January is the Reason for Our Blog

This is the most important POST that I could ever do. The reason for our BLOG is to present alternative market trends to the readers. Alternative to what?

Look at your 401(K) or your investment portfolio for the month of January. The S&P, an index for the biggest 500 stocks on the New York Stock Exchange, was down 5% for the month. How much was your portfolio down?

There is a time to be in, a time to be out, and a time to be short.

We are down to one position: being short the Euro Currency, or long the U.S. Dollar. Everything else has fallen this month. So, when my programs went short the Euro, one could have simply exited all postions and waited....... At the very least, you would have lost nothing.

That would be one approach. Or, you could have actually gone short the Euro through an ETF. That would have made you 7% so far. In any event, I think I have made my point. No, actually January made the point.

Short Euro ETF EOU Entry Price 18.49 Stop: 19.29 Last: 19.89 UP 7.5%
Short Euro EUH10: 144.97 Stop: 141.38 Last: 138.58

Soybeans was stopped out with a loss; there was no ETF play on Soybeans.

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

An Intellectual Theory

There is an intellectual theory asserting that markets are a random walk. I never believed that theory. I believe that many markets do trend over certain timeframes. If you want partial proof, or at least a counter-example, just look at the behavior of the last two weeks. The U.S. Dollar has been generally strong. For the most part, most of the other markets we track were down: stock markets, metals, energy, and food.

There are no new signals for tomorrow. The existing positions are shown below. Both of these positions improved in value from yesterday.

Long Soybeans SH10: Entry Price: 955 Stop: 919 Last: 932.75

Short Euro ETF EOU Entry Price 18.49 Stop: 19.09 Last: 19.57
Short Euro EUH10: 144.97 Stop: 142.09 Last: 139.70


Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

No New Signals

There were no new signals from my programs for today's market.

The action continued with a similar theme to recent days: the U.S. Dollar was strong, while many investments were weak. The stock market, energy, metals, and foods were weak. Our soybeans lost money, but our short Euro continued to make gains. Two other positions never made it to the ETF stage, because they were short-lived.

Long Soybeans SH10: Entry Price: 955 Stop: 919 Last: 929

Short Euro ETF EOU Entry Price 18.49 Stop: 19.09 Last: 19.46
Short Euro EUH10: 144.97 Stop: 142.09 Last: 140.21

Long Copper: Entry 3.3395 Out 3.2795
Long Heating Oil: Entry 196.02 Out 196.91


Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

Update: Heating Oil Signal Over; Copper Over

During last evening, heating oil rose, then was stopped out for a profit. Therefore, technically, there is no current signal on heating oil. This also means that the ETF position never even took effect.

In addition, Copper was stopped out with a loss. Therefore, the ETF is irrelevant. I'll give you statistics tonight.


Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

More Dollar Strength

Today was characterized by more strength in the U.S. Dollar. However, silver rallied back in spite of dollar strength. Our short Euro position improved, and is well ahead. Our soybean position improved, but is still in the negative for now.

For tomorrow, buy Copper, HGH10. The record is 39/51 for a 76% win ratio. However, be advised that Copper was UP about 100% last year. So, many commentators feel it is over-bought and due for a correction downward. It is an industrial metal and may be telling us the Global economy will be recovering. We'll have to wait and see. The ETF is JJC.

For tomorrow, buy Heating Oil, HOH10. The record is 50/59 for 85%, but bear in mind that Heating Oil has been in a precipitous decline. It is scary to buy in right here. The ETF is UHN.

If the U.S. Dollar continues strong, then both of the new signals could be disastrous.

Long Soybeans SH10: Entry Price: 955 Stop: 919 Last: 947.5

Short Euro ETF EOU Entry Price 18.49 Stop: 18.84 Last: 19.28
Short Euro EUH10: 144.97 Stop: 143.07 Last: 140.69

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

S&P Arrests Decline

The S&P was up slightly today at 1092.50, up 1.50, on the March futures contract. However, in overnight trading, the S&P is down nearly 10 points. This represents about 100 points on the Dow. However, much can change before the opening tomorrow in New York. The stock market, while only open for about 7 hours during the day, actually trades nearly 24 hours a day, 5 days per week on the electronically-based Globex. A lot can happen overnight; yet, sometimes the overnight session is very quiet.

