This morning I purchased one June 2011 TBT $35/$47 CALL spread for $4.65 (x100 shares = $465) to supplement the (38) shares of TBT that I am currently holding in the portfolio. My cash position in the portfolio is now $781.42, down from $1,246.42 after the purchase.
I have been saying for quite some time that I believe interest rates will continue to rise, especially with Mr. Bernanke's QE2 which is scheduled to purchase near-dated bonds through June of next year (notice the date I picked on the options). While TBT has made an impressive move upward since the announcement of QE2, I believe it has a long way to go. I purchased the (38) shares of TBT currently sitting in my portfolio on 1/3/2010, the date I started this blog. Back then, the yield on the 10-year was 3.85%, and the TBT was trading at $43.66. Today, the 10-year closed at 3.35%, down .132%, and the TBT closed at $37.81, down 3.30% today. Obviously, I took a bit of a hit on the aforementioned trade today.
To put this all into a bit of historical perspective, the average 10-year rate from 1962 to the present (a pretty big sample size) is 6.81%. Furthermore, the average rate from 2000-2009 was 4.46%. You can download and analyze all of this data for yourself here.
Just to tie a pretty little bow on this whole conversation, not only are the historical rates still low, but the U.S. Government itself has already told us it is going to prop up rates through QE2, and we there are also other forces at work which may drive rates up (see my post from yesterday here, more specifically, China and oil). As inflation begins to creep into the economy, and I am not saying it will, so too will the interest rates increase. Actually, just the fear of inflation is all that's needed.
Wednesday, December 29, 2010
Tuesday, December 28, 2010
What Will Cause The Coming Market Correction?
In the past few weeks I have said that I believe the market is overbought, and we are headed toward an early 2011 correction. Well, it is my opinion that such corrections are usually brought about in the media through the proliferation of "bad news", and then traders use that as an excuse to take the market lower. Here is my list of the top ten news stories (in no particular order) that I believe will spur our move lower:
1) The conflict between North and South Korea
Today, South Korea declared North Korea it's enemy. Big shock there. Quite frankly, that tiny man with the crazy here in North Korea is crazy. Tension has been boiling over between them and the rest of the world for quite some time. I believe that any sort of military action in that region would weigh on the markets if it came to pass.
2) Rising interest rates - both in China and here in The United States
While the media will tell you that rising rates here in America are a problem, truth be told, the rate on the 10-year could rise 15% from a 3.50% yield to 4.00% and still be at historically low levels. The problem is, as rates go up, so does the cost to service and obtain debt. Credit cards, adjustable mortgages, new mortgages, you name it. All of those reasons could be tough on American consumers.
On the other hand, China has a similar issue. Anything seen as a negative in China is seen as a negative for the rest of the world. I don't so much buy into this theory, but it's true. Rising Chinese rates will have the same effect on their economy as the reasons I just stated above for the U.S. economy.
3) The Euro Zone's debt problems
We've already had Greece and Ireland. I promise you, they are not the only ones on the other side of the pond with trouble. Portugal and Spain are also going to be an issue, and Spain is a much larger economy than the others.
4) Slowing or no perceived job growth
To quote Adrian Van Eck's most recent publication, "weekly jobless claims remain much improved from their levels of six to twelve months ago. They have been running in the area near 420,000 to 430,000 for a while now. A year or two ago, many economists were saying that weekly jobless claims would have to break below 425,000 before any kind of meaningful improvement in the monthly employment picture could take place." Now that we are at that level, the media and economists are going to want lower numbers. All in due time. Jobs are the last things to come back during an economic recovery.
5) Rising oil prices
Oil is currently around $91 a barrel, and many analysts are saying it's going to $100 or maybe even higher. Such things are sometimes a self-fulfilling prophecy. Higher oil will be seen as an added "tax" on the American consumer, and will drive up the prices of everything from goods to travel.
6) Rising inflation in China
The Chinese economy has been on a tear the last few years, fueled by gobs and gobs of money pumped into the economy by the government. With that came increased real estate and food prices, among other things. As inflation on basic items rises, demand will decrease and I ultimately feel that the huge labor force in China will demand higher wages. As wages increase, so does the cost to produce things, and so does the cost to buy Chinese made goods. The world, especially the U.S. consumes a lot of Chinese goods. See where I am going with this one?
