Please subscribe to email updates to this blog! The link to do so is at the right hand side of this page. While you’re at it, follow me on Twitter!
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.
No comments:
Post a Comment