if some of the larger market cap constituents would have declined. Weekly Decliners outnumbered Weekly Advancers for two weeks straight at the end of October and the beginning of November while DJIA, S&P 500 and NASDAQ still posted gains. It would seem the mega-cap stocks kept their respective indexes afloat at that time while many other individual stocks were in retreat.

 

After four weeks of trending in a negative direction, New Highs and New Lows (7) appear to have reversed the trend. Expanding numbers of New Highs and shrinking numbers of New Lows is positive. This trend will likely be supported further by this week’s trading.

 

Tame inflation data, somewhat tepid long-term growth expectations and a Fed that is slowly raising short-term rates has caused the spread between the 90-Day Treasury rate and the 30-Year Treasury rate (8) to narrow even further in recent weeks. At some point this trend could cause trouble for lenders, but it could also reverse direction quickly if inflation and/or growth expectations accelerated. 

 

 

 

Market trading in December is holiday inspired and fueled by a buying bias throughout the month. However, the first part of the month tends to be weaker as tax-loss selling and yearend portfolio restructuring begins. Regardless, December is laden with market seasonality and important events. 

 

Small caps tend to start to outperform larger caps near the middle of month (early January Effect) and our “Free Lunch” strategy is served from the offerings of stocks making new 52-week lows on Triple-Witching Friday. An Almanac Investor Alert will be sent prior to the open on December 18 containing “Free Lunch” stock selections. The “Santa Claus Rally” begins on Friday December 22 and lasts until the second trading day of 2018. Average S&P 500 gains over this seven trading-day range since 1969 are solid 1.3%. 

 

This is the first indicator for the market in the New Year. Years when the Santa Claus Rally (SCR) has failed to materialize are often flat or down. Of the last six times SCR (the last five trading days of the year and the first two trading days of the New Year) has not occurred were followed by three flat years (1994, 2004 and 2015), two nasty bear markets (2000 and 2008) and a mild bear that ended in February 2016. As Yale Hirsch’s now famous line states, “If Santa Claus should fail to call, bears may come to Broad and Wall.”

 

In the last sixteen post-election years, December’s ranking slip to #8 S&P 500, #7 NASDAQ and DJIA #5. Small caps, measured by the Russell 2000, have had a field day in post-election-year Decembers. Since 1980, the Russell 2000 has lost ground just twice in nine post-election years in December. The average small cap gain in all nine years is a solid 2.5%.

 

 

December Triple Witching Week is more favorable to the S&P 500 with Monday up eleven of the last seventeen years while Triple Witching Friday is up twenty-four of the last thirty-five years with an average 0.3% gain. The entire week has logged gains twenty-five times in the last thirty-three years. The week after December Triple Witching is the best of all weeks after Triple Witching for DJIA and is the only one with a clearly bullish bias, advancing in twenty-five of the last thirty-four years. Small caps shine especially bright the week after Triple Witching with a string of five bullish days in a row.

 

Trading the day before and the day after Christmas is generally bullish across the board with the greatest gains coming from the day before. On the last trading day of the year, NASDAQ has been down in fifteen of the last seventeen years after having been up twenty-nine years in a row from 1971 to 1999. DJIA, S&P 500, and Russell 1000 have also been struggling recently and exhibit a clearly bearish bias over the last twenty-one years. Russell 2000 record very closely resembles the NASDAQ, gains every year from 1979 to 1999 and just four advances since.

 

Our Seasonal MACD Buy Signal came later than usual this year, but it did arrive in time to capture DJIA best daily point gain of 2017, up 331.67 points (1.4%) today. S&P 500 and NASDAQ also enjoyed solid gains today after yesterday’s weakness, up 0.8% and 0.7% respectively. Although the major indexes did wander modestly higher throughout October and the majority of November, they did so without the Russell 2000 and frequently in defiance of their respective advance/decline lines.

 

 

Indicated in the above chart, the improvement in the four advance/decline lines is accompanied by strength across DJIA, S&P 500, NASDAQ and Russell 2000. This across the board confirmation is encouraging and suggests the market’s rally has regained momentum. Geopolitical and headline risks remain, but the prospects of tax reform are improving while fundamentals and technicals remain firm. Further gains through yearend and into the first quarter of 2018 are expected.