7) Profit-taking
Honestly, the link says it all. The market has made a huge run, and most everybody is bullish as you can tell from the sentiment data I publish in my portfolio updates. Traders will want to lock-in profits at some point...
8) Municipal and State debt problems
A couple days ago, Meredith Whitney went on television and forecasted a major state and municipal debt problem here in the U.S. Meredith Whitney is famous for her call of the Financial Crisis of 2008. While she was right on her predictions then, I think she is borderline fear mongering. While I believe there will be some debt problems, in my opinion, they won't be as soon nor as deep as Meredith is forecasting.
I do not mean to downplay Ms. Whitney's work. I read this story on an obscure news site a few days back, and was astounded that this did not get more national play. Surely, this small Alabama town is not going to be the only one...
9) Iran
See: Korea, North. These folks have a crazy leader with nuclear capabilities too. 'Nough said.
10) Home price instability
October home price data came out this morning, and it wasn't good. Foreclosures are going to weigh on the market for quite some time. However, I can tell you that a realtor friend of mine told me she had her best November ever this year. While the real estate market is quite soft, as I have observed personally, I don't think it's as bad as it is made out to be in the media.
To conclude, while I do not think that all these things are going to happen, and while I think that many of these things have little to no actual economic bearing or consequence to our economy or our markets, I do think that at least one of these stories is going to be played up in the media, and I also believe it will coincide with the market correction I am forecasting.
1) The conflict between North and South Korea
Today, South Korea declared North Korea it's enemy. Big shock there. Quite frankly, that tiny man with the crazy here in North Korea is crazy. Tension has been boiling over between them and the rest of the world for quite some time. I believe that any sort of military action in that region would weigh on the markets if it came to pass.
2) Rising interest rates - both in China and here in The United States
While the media will tell you that rising rates here in America are a problem, truth be told, the rate on the 10-year could rise 15% from a 3.50% yield to 4.00% and still be at historically low levels. The problem is, as rates go up, so does the cost to service and obtain debt. Credit cards, adjustable mortgages, new mortgages, you name it. All of those reasons could be tough on American consumers.
On the other hand, China has a similar issue. Anything seen as a negative in China is seen as a negative for the rest of the world. I don't so much buy into this theory, but it's true. Rising Chinese rates will have the same effect on their economy as the reasons I just stated above for the U.S. economy.
3) The Euro Zone's debt problems
We've already had Greece and Ireland. I promise you, they are not the only ones on the other side of the pond with trouble. Portugal and Spain are also going to be an issue, and Spain is a much larger economy than the others.
4) Slowing or no perceived job growth
To quote Adrian Van Eck's most recent publication, "weekly jobless claims remain much improved from their levels of six to twelve months ago. They have been running in the area near 420,000 to 430,000 for a while now. A year or two ago, many economists were saying that weekly jobless claims would have to break below 425,000 before any kind of meaningful improvement in the monthly employment picture could take place." Now that we are at that level, the media and economists are going to want lower numbers. All in due time. Jobs are the last things to come back during an economic recovery.
5) Rising oil prices
Oil is currently around $91 a barrel, and many analysts are saying it's going to $100 or maybe even higher. Such things are sometimes a self-fulfilling prophecy. Higher oil will be seen as an added "tax" on the American consumer, and will drive up the prices of everything from goods to travel.
6) Rising inflation in China
The Chinese economy has been on a tear the last few years, fueled by gobs and gobs of money pumped into the economy by the government. With that came increased real estate and food prices, among other things. As inflation on basic items rises, demand will decrease and I ultimately feel that the huge labor force in China will demand higher wages. As wages increase, so does the cost to produce things, and so does the cost to buy Chinese made goods. The world, especially the U.S. consumes a lot of Chinese goods. See where I am going with this one?
7) Profit-taking
Honestly, the link says it all. The market has made a huge run, and most everybody is bullish as you can tell from the sentiment data I publish in my portfolio updates. Traders will want to lock-in profits at some point...
8) Municipal and State debt problems
A couple days ago, Meredith Whitney went on television and forecasted a major state and municipal debt problem here in the U.S. Meredith Whitney is famous for her call of the Financial Crisis of 2008. While she was right on her predictions then, I think she is borderline fear mongering. While I believe there will be some debt problems, in my opinion, they won't be as soon nor as deep as Meredith is forecasting.
