SectorVue weekend comments for Monday August 29th , 2011 Market Location and Horizon Goodnight Irene The Market firmed last week as Prevailing Wind turned bullish and Market Tide rose into bullish territory. The longer term Diamond Jim market timing is basing and will be the last to confirm a longer term bullish trend. Last week finished on a positive note despite Hurricane Irene headed for NYC and possibly interrupting the opening of trading floors Monday. Our recent purchases are working well and investors are beginning to feel more comfortable getting back in the water. Bernanke said ‘all the right things’ at the Jackson Hole meeting Friday and extended QE3 decision time until September when the FOMC meets again and Congress returns. The Growth vs. Value Ratio (page 13) found support before dipping into Value territory and growth traders perked up at the end of the week. The Income GPS portfolio is up 3.23% in appreciation and received dividends year to date with a projected dividend yield of 10.49% with just over 12% in cash. This is in line with our stated intent for the GPS portfolio and we are very pleased with our indicators cueing us to take some profits and raise cash before the big wind blew in. We continue to collect our quarterly dividends despite the volatile market environment giving us staying power and allowing us to ignore the morning headlines and business channel pundits. Our steadfast objective is to keep our principal safe and even growing a bit as we collect hefty dividends keeping one eye on the weather vane to protect against market squalls and keep portfolio volatility low. We have plenty of dry powder and plenty of quality stocks on our Bench list to consider picking up at bargain prices over the next few weeks. Sector and Market Review-- The Dow Jones finished the week up 466 points while the Nasdaq 100 NDX rallied 123 points. The Volatility index VIX topped out signaling investors are getting comfortable getting back in the water. Sector Action for last week was plus 1334 with all Sectors up . This means institutional money is coming back into the market. The Market Barometer bottomed out on August 5th and has made higher lows since then even as the market dipped to similar or lower price levels creating a positive divergence in this longer term indicator. (see graph on page 4) Rydex Alerts- bullish RUT after riding out some very volatile days. Short term Trading indicators- Bullish Market Breadth - Cumulative Market Breadth turned positive last week and this has been the most accurate indicator over the last year. (see graphs p 4) INTERMEDIATE TERM TRENDs- Bearish INTERMEDIATE OSCILLATOR - Oversold Buy The Bulls were able to get a foothold last week and the button pushers will get behind any move up or down 100 Dow points so expect some more 200 point days in the coming weeks. Gold XAU- Top of the Sector ranks although we have pointed out the negative divergence between mining stocks and gold itself. At the least expect more volatility but it looks very toppy from our point of view for the stocks and the metal. Technology TXX Bottomed out last week as Apple AAPL rebounded from Steve Jobs stepping down and IBM continues to be a leader on the big up days. Ultra ETF’s- Ultra Bullish SP500 ETFs SSO and Bullish NDX QLD are trading vehicles with nice daily ranges and a good way to play catch up if you were not brave or lucky enough to buy at the bottom. Financials KCE, BKX, XBD- Financial Sectors found some support after Buffets deal with Bank of America BAC. Healthcare IHI IHF- these sectors are value and growth plays at this point. Intuitive Surgical ISRG and Steris STE are bargain buys. Dividends DVY- We reiterated buys on AGNC with a 19% dividend and have a few other choice picks in our income portfolio. Lincoln Financial LINC has a hefty dividend and was oversold going into the weekend with hurricane Irene in the mix. SectorVue and Rydex alerts are for educational purposes only and do not constitute 'investment advice'. No representation is made that strategies will produce a profit. There is risk of loss in all trading. SUBSCRIPTION INFO A sample copy of the entire SectorVue newsletter via email may be obtained emailing firstname.lastname@example.org. Requests for a sample newsletter must include full name and voice phone number. We do not share information with anyone. Subscriptions are $500 per quarter for individuals $1000 per quarter for professionals. Rydex alerts priced separately. This report is for educational purposes only and does not constitute "investment advice".
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