 

 

In accordance with Tuesday’s Seasonal MACD Buy Signal Alert, new positions in DIA, IWM, QQ and SPY have been established in the ETF Portfolio using each ETF’s average price from November 29. Positions in SOXX, XLY, XLF, XLB, XLK and IYW were also established using the average daily price method. Buy limits, stop losses and auto-sell (or price target) have been adjusted based upon each positions purchased price. All of these positions can still be considered at current levels or on dips below their respective stop losses.

 

As a reminder, “Current Advice” is based upon closing prices from November 29. The Buy Limit price is good 'til cancelled and supersedes the text in “Current Advice.” For example, a position may say “Buy Current” in the table, but is actually above its Buy Limit today. In this scenario do not purchase a position until it trades at the buy limit price or lower. More simply, we do not advise paying more than the Buy Limit price at any time.

 

Other positions in XLP, XLV, VNQ and IBB can also be considered when they trade at or under their respective Buy Limits. 

 

iShares Silver (SLV), SPDR Gold (GLD) and iShares DJ Transports (IYT) are on Hold.

 

 

 

Faster moving MACD “Buy” indicators applied to DJIA, S&P 500 and NASDAQ are finally all positive as of today’s close. The criteria to issue our Seasonal MACD Buy Signal have been satisfied. With all three indices confirming, we are now issuing our Seasonal MACD Buy Signal.

 

 

Buy SPDR DJIA (DIA), SPDR S&P 500 (SPY), PowerShares QQQ (QQQ), and iShares Russell 2000 (IWM). For tracking purposes, these ETFs will be added to the portfolio using their respective average prices on November 29. This price will be calculated by summing the open and close prices and dividing by two. Buy limits for DIA, SPY, QQQ and IWM are initially today’s closing price plus 1%. For example if today’s closing price was $100, then the buy limit would be $101 (close * 1.01 = buy limit).

 

Continue to hold positions in iShares Silver (SLV) and SPDR Gold (GLD). Seasonal strength in gold and silver has historically persisted till yearend and into the New Year.

 

The short position in SPDR Energy (XLE) was stopped out on November 6 when XLE closed above $69.40.

 

iShares DJ Transports (IYT) was added to the ETF Portfolio on November 7 at $174.56 and can still be considered.

 

Remaining open positions in the ETF Portfolio can also be considered at this time. Buy SOXX, XLY, XLF, XLB and XLK with a buy limit of today’s closing price plus 1%. For tracking purposes, these ETFs will be added to the portfolio using their respective average prices on November 29. This price will be calculated by summing the open and close prices and dividing by two. 

 

The Almanac Investor Stock and ETF Portfolios will be updated in the next regularly scheduled Alert on Thursday, November 30.

 

 

Our Seasonal Switching Strategy has been underperforming since the start of the “Worst Months” this year. Like any other strategy, our Seasonal Switching Strategy will experience periods of underperformance and periods of outperformance. During periods of underperformance we must resist emotion and remain focused on the long-term objectives of the strategy which are to capture the majority of the market’s gains while avoiding some of the market’s losses by being “out of the market” during the “Worst Months.” The long-term track record of the strategy remains intact and that is what we remain focused on, the long-term.

 

As of today’s close, our Seasonal MACD Buy Signal is still on Hold. Our 8-17-9 MACD “Buy” indicator applied to DJIA, S&P 500 and NASDAQ are all negative (see blue arrows in charts below). The criteria to issue our Seasonal MACD Buy Signal is a new buy signal using our 8-17-9 MACD indicator on or after the first trading day of October and DJIA, S&P 500 and NASDAQ must be in agreement.

 

This criterion still has not been met yet. Even after today’s gains, a one-day DJIA advance of 464.35 points (1.98%) is still needed to turn DJIA’s MACD positive and S&P 500 needs to advance 27.27 points (1.05%) for its MACD indicator to turn positive. NASDAQ needs to gain 51.94 points (0.76%). 

 

 

 

Over the four weeks since last update, S&P 500 climbed 0.1% higher while Russell 2000 slipped 2.7% as of yesterday’s close. The Almanac Investor Stock Portfolio’s blend of cash, long and short positions climbed a respectable 1.9% over the same time period excluding dividends and any trading costs. Our Large-Cap portfolio performed best, up 4.7% followed by Mid-Caps up 3.1%. Small-Caps were 0.8% higher.

 

Per last month’s update, short positions in PDF Solutions (PDFS), Mattel (MAT) and Mosaic (MOS) were covered using their respective average prices on October 20. PDFS was covered for a 13.1% gain; MAT recorded an 18.5% gain and MOS 11.0%. All three traded lower after being covered, but they are all higher now.