I do not mean to downplay Ms. Whitney's work. I read this story on an obscure news site a few days back, and was astounded that this did not get more national play. Surely, this small Alabama town is not going to be the only one...
9) Iran
See: Korea, North. These folks have a crazy leader with nuclear capabilities too. 'Nough said.
10) Home price instability
October home price data came out this morning, and it wasn't good. Foreclosures are going to weigh on the market for quite some time. However, I can tell you that a realtor friend of mine told me she had her best November ever this year. While the real estate market is quite soft, as I have observed personally, I don't think it's as bad as it is made out to be in the media.
To conclude, while I do not think that all these things are going to happen, and while I think that many of these things have little to no actual economic bearing or consequence to our economy or our markets, I do think that at least one of these stories is going to be played up in the media, and I also believe it will coincide with the market correction I am forecasting.
Sunday, December 19, 2010
I Have Joined The Yakezie Challenge!!!
Dear Readers,
As of today, I am joining the Yakezie Challenge. The Yakezie Challenge is the process you have to go through to get your financial blog listed on Yakezie. For those of you who don't know, as I didn't five minutes ago, Yakezie is one of the top financial blogs on the interwebs. In order to get your blog listed with them, you must complete a simple process, listed here.
Basically, in order to get my blog listed, I have to 1) install the badge (see at right, a little ways down the page), 2) write consistently 2-4 times per week for six months (I should be doing this anyway, and have failed over the last two months. This will be good motivation to maintain my pace.), and 3) get my Alexa rank above 200,000 (I am currently at an abysmal 12,506,744).
How you can you help?
Read my blog. Please. If you like it, keep reading, tell your friends and write comments. If you hate it, do the same. I would love to hear what readers think either way. If you comment, please leave your name and website/blog address so we can get it some exposure and engage in constructive dialogue.
As of today, I am joining the Yakezie Challenge. The Yakezie Challenge is the process you have to go through to get your financial blog listed on Yakezie. For those of you who don't know, as I didn't five minutes ago, Yakezie is one of the top financial blogs on the interwebs. In order to get your blog listed with them, you must complete a simple process, listed here.
Basically, in order to get my blog listed, I have to 1) install the badge (see at right, a little ways down the page), 2) write consistently 2-4 times per week for six months (I should be doing this anyway, and have failed over the last two months. This will be good motivation to maintain my pace.), and 3) get my Alexa rank above 200,000 (I am currently at an abysmal 12,506,744).
How you can you help?
Read my blog. Please. If you like it, keep reading, tell your friends and write comments. If you hate it, do the same. I would love to hear what readers think either way. If you comment, please leave your name and website/blog address so we can get it some exposure and engage in constructive dialogue.
Portfolio Update - 12/19/10
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The Wilshire 5000 closed the week at 13,203.03, up from 13,175.94, or .21%, this past week. The Wilshire 5000's 200-day moving average currently sits at 11,878.70, or 11.15% below Friday's close.
This week's reading of the Investor's Intelligence Survey was 56.8% BULLS, and 20.5% BEARS, for a spread of 36.3%. This is in comparison to a reading of 56.2% BULLS, and 21.3% BEARS, for a spread of 34.9% back on December 7th.
The Volatility Index ($VIX) closed Friday at 16.11, down from 17.61 last Friday.
Now for the portfolio...
1) Verizon ($VZ) at $34.64, up 13.03% for the year, inclusive of dividends. FTR, the recent spinoff, recently closed at $9.25/share, worth $64.75 to this portfolio currently.
2) AT&T ($T) closed at $29.21, up 4.50% for the year, inclusive of dividends.
3) GE ($GE) closed at $17.70, up by 16.84% for the year, inclusive of dividends.
4) TBT, ($TBT) the doubleshort U.S. Treasury ETF closed at $38.13, down 12.66% since my buy.
5) January 2012 Dupont ($DD) $45/$55 CALL spreads purchased a few months back closed at $4.85, up 32.88% since my buy.
6) Apple ($AAPL) closed at $320.61 up by 65.48% since my buy.