Our short silver made money, our short Euro continues to make money, and the long soybeans is a loser so far.

Long Soybeans SH10: Entry Price: 955 Stop: 919 Last: 937.25

Short Euro ETF EOU Entry Price 18.49 Stop: 18.84 Last: 19.09
Short Euro EUH10: 144.97 Stop: 143.07 Last: 141.50

Short Silver: stopped out with profits SIH10: Short SI ETF SLV Entry Price 4.54 Stopped Out: 4.55
Short SI SIH10: 17.445 Stopped Out: 17.055 Profit: $2000

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

A Good Week for Us

This was a rough week for the markets we follow. The currencies, foods, energies, metals and stock markets fell, while the U.S. Dollar rose.

This week also screamed the message of the philosophy BLOG of a few days ago. There are times to be in, times to be out, and times to sometime be short markets. If you have a chance, go back and read the BLOG on philosophy dated January 20.

We have one new signal for Monday (actually Sunday afternoon) that is to buy Soybeans. The future symbol is SH10. The record was 97 wins out of 120 trades for an 80% win ratio. I don't know of an ETF for Soybeans, but if one of you does, please share it with our group. I will say this, it is scary to go long anything right now, given the markets of last week. However, the signal is saying that Soybeans are over-sold.

Also, if you would like the perspective of a market-genius on the foods, then watch the following:



You certainly don't have to guess anything about Rogers' opinion. He has been an immensely successful investor.

I want to say again, that I appreciate the emails I have been receiving. Keep them coming!

This week brought 3 new signals, two to short silver, and one to short the Euro. All three futures signals were extremely profitable. From the ETF standpoint, the Euro and first Silver signals were profitable, while the second silver signal broke-even. To repeat from previous posts, the reason for this is that the futures markets trade on a different time-clock than the ETFs. For longer-term signals this shouldn't be an issue, but for short-term signals it can be material.

Have a great day!

Short SI ETF SLV Entry Price 4.54 Stop: 4.55 Last: 4.56
Short SI SIH10: 17.445 Stop: 17.055 Last: 16.932

Short Euro ETF EOU Entry Price 18.49 Stop: 18.84 Last: 19.16
Short Euro EUH10: 144.97 Stop: 143.07 Last: 141.33
The Euro numbers are unchanged from the last BLOG

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

Another Down Day

It was another huge down day for all the markets we track. The S&P 500 was down 2%. Our Euro system made more money, because the Euro was down. The British Pound was stopped out for a modest gain. It turns out that the 6/6 silver signal was right on the money, with silver dropping over 2% as well. I have another fresh signal to sell silver which generated 17 wins out of 22 trades for 77%. The symbols are SIH10 (future) and ZSL (ETF). However, ZSL is leveraged, so be careful! It opened yesterday at 4.22 and closed at 4.40. After all, it is a leveraged short silver fund. I looked for a non-levered ETF, but I couldn't find one. Maybe a reader knows of one. If you do, please share it.

Have a great day!

Short Euro ETF EOU Entry Price 18.49 Stop: 18.84 Last: 19.28
Short Euro EUH10: 144.97 Stop: 143.07 Last: 140.79

The British Pound was stopped out for a modest gain:
FXB Entry Price: 160.88 exit: 161.27
BPH10 Entry Price: 161.06 exit 161.75

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

Philosophy

Most people who have invested in stocks for the past several years are disappointed with the returns they have earned. This is because the last decade has been a flat to down for stocks. We believe that "to everything there is a season."

There is a time to be in stocks, a time to be out, and we believe that sometimes you should be on the short side, that is, in a position to make money when stocks go down. In addition, there are other investments in the world besides stocks. There are currencies, energy, metals, and foods. There is real estate. There is a time to be invested in these, a time to be out, and possibly a time to be short.

That's the long and the short of it!

In the future, we intend to do a website, and expand on these concepts.



Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

Down, down, down...

All the markets that we track with our systems were down. Currencies, energy, metals, foods, and stock market indices were down. Practically the only thing up was the U.S. Dollar. See the previous post entitled Dollars, Dollars and more Dollars for some background.

With regard to my programs, two lost in value, and one gained. However, the gains in the Euro far-outpaced the combined losses in Cotton and the British Pound.

