Hello again. I am just recently back from vacation, and studying for a CPA Exam before that. I have been eager to collect all of my data, and see what the market is doing. Let's get into it...
The Wilshire 5000 closed at 11,453.30, up from 11,203.50, or 2.22%, since my post of three weeks ago on 8/15/10. The Wilshire 5000's 200-day moving average currently sits at 11,588.05, or 1.16% above today's close. The Wilshire 5000 has now closed below it's 200-day moving average every day since 8/11/10.
The Investor's Intelligence Survey was released on Thursday night. This week's reading was 29.4% BULLS, and 37.7% BEARS, for a spread of -8.3%. This is in comparison to a reading of 41.7% BULLS, and 27.5% BEARS, for a spread of 14.2% on August 10th. As you can see, the sentiment in the market has clearly turned more negative over the past few weeks. In fact, the sentiment hasn't been so negative since March of last year. The last time the market was this negative, we saw a 70% bounce upward, just saying.
The Volatility Index closed Friday at 23.25, down from 26.24 back on August 15th.
Now for the portfolio...
1) Verizon at $30.46, down .31% for the year, inclusive of dividends. FTR, the recent spinoff, recently closed at $7.55/share, worth $52.85 to this portfolio currently.
2) AT&T closed at $26.87, up 2.40% for the year, inclusive of dividends.
3) GE closed at $15.70, up by 4.38% for the year, inclusive of dividends.
4) TBT, the doubleshort U.S. Treasury ETF closed at $31.90, down by 26.93% since my buy.
5) FXP, the doubleshort China ETF, closed at $36.05, down by 17.08% since my buy, and after a 1:5 reverse split.
6) December 18, 2010 SPY $102 Calls closed at $10.38, down 19.53% since I purchased them this past week
7) NLY closed at $17.70, up by 2.76% since my buy, inclusive of a reinvested dividends
8) AAPL closed at $262.92 up by 35.70% since my buy.
9) January '12 Citigroup Calls closed at $.14, down by 68.18% since my buy. Still long-term bullish on Citi, and I will reiterate this from now until January 2012.
10) GS closed at $147.54, up by 8.41% since my buy.
Overall, the portfolio is down by .59% (3.96% for the DOW Dogs), versus -.38% for the Wilshire 5000. The current basket of ten stocks and options that I am currently invested in, including dividends, is down 8.82% year-to-date. The spread between my performance and the overall market (Wilshire 5000) is at .21% underperform Most of this underperformance is directly attributable to my movement into ~20% options. These investments are going to be much more volatile than actual stocks. However, with the two securities I am holding options in right now, I believe the payoff will be significant by the time their expiration comes due.
I have stated that I believe we are due for a bounce. Certainly the political environment is hanging over the market a bit, and some of that will be cleared up in November. However, the market can only become so negative given the fact that the economy is not going to fall of the face of the Earth anytime soon. This morning, I saw a quote for the 10-year at 2.58%. From 1962 when I could get data, to the present, the average yield is 6.85%. The 2010 daily average yield is close to 3.5%, and the average for the past decade back to 2000 (recall the events of the tech bubble, Enron, the credit crisis, 9/11, etc.) is 4.46%. The yield on the 10-year, the benchmark risk free rate, is a good indicator of just how negative things are. At some point, money has to flow out of the bond market, and into equities.
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