7) January '12 Citigroup ($C) CALLs closed at $.12, down by 72.73% since my buy.
8) Citigroup ($C) closed at $4.70, up by 18.09% since my buy.
9) Goldman Sachs ($GS) closed at $164.04, up by 20.53% since my buy.
10) January '11 S&P 500 ETF ($SPY) $127/$120 PUT Spread that I purchased on Wednesday at $2.92 closed at $2.58, or down 11.64%.
As you see above, sentiment data has gotten way overdone on the upside. To put things into perspective, the BULL/BEAR spread of 36.3% is the highest it's been since 5/4/10, right at the beginning of the 15+% correction that we saw over the summer. While the upcoming correction will not be as deep or as long, it has to be coming at some point. The VIX is currently at 16.11, with the 25-day moving averageis at 19.27, historically pretty low. In addition, every moving average of the Put/Call ratio is more than 1 standard deviation below the historical average. All of this is pointing to the market being overbought.
As I said last week, I believe the market will continue to melt up into year-end. I am going to continue to raise cash into year-end, but don't see any reason to do it right this second. As you see, my SPY PUT Spread is down 11% since I bought it. I am not worried. If the market looks like it refuses to break in another three weeks or so, I may have to liquidate that position at a loss. Until then, I will remain patient.
Overall, the portfolio is up by 19.72% (13.56% for the DOW Dogs), versus 14.83% for the Wilshire 5000. The current basket of eleven stocks and options that I am currently invested in, including dividends, is up 8.11% year-to-date. The spread between my performance and the overall market (Wilshire 5000) is at 7.01% outperform.
The Wilshire 5000 closed the week at 13,203.03, up from 13,175.94, or .21%, this past week. The Wilshire 5000's 200-day moving average currently sits at 11,878.70, or 11.15% below Friday's close.
This week's reading of the Investor's Intelligence Survey was 56.8% BULLS, and 20.5% BEARS, for a spread of 36.3%. This is in comparison to a reading of 56.2% BULLS, and 21.3% BEARS, for a spread of 34.9% back on December 7th.
The Volatility Index ($VIX) closed Friday at 16.11, down from 17.61 last Friday.
Now for the portfolio...
1) Verizon ($VZ) at $34.64, up 13.03% for the year, inclusive of dividends. FTR, the recent spinoff, recently closed at $9.25/share, worth $64.75 to this portfolio currently.
2) AT&T ($T) closed at $29.21, up 4.50% for the year, inclusive of dividends.
3) GE ($GE) closed at $17.70, up by 16.84% for the year, inclusive of dividends.
4) TBT, ($TBT) the doubleshort U.S. Treasury ETF closed at $38.13, down 12.66% since my buy.
5) January 2012 Dupont ($DD) $45/$55 CALL spreads purchased a few months back closed at $4.85, up 32.88% since my buy.
6) Apple ($AAPL) closed at $320.61 up by 65.48% since my buy.
7) January '12 Citigroup ($C) CALLs closed at $.12, down by 72.73% since my buy.
8) Citigroup ($C) closed at $4.70, up by 18.09% since my buy.
9) Goldman Sachs ($GS) closed at $164.04, up by 20.53% since my buy.
10) January '11 S&P 500 ETF ($SPY) $127/$120 PUT Spread that I purchased on Wednesday at $2.92 closed at $2.58, or down 11.64%.
As you see above, sentiment data has gotten way overdone on the upside. To put things into perspective, the BULL/BEAR spread of 36.3% is the highest it's been since 5/4/10, right at the beginning of the 15+% correction that we saw over the summer. While the upcoming correction will not be as deep or as long, it has to be coming at some point. The VIX is currently at 16.11, with the 25-day moving averageis at 19.27, historically pretty low. In addition, every moving average of the Put/Call ratio is more than 1 standard deviation below the historical average. All of this is pointing to the market being overbought.
As I said last week, I believe the market will continue to melt up into year-end. I am going to continue to raise cash into year-end, but don't see any reason to do it right this second. As you see, my SPY PUT Spread is down 11% since I bought it. I am not worried. If the market looks like it refuses to break in another three weeks or so, I may have to liquidate that position at a loss. Until then, I will remain patient.