There is a new signal to sell silver short. My system generated 6 trades over a ten-year period, with 6 wins. Therefore, it was 100% profitable. But at 6 trades, it isn't credible. I mention it simply because it tends to indicate that silver has been over-bought. This does not invalidate the bull market in silver.


Short Euro ETF EOU Entry Price 18.49 Stop: 18.71 Last: 19.26
British Pound ETF FXB Entry Price: 160.88 Stop: 161.27 Last: 163.55

Short Euro EUH10: 144.97 Stop: 143.58 Last: 141.03
British Pound BPH10 Entry Price: 161.06 Stop: 161.75 Last: 163.33

Cotton was stopped out:
Cotton ETF BAL Entry Price: 36.75 Exit: 34.55
Cotton CTH10 Entry Price: 74.00 Exit: 70.80

The Cocoa signal was invalid. Sorry for any inconvenience this may have caused.


Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

Market Vicissitudes

Today's action featured ups and downs. Of our three program-traded positions, two are up and one is down: the short Euro, and the long British Pound are ahead, while the long cotton is down. The specifics appear at the end of the post.

One new signal for today: buy cocoa. The futures symbol is CCH10 and the ETF symbol is NIB. By the way, if any reader knows of other ETFs for a given position, please feel free to share. The fund NIB has tiny daily volume, so it will be subject to more fluctuations than a more heavily traded fund.

Have a great day!

Thanks to member Donna for "helping" with this post.

Short Euro ETF EOU Entry Price 18.49 Stop: 18.52 Last: 18.73
Cotton ETF BAL Entry Price: 36.75 Stop: 34.55 Last: 35.20
British Pound ETF FXB Entry Price: 160.88 Stop: 161.27 Last: 163.55

Short Euro EUH10: 144.97 Stop: 144.48 Last: 142.85
Cotton CTH10 Entry Price: 74.00 Stop: 70.80 Last: 71.64
British Pound BPH10 Entry Price: 161.06 Stop: 161.75 Last: 163.33

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

Update

No new signals for Tuesday. I'll send an update of current positions on the next update: we are short the Euro, long the British Pound, and long Cotton. All three positions are moving in our favor.

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

Julie & Julia

This BLOG is generally not about movies. Julie & Julia, however, I believe has applicability to the world of investments.

1) Both women in the film overcome seemingly insurmountable obstacles to succeed, and they both do it in a man's world. We need to do the same: tackle our problems head-on and succeed.

2) Meryl Steep is personally nothing like Julia Childs yet took on her identity so that she was totally believable; she won a Golden Globe last night. We need to do the same: sometimes we need to consider things that were heretofore alien to us, and wrap our arms around them in order to succeed.

3) The movie shows us the power of the BLOG in modern society, and more generally, the power of the Internet in accomplishing what we want.

J&J was my favorite film last year because of the way it embodied these themes. There were some other elements of the film that were not applicable to the investment world: my absolute love of French cooking, wine, and the recurring theme of cooking with butter. I know the latter not politically correct, but nonetheless true for me.

Have a successful day!


Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

Interesting S&P

The Standard and Poors stock index dropped on Friday. However, the rally from last March remains intact. Market Gurus have been baffled by the rally. It has been fairly long as stock market rallies go. Is it a signal that a recovery is on the way? Is it a bear market rally? Or is it the only place that cash is going with interest rates on bank money market accounts near 1%? It seems like we should know in the near future. My computer-programs have no new signals in this sector.

As a matter of fact, there are no new signals for Monday. A summary of where we are appears below:

Short Euro (EOU): Entry Price 18.49 Stop: 18.39 Last: 18.50
Cotton ETF(BAL) Entry Price: 36.75 Stop: 34.55 Last: 35.20
British Pound ETF:FXB Entry Price: 160.88 Stop: 161.12 Last: 162.13

Short Euro EUH10: 144.97 Stop: 144.65 Last: 143.83
Cotton CTH10 Entry Price: 74.00 Stop: 70.80 Last: 72.08
British Pound BPH10 Entry Price: 161.06 Stop: 161.54 Last: 163.21
Use caution in setting the stop on the Pound because this stop is pretty far away. While profits are likely, they aren't much with the current stop.