 

Mid-cap short positions in Foundation Med (FMI) and Mellanox Tech (MLNX) did not work out as well. FMI third quarter earnings (actually losses) were the catalyst for a single-day jump of $8 which blew well-past its stop loss of $45.01. The position was covered the following day at $51.15 and a sizable loss. MLNX was also stopped out at a modest loss of 5.2%.

 

In the large-cap portfolio, the short position in Sealed Air (SEE) was also stopped out and covered. That leaves Tesla (TSLA) as the sole remaining short position. TSLA’s third quarter missed estimates and shares once again tanked, but appear to have found firm support right around the $300 level. Cover the TSLA short position. For tracking purposes it will be closed out of the portfolio using its average price tomorrow.

 

Switching to last month’s long Stock Basket, a few more positions have been added to the portfolio. Argan (AGX) was added on November 15 and is on Hold. CBRE Group (CBG) was added on November 2 and Owens Corning (OC) was added on October 25. CBG and OC are also on Hold. Customers Bancorp (CUBI) and ePlus (PLUS) were also added to the mid-cap portfolio, but were both quickly stopped out. Both were stopped out to due earnings disappointments. PLUS opened just below its buy limit on November 3 and closed below its stop loss on the same day.

 

Remaining open, new long ideas can still be considered on dips (“Buy Dips” appears in the Current Advice column of the portfolio table). Buy limits and stop losses for these positions have been changed. New buy limits appear in the “Buy Limit” column. Each stocks original “Presentation Date & Price” remained unchanged.

 

All other positions in the Stock Portfolio are on hold. Please see following table for current advice and updated stop losses.

 

 

 

As of today’s close, our Seasonal MACD Buy Signal is still on Hold. Our 8-17-9 MACD “Buy” indicator applied to DJIA and S&P 500 is still negative (blue arrows in charts below). NASDAQ’s MACD “Buy” indicator is positive, just barely. S&P 500 was briefly positive, but today’s losses have turned its MACD “Buy” indicator negative.

 

The criteria to issue our Seasonal MACD Buy Signal is a new buy signal using our 8-17-9 MACD indicator on or after the first trading day of October and DJIA, S&P 500 and NASDAQ must be in agreement.

 

This criterion has not been met yet. A one-day DJIA advance of 420.24 points (1.83%) would turn DJIA’s MACD positive and S&P 500 needs to advance 16.28 points (0.63%) for its MACD indicator to turn positive. NASDAQ also needs to gain 16.01 points (0.24%) tomorrow or its MACD indicator will also turn negative.

 

 

Over the years there have been 15 Seasonal Buy Signals that were issued in November or later since 1950. This is approximately once every five years that the signal was issued in November. The latest November trigger was November 29, 1971 (only December 11, 1973 was later) while the most recent November signal occurred in 2012. With this in mind this year’s “late” signal is not all that unusual. All things considered, this year’s pending signal could still prove timely. 

 

Major tax overhaul is still a work in process and the final bill is still unknown. In addition to this, Congress has yet to deal with the looming budget deadline which is rapidly approaching. Geopolitical events continue to heat up as well. North Korea has been relatively quiet, but the fall of ISIS in the Middle East is only opening new doors that lead to future uncertainty in the region. Any one of these issues could be the catalyst for a brief and rather overdue market pullback.

 

Today’s market selloff had the makings of the biggest decline since August, but it did not amount to much in the end. Eventually this spinning wheel will come down, but as we have been saying, it will likely take a major shock to the system, whether internally or externally, to knock this market off its high horse.

 

Disappointment from the GOP’s watered-down tax reform bill sent stocks reeling early in the day, but once traders realized that the tax plan amounted to next to nothing, cooler heads prevailed and folks realized that not much of anything is likely to get passed by the current Congress, which means nothing changes and Wall Street can stick to its existing playbook, pushing stocks higher until something breaks – maybe it’ll be speculation in Bitcoin Futures that will finally break this rally’s back.

 

So for now, we are going to drop all our troubles by the Hudson riverside, ride the seasonal patterns and let the rallying market ride once we get our Best Six Months Seasonal MACD Buy Signal. For now the Best Six Months Seasonal MACD Buy Signal is still on hold and on days like today that has provided some solace.

 

Our current strategy of holding our big winners though the Worst Six Months, while maintaining a sizable cash position as well as some defensive holdings, has proved prudent. A few of our new stock and ETF picks have been added to the portfolio, but many remain above their respective buy limits or await our Seasonal MACD Buy Trigger. 