Overall, the portfolio is up by 19.72% (13.56% for the DOW Dogs), versus 14.83% for the Wilshire 5000. The current basket of eleven stocks and options that I am currently invested in, including dividends, is up 8.11% year-to-date. The spread between my performance and the overall market (Wilshire 5000) is at 7.01% outperform.
Wednesday, December 15, 2010
Time To Get Short!
I have been writing for a few weeks now that I am beginning to get bearish on the market in the short term. That doesn't mean I am bearish on the economy on the market, it just means that I foresee a correction coming, and I want to profit from it. As such, here is what I am going to do...
I have an order in to purchase a January 2011 SPY (Ticker - $SPY) $127/$120 PUT spread at $2.86. As you know, the SPY is the ETF that tracks the performance of the S&P 500. If the order fills today, I am going to add four positions to the portfolio, using about $1,144 of my available cash.
You can follow me on Twitter to get the status on this trade. I will be updating this space in the next few days to fill you in on the portfolio's progress. Happy trading!
I have an order in to purchase a January 2011 SPY (Ticker - $SPY) $127/$120 PUT spread at $2.86. As you know, the SPY is the ETF that tracks the performance of the S&P 500. If the order fills today, I am going to add four positions to the portfolio, using about $1,144 of my available cash.
You can follow me on Twitter to get the status on this trade. I will be updating this space in the next few days to fill you in on the portfolio's progress. Happy trading!
Sunday, December 12, 2010
Second Update In A Week! Portfolio Up 20.95%!!!
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I'm feeling rather productive lately, and I thought it would be a good idea to update you on the status of my portfolio. As I've stated in the last few posts, I have begun to raise cash into year end. While I think we are going to continue to melt up into the new year, I am beginning to believe that the data is pointing to the fact that we may see lower prices in the not-so-distant future. Make no mistake, I am very bullish on the market going forward. Very, very bullish. However, what goes up must come down...at least momentarily on occasion.
The Wilshire 5000 closed at 13,175.94, up from 13,009.05, or 1.28%, since Tuesday. The Wilshire 5000's 200-day moving average currently sits at 11,830.03, or 11.38% below Friday's close.
The Investor's Intelligence Survey was released on Thursday night. This week's reading was 56.2% BULLS, and 21.3% BEARS, for a spread of 34.9%. This is in comparison to a reading of 55.4% BULLS, and 21.8% BEARS, for a spread of 33.6% back on November 30th.
The Volatility Index closed Friday at 17.61, down from 17.99 on Tuesday.
Now for the portfolio...
1) Verizon at $34.04, up 11.07% for the year (please note, this is inconsistent with the percentage in my last post. Forgive me, but I had a formula error in my spreadsheet that incorrectly understated Verizon's performance to date), inclusive of dividends. FTR, the recent spinoff, recently closed at $9.37/share, worth $65.59 to this portfolio currently.
2) AT&T closed at $28.89, up 3.35% for the year, inclusive of dividends.
3) GE closed at $17.72, up by 16.97% for the year, inclusive of dividends.
4) TBT, the doubleshort U.S. Treasury ETF closed at $38.28, down 12.31% since my buy.
5) January 2012 DD $45/$55 CALL spreads purchased a few months back closed at $4.54, up 24.38% since my buy.
6) AAPL closed at $320.56 up by 65.45% since my buy.
7) January '12 Citigroup CALLs closed at $.15, down by 65.91% since my buy.
8) C closed at $4.78, up by 20.10% since my buy.
9) GS closed at $168.47, up by 23.78% since my buy.
Overall, the portfolio is up by 20.95% (12.62% for the DOW Dogs), versus 13.94% for the Wilshire 5000. The current basket of nine stocks and options that I am currently invested in, including dividends, is up 8.11% year-to-date. The spread between my performance and the overall market (Wilshire 5000) is at 7.01% outperform.
In the week or two ahead I am most likely going to start raising a bit more cash. As is now, I have roughly $2,400 in the portfolio in cash. With the upcoming pullback/correction I am forecasting, I believe I will most likely sell AAPL, VZ, T, and GE. I will most likely be buying some SPY PUTs with part of the cash, and leaving the remaining for a better entry point into some names, including new DOW Dogs. But, as I said before, I believe we will continue to melt higher into year end. How high we go and how quickly we go in the next two to four weeks will determine how hard and how far we fall after that.