Short Gold GCG10 Entry Price: 1137.90 Stop: 1133.40 Stopped out at 1133.40. Profit: $450

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

Dollars, dollars and more dollars

As you may know, many currencies have risen during the past year relative to the U.S. Dollar. The bailouts of the financial system, in its many forms, coupled with other spending has created massive deficits. So, the market has assessed that as a decline in the U.S. Dollar. Against some currencies the decline has been quite steep. However, some have called for a bear market rally in the U.S. Dollar. Who knows? However, that leads me to the next new signal from the programs I created: Sell Short the Euro Currency.

The signal was effective for the futures market at 3:00 today. Its record was 8/8=100%. However, it should be noted that this is hardly credible. Some of the other signals I have shared with you have 60+ trades over a ten-year period. The futures symbol is ECH10. There is an ETF, EUO, but approach with caution. This is a leveraged fund, so a 1% change in the underlying currency becomes a 2% change in the ETF. This is not for the faint of heart. Buying this fund means you are betting that the Euro Currency will fall, and that the U.S. Dollar will rise (for a change). This could be a trade of short duration: the average length of days in the market was 16.5. This is an average; there were trades of one or two days. With trades of short duration there is the extra risk that the ETF performance will not mirror the performance in the futures market, because of the timing differences. This phenomenon was dealt with in a previous post entitled "Good News...Bad News...No News." Also, commentators have called for a Dollar Bear Market Rally. But bear market rallies, while vicious, are often short-lived. I am happy to say that the Euro opened at 1.4497 and is now at 1.4389. The dollar is actually rising.

Other Signals:
Cotton ETF(BAL) Entry Price: 36.75 Stop: 34.55 Last: 35.54
British Pound ETF:FXB Entry Price: 160.88 Stop: 161.12 Last: 162.79
Use caution in setting the stop on the Pound because this stop is pretty far away. While profits are likely, they aren't much with the current stop.

Cotton CTH10 Entry Price: 74.00 Stop: 70.80 Last: 72.41
British Pound BPH10 Entry Price: 161.54 Stop: 161.45 Last: 163.21
Short Gold GCG10 Entry Price: 1137.90 Stop: 1156.90 Last: 1143.00

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The quotes and symbols used in the BLOG are believed to be reliable, but no guarantees are made with regard to the accuracy.

Thanks!

Thanks to all of you who are following this BLOG. This has been fun for me, and judging by the emails I have received, fun for you as well. Most of you have chosen to write to me directly, rather than to put up comments on the posting board. Thanks for all of your emails! Keep them coming.

Today's Story

Both Cotton and the British Pound were up today, so both of our computer programmed positions increased in value.

These are difficult times in which to invest. Many people have lost money on all of their investments since 2008. Most people would not claim to have known what was going to happen; let alone, to have capitalized on the prediction.

One new signal popped out today: short Gold. Most people wouldn't short anything, let alone a precious metal that is in a bull market. However, in the interest of doing a complete BLOG, I mention it for your information. The track record on this system was: 37/46=80%. This is based upon my computer programs. However, this signal should simply be viewed as an indication that the metals are over-bought on a short-term basis.

Cotton ETF(BAL) Entry Price: 36.75 Stop: 34.55 Last: 35.96
British Pound ETF:FXB Entry Price: 160.88 Stop: 161.04 Last: 162.38

Cotton CTH10 Entry Price: 74.00 Stop: 70.80 Last: 73.43
British Pound BPH10 Entry Price: 161.06 Stop: 161.45 Last: 162.79

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

Good News....Bad News.....No News

First, for the No News. No new signals were generated by the programs this evening.

Second: Good News! The British Pound and Cotton are up strongly this morning.

Third: I want to spend a little time giving you some background before presenting the numerical results. I have spent the past three years writing computer programs that would generate profits on a mechanical basis. To do this, I used data going back in time as far as I could get it. This data was from the futures market. For many of the futures, the data goes back at least ten year. I then wrote these programs to make money over the long-term. Some of the positions taken are very short term (days) and some end up being very long (months). The duration of the position dynamically depends upon what the actual market does. My theory is that these signals can be applied to ETFs as well. I have not tested the programs on the ETFs because the data on ETFs does not go back far enough to be credible. My theory is that for the long-term signals, both the futures and the ETFs will make money or lose money in the same proportions. However, for the short-term signals, it is quite possible that the results may be different. For example, gold trades from 3:00 pm in the afternoon for 23 hours until 2:00 pm the next day. However, the ETFs trade during the hours that the New York Exchange is open. Therefore, there is a time-disconnect between the two. It is possible that on a short-term basis, one will be profitable whereas the other will not.