 

Bullish market sentiment and the spread between bulls and bears remains at early 1987 levels, which suggests this market still has further to run, though it does create an ominous portent for next year in conjunction with treacherous midterm election year patterns, rising valuations, the prospects for tighter monetary policy and mounting geopolitical concerns as President Trump gallivants through the Fareast while North Korea, Russia, Iran and ISIS et al appear to lie dormant for the time being.

 

Fundamental readings out of corporate America and the U.S. economy continue improving at a modest, yet precarious pace that could easily be rocked by a systemic, economic or geopolitical setback. Technical indications are weakening, but appear to finally be setting up for our Best Six Months Seasonal MACD Buy signal. Patience is in order. 

 

So with the Best Three Consecutive Months upon us on the heels of a great Worst Six Months, history is on our side. Look for stocks to drift higher with minor setbacks in early December and mid-January until the midterm election campaigning season turns ugly in the spring of next year. As the new Fed Chair takes over the reins early in 2018, political, fundamental and technical factors will likely weigh heavier on the markets. But for now, let the spinning wheel spin.

 

As of today’s close, our Seasonal MACD Buy Signal is still on Hold. Our 8-17-9 MACD “Buy” indicator applied to DJIA and S&P 500 is still negative (blue arrows in charts below). NASDAQ’s MACD “Buy” indicator turned positive on Monday, October 30.

 

The criteria to issue our Seasonal MACD Buy Signal is a new buy signal using our 8-17-9 MACD indicator on or after the first trading day of October and DJIA, S&P 500 and NASDAQ must be in agreement.

 

This criterion has not been met yet. A one-day DJIA advance of 167.57 points (-0.71%) would turn DJIA’s MACD positive and S&P 500 needs to advance 10.31 points (0.40%) for its MACD indicator to turn positive. However, if NASDAQ were to slip 65.05 points (0.97%) in a single day then its MACD indicator would turn negative.

 

 

 

In the following chart DJIA, S&P 500, NASDAQ and Russell 2000 have been plotted in the top pane while cumulative, daily advance/decline lines appear in the lower panes. (NYSE Comp A/D line is presented for DJIA). NASDAQ and Russell 2000 A/D lines clearly peaked in early October and have been trending lower since. NYSE and S&P 500 A/D lines appear to have peaked in the second half of October and have been moving sideways to slightly lower since.

 

 

This suggests there is some weakness below the surface of the major indexes. Even though Russell 2000 continues to linger on either side of 1500, it last closed at a new all-time high on October 5. NASDAQ closed at a new all-time high on Tuesday, October 31, but its declining A/D line is signaling fewer and fewer stocks are participating in the cooling rally. Some additional sideways to lower trading by the indexes is not out of the question and a mild pullback could go a long way to ease extremely bullish sentiment readings. Such a pullback would make a far better entry point than now.

 

If a pullback does not materialize and instead the major indexes just move sideways for a while longer that could be sufficient to build a base of support from which they can move higher during the Best Months, November to April.

 

 

Over the past two weeks since last update only iShares DJ Transports (IYT) has been added to the portfolio. IYT traded under it buy limit earlier today. Its “Return” will be calculated during the next update. IYT can still be considered on dips below its buy limit.

 

Two of four defensive positions held during the Worst Months were stopped out. iShares 20+ Year Bond (TLT) and iShares Core US Aggregate Bond (AGG) both closed below their respective stop losses on October 24. Both positions were closed out of the portfolio using their respective average prices on October 25. Excluding dividends and any trading fees, TLT and AGG were closed out for fractional losses.

 

ProShares UltraShort Bloomberg Crude Oil (SCO) was stopped out on October 26 and closed out of the portfolio on the following trading day using its average price from the 27th. OPEC and other oil exporters’ commitments to maintain supply cuts in place longer undermined typical seasonal weakness in oil.

 

Last update, DIA, IWM, QQQ and SPY, appeared in the portfolio table in preparation for when we issue our Seasonal MACD Buy signal. These will be the positions we will use to trade the “Best Six/Eight Months.” Buy Limit and Stop Loss values will be added when we issue our Seasonal MACD Buy signal.

 

Positions with Buy Limits can still be considered on dips. Some of the ETFs (most notably technology-related positions) are currently well above their respective buy limits as the possibility of a mild pullback still exists. If they are not added, we will consider adding them when we issue our Seasonal MACD Buy signal. Continue to hold GLD and SLV.