I'm feeling rather productive lately, and I thought it would be a good idea to update you on the status of my portfolio. As I've stated in the last few posts, I have begun to raise cash into year end. While I think we are going to continue to melt up into the new year, I am beginning to believe that the data is pointing to the fact that we may see lower prices in the not-so-distant future. Make no mistake, I am very bullish on the market going forward. Very, very bullish. However, what goes up must come down...at least momentarily on occasion.
The Wilshire 5000 closed at 13,175.94, up from 13,009.05, or 1.28%, since Tuesday. The Wilshire 5000's 200-day moving average currently sits at 11,830.03, or 11.38% below Friday's close.
The Investor's Intelligence Survey was released on Thursday night. This week's reading was 56.2% BULLS, and 21.3% BEARS, for a spread of 34.9%. This is in comparison to a reading of 55.4% BULLS, and 21.8% BEARS, for a spread of 33.6% back on November 30th.
The Volatility Index closed Friday at 17.61, down from 17.99 on Tuesday.
Now for the portfolio...
1) Verizon at $34.04, up 11.07% for the year (please note, this is inconsistent with the percentage in my last post. Forgive me, but I had a formula error in my spreadsheet that incorrectly understated Verizon's performance to date), inclusive of dividends. FTR, the recent spinoff, recently closed at $9.37/share, worth $65.59 to this portfolio currently.
2) AT&T closed at $28.89, up 3.35% for the year, inclusive of dividends.
3) GE closed at $17.72, up by 16.97% for the year, inclusive of dividends.
4) TBT, the doubleshort U.S. Treasury ETF closed at $38.28, down 12.31% since my buy.
5) January 2012 DD $45/$55 CALL spreads purchased a few months back closed at $4.54, up 24.38% since my buy.
6) AAPL closed at $320.56 up by 65.45% since my buy.
7) January '12 Citigroup CALLs closed at $.15, down by 65.91% since my buy.
8) C closed at $4.78, up by 20.10% since my buy.
9) GS closed at $168.47, up by 23.78% since my buy.
Overall, the portfolio is up by 20.95% (12.62% for the DOW Dogs), versus 13.94% for the Wilshire 5000. The current basket of nine stocks and options that I am currently invested in, including dividends, is up 8.11% year-to-date. The spread between my performance and the overall market (Wilshire 5000) is at 7.01% outperform.
In the week or two ahead I am most likely going to start raising a bit more cash. As is now, I have roughly $2,400 in the portfolio in cash. With the upcoming pullback/correction I am forecasting, I believe I will most likely sell AAPL, VZ, T, and GE. I will most likely be buying some SPY PUTs with part of the cash, and leaving the remaining for a better entry point into some names, including new DOW Dogs. But, as I said before, I believe we will continue to melt higher into year end. How high we go and how quickly we go in the next two to four weeks will determine how hard and how far we fall after that.
Tuesday, December 7, 2010
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I'm back! I have not posted on this blog in a month and four days (by my count), and it was about time for an update!
The Wilshire 5000 closed at 13,009.05, up from 12,323.47, or 5.56%, since October 12th. The Wilshire 5000's 200-day moving average currently sits at 11,813.05, or 10.12% below today's close.
The Investor's Intelligence Survey was released on Thursday night. This week's reading was 55.4% BULLS, and 21.8% BEARS, for a spread of 33.6%. This is in comparison to a reading of 45.6% BULLS, and 28.3% BEARS, for a spread of 17.3% back in October. Bullish sentiment is now in what I would consider to be a dangerous range, as it's been well over 50 for three straight weeks, and the 4-week moving average has been over 50 for the second straight week.
The Volatility Index closed Friday at 17.99, down from 18.93 back on October 12th. It is also worth noting that the 25-day moving average has closed below 20 for the third straight trading day, what I consider to be dangerous territory.
Now for the portfolio...
1) Verizon at $32.95, up 7.60% for the year, inclusive of dividends. FTR, the recent spinoff, recently closed at $9.11/share, worth $63.77 to this portfolio currently.
2) AT&T closed at $28.54, up 2.10% for the year, inclusive of dividends.
3) GE closed at $17.03, up by 12.41% for the year, inclusive of dividends.
