Updated from Monday, Jan. 18, with charts
NEW YORK (
) -- It's time for an update on the performance of my
, which I published on Dec. 21 and first reviewed on
I initiated a portfolio using those ideas and have opened seven of the eight proposed positions.
So far, the portfolio has gained 1.66%, underperforming the
, which is up 1.97% since Dec. 21.
Now let's review the individual trading ideas.
Idea No. 1: Buy Brazil
The position in
iShares MCSI Brazilian Index
was stopped with a gain of 3.4% on Jan. 15. The chart has a number of warning signs.
We are establishing a limit buy order at $65 for EWZ. This corresponds to a bottom in late October and consolidation area in late September. If the order is filled we will use a 5% trailing stop-loss order for risk management.
Idea No. 2: Buy China
Our position in
iShares FTSE/XinhuaChina 25 Index
was stopped out with a 2.2% gain on Jan. 13. A position was opened immediately in
ProShares UltraShort FTSE/Xinhua China 25 Index
, which has gained 4.1% in two days. The FXP position has a trailing 7.5% stop-loss order. If stopped out of FXP, FXI will be bought again immediately.
Idea No. 3: Buy Gold
The rally in gold that we anticipated in December arrived promptly following New Year's Eve. The chart for
SPDR Gold Shares
shows lots of favorable signs, except for the weak buying pressure since Dec. 1.
The current trailing stop loss order, at $107.91, will be below the support line until the price exceeds $113.59, the intraday high on Jan. 11. A higher price will raise the trailing stop. If the stop-loss order is triggered, we will buy
ProShares UltraShort Gold
immediately and manage risk with a 7.5% trailing stop.
Idea No. 4: Buy Silver
iShares Silver Trust
is the best performing holding in the portfolio. The stock chart (not shown) is similar to that for GLD, but there are two major differences: (1) MACD and price are diverging for SLV (a negative) and (2) buying pressure has been stronger for SLV (a positive). If SLV is stopped out, we will purchase GLL immediately.
Idea No. 5: Sell Oil
This is the worst performing idea.
Proshares UltraShort Oil and Gas
was stopped out for a 7.7% loss on Jan. 6. The replacement,
ProShares Ultra Oil and Gas
, has lost 0.6% so far. A fixed stop-loss order has been placed for $36.10, just below the intraday low of Jan. 13. If the stop-loss is triggered, we will purchase DUG immediately and follow with a $1 trailing stop loss.
Idea No. 6: Sell Treasuries
The limit buy price on
UltraShort 20+ Year Treasury ProShares
has not been hit. The buy limit is being dropped to $45, near the last significant low at the end of November. It was previously $47.
Idea No. 7: Sell the S&P 500
The position in
ProShares UltraShort S&P 500
was sold (stop-loss order) on Jan. 7 for a 4.6% loss. We purchased
ProShares Ultra S&P 500
at that time and SSO currently has a very small gain. The 5% trailing stop loss order is at $38.73, about $1 below the Jan. 15 close. If stopped out of SSO, we will buy SDS again.
Idea No. 8: Buy Nasdaq-100
ProShares Ultra QQQ
has advanced 3.6% but is down 3.5% from the intraday high of Jan. 15. The 5% trailing stop-loss order ($58.62) is just under the recent intraday day low ($58.77 on Jan. 12). In the chart, you can see that the MACD moving average crossing pattern just experienced has produced modest declines of 10% or less three out of four previous occurrences.
The following table summarizes portfolio status to date.
I'll publish another review of the portfolio by Monday, Feb. 1.
-- Written by John Lounsbury in Clayton, N.C.
The author may trade any of the positions mentioned at any time and may do so in a manner that doesn't follow the published portfolio strategies.
John B. Lounsbury is a financial planner and investment adviser, providing comprehensive financial planning and investment advisory services to a select group of families on a fee-only basis. He worked for 34 years with IBM, and spent 25 years in R&D management and corporate staff positions. He also was a Series 6, 7, 63 licensed representative with a major insurance company brokerage for nine years.
Specific interests include political and economic history and investment strategy analysis. He holds degrees from the University of Vermont, Columbia University and the Illinois Institute of Technology, where he studied chemistry, physics and mathematics. He is a contributor to Seeking Alpha and his own blog,