Fourth: The Good News and the Bad News. Both the silver and the gold futures were stopped out with intra-day gains. The stops are calculated on a minute-by-minute basis. Both metals rallied during the evening, then fell by morning. Both futures positions generated gains, but the ETFs generated losses. Again, this is a problem with the fact that the two are traded during different time frames. This won't matter so much with the signals that go for a month (and there are many), but it does matter with the short-term signals.


Gold: GCG10 Entry Price: 1139.00 Exit: 1143.80 Gain: $480
Silver: SIH10 Entry Price: 18.56 Exit: 18.615 Gain: $275

Gold: ETF(IAU) Entry price: 113.38 Exit: 112.39 Loss: $.99
Silver: ETF(SLV) Entry price: 18.14 Close: 17.91 Stop: 17.76
Choices: Exit on open tomorrow. An alternative would be to stay long silver and use the old stop of 17.76.

Open positions:

Cotton ETF(BAL) Entry Price: 36.75 Stop: 34.55 Last: 35.58
British Pound ETF:FXB Entry Price: 160.88 Stop: 157.31 Last: 161.17




Cotton CTH10 Entry Price: 74.00 Stop: 70.80 Last: 72.91
British Pound BPH10 Entry Price: 161.06 Stop: 157.94 Last: 161.82

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

The beginning of the BLOG's second week!

There is a lot to cover today. I would ask all of you to post comments or to email me if you
1) need clarifation on something, or
2) need more information

New signals for today:
1) Buy Cotton (ETF:BAL future:CTH10) Historical record: 40/52= 77%
2) Buy the British Pound (ETF:FXB future:BPH10) Historical record: 76/97= 78%

Comments: Cotton has been recommended for a long time by my hero of the investment world, Jimmy Rogers. Why? The Global Economy is expanding every day. China and India are growing by leaps and bounds, and it just makes sense that cotton would rise in price as more and more people buy clothing.

However, buying the British pound is rather scary to me. After all, Britain's economy has not been all that great. Buying the British Pound would be betting that the English might do better than we here in the US. In any event, the signal was generated by my programs, not by fundamental information. Note also that we are currently long both gold and silver. The British Pound is positively correlated to Gold and Silver, therefore, going long the Pound may present one with contagion risk.

Existing Positions for Computer Generated Signals:

Gold: ETF(IAU) Entry price: 113.38 Close: 112.99 Stop: 112.39
Silver: ETF(SLV) Entry price: 18.14 Close: 18.15 Stop: 17.76

Gold: GCG10 Entry Price: 1139.00 Close: 1149.90 Stop: 1143.80
Silver: SIH10 Entry Price: 18.565 Close: 18.55 Stop: 18.16


Good luck to all!

Any views expressed herein are provided for information purposes only and should not be construed in any way as an offer, an endorsement, or inducement to invest.

Gold and Silver

Most of the countries of the world are involved in deficit-spending in order to stimulate their economies out of recession. Many investors have come to believe that the majority of the world's currencies are losing intrinsic value. India recently took a negative position with regard to the US dollar, and bought a very large quantity of gold. Investing in gold and silver is really a flight to alternative "currency." Some say that these metals have peaked and will go no further, but others claim that this is just the beginning of a long-term bull market in these metals.

First Signals for the Blog

Today, 2 new signals were generated by my programs, one to go long gold, and the other to go long silver. Normally, these results would be posted one day in arrears; however, since this is Friday, these entry points are for Monday.

The gold signal had an historical winning ratio of 23/25 or 92%. The average time in the market was 30 market days. There are a plethora of ETFs; IAU is one. The front month futures contract is GCG10.

The silver signal had an historical winning ratio of 50/61 or 82%. The average time in the market was 12 days. There are many ETFs; SLV is one. The front month futures contract is SIH10.

That's all for today. I would very much welcome your comments. What are your preferences for ETFs for gold and silver?

We begin

We are excited about sharing my computer-generated signals concerning markets that we follow. We are in the process of preparing daily information that can be shared.