4) TBT, the doubleshort U.S. Treasury ETF closed at $37.49, down an abysmal 14.12% since my buy. However, it is worth noting TBT has gained significant ground since my last portfolio update, and I think it will continue to do so for the foreseeable future. Remember, the 10-year is still only down near 3%, historically still very low.
5) January 2011 WHR $75/$85 Call spread purchased a few months back I sold at $6.50, up 39.78% since my buy.
6) January 2012 DD $45/$55 Call spreads purchased a few months back closed at $4.70, up 28.77% since my buy.
7) AAPL closed at $318.21 up by 64.24% since my buy.
8) January '12 Citigroup Calls closed at $.13, down by 70.45% since my buy.
9) C closed at $4.62, up by 16.08% since my buy.
10) GS closed at $161.59, up by 18.73% since my buy.
Overall, the portfolio is up by 19.03% (9.47% for the DOW Dogs), versus 13.15% for the Wilshire 5000. The current basket of ten stocks and options that I am currently invested in, including dividends, is up 7.62% year-to-date. The spread between my performance and the overall market (Wilshire 5000) is at 5.88% outperform.
Overall, my portfolio has done quite well this year. As I have detailed a bit above, I am getting a bit worried about where the market is. I think we are due for some sort of a dip or correction in the near future. As you can see from this post, and my prior post, I have raised quite a bit of cash, and I may be putting that to work on the short side in the near future, maybe as soon as tomorrow. As I make trades, I will update this blog going forward.
I'm back! I have not posted on this blog in a month and four days (by my count), and it was about time for an update!
The Wilshire 5000 closed at 13,009.05, up from 12,323.47, or 5.56%, since October 12th. The Wilshire 5000's 200-day moving average currently sits at 11,813.05, or 10.12% below today's close.
The Investor's Intelligence Survey was released on Thursday night. This week's reading was 55.4% BULLS, and 21.8% BEARS, for a spread of 33.6%. This is in comparison to a reading of 45.6% BULLS, and 28.3% BEARS, for a spread of 17.3% back in October. Bullish sentiment is now in what I would consider to be a dangerous range, as it's been well over 50 for three straight weeks, and the 4-week moving average has been over 50 for the second straight week.
The Volatility Index closed Friday at 17.99, down from 18.93 back on October 12th. It is also worth noting that the 25-day moving average has closed below 20 for the third straight trading day, what I consider to be dangerous territory.
Now for the portfolio...
1) Verizon at $32.95, up 7.60% for the year, inclusive of dividends. FTR, the recent spinoff, recently closed at $9.11/share, worth $63.77 to this portfolio currently.
2) AT&T closed at $28.54, up 2.10% for the year, inclusive of dividends.
3) GE closed at $17.03, up by 12.41% for the year, inclusive of dividends.
4) TBT, the doubleshort U.S. Treasury ETF closed at $37.49, down an abysmal 14.12% since my buy. However, it is worth noting TBT has gained significant ground since my last portfolio update, and I think it will continue to do so for the foreseeable future. Remember, the 10-year is still only down near 3%, historically still very low.
5) January 2011 WHR $75/$85 Call spread purchased a few months back I sold at $6.50, up 39.78% since my buy.
6) January 2012 DD $45/$55 Call spreads purchased a few months back closed at $4.70, up 28.77% since my buy.
7) AAPL closed at $318.21 up by 64.24% since my buy.
8) January '12 Citigroup Calls closed at $.13, down by 70.45% since my buy.
9) C closed at $4.62, up by 16.08% since my buy.
10) GS closed at $161.59, up by 18.73% since my buy.
Overall, the portfolio is up by 19.03% (9.47% for the DOW Dogs), versus 13.15% for the Wilshire 5000. The current basket of ten stocks and options that I am currently invested in, including dividends, is up 7.62% year-to-date. The spread between my performance and the overall market (Wilshire 5000) is at 5.88% outperform.
Overall, my portfolio has done quite well this year. As I have detailed a bit above, I am getting a bit worried about where the market is. I think we are due for some sort of a dip or correction in the near future. As you can see from this post, and my prior post, I have raised quite a bit of cash, and I may be putting that to work on the short side in the near future, maybe as soon as tomorrow. As I make trades, I will update this blog going forward.
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