March 13, 2015 (weekend report)

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THE BULL OR BEAR DAILY REPORT

By: Karl Hormann

 (Mini-Turbo Portfolio)  Live Gains since Jan/2013: +98.32%

***

NOTE: NEW MINI-TURBO PORTFOLIO (SEE BOTTOM OF NEWSLETTER).  RETURNED +70%+ in 2013 & 24% in 2014 

***

BTI Signal:  BULL

 (BTI:  Bull or Bear Trend Indicator Signal)  Gains since Jan/2012: +21.81%

Increased from 50% Long to 100% Long on 3/13 open

(Using QQQ & IWM)

 

March 13thSometimes you look at the situation and we just don’t know what’s going on or what’s going to happen short term. Now seems to be one of those times. We are at a junction point where hedge funds are afraid and want to throw in the towel, but at the same time they are afraid to miss a future rally. So what is an investor to do? Basically nothing, just sit tight.  Let’s review the situation.

 

Yesterday in the midst of all the up and down volatility our Mini-Turbo eeked out a +.23% gain. So again, why should we care? The Dollar seems to be the continued thorn in the side of the market. As the dollar broke back above the 100 level on the dollar index, markets retreated.  But funny how in the last half hour, some of the indexes recouped a good part of their losses.  I keep hearing that many hedge funds and professional investors are heavy in cash or even short this market now. I just can’t see why funds would want to chance shorting equities in a world of unlimited global money printing?  It’s like trying to swim against the tide of the ocean.  Sure you might make a few good strokes, but eventually you will get overwhelmed and the ocean will just drown you.  So we are taking the easy route. Just staying in the lifeboat and letting the tide take us with it instead of fighting the main current of the global currency trend. Keep it simple, don’t fight Central banks. They are at war and money printing is their weapon of choice.

 

Sure everyone is now super focused on the US Dollar. I’m hearing all professionals now calling for the US Dollar to keep rising until the Euro reaches 85. Wow. They all seem very certain of themselves all of a sudden. It’s a guaranteed trade it seems to be.  I’ve seen many hedge funds over the last ten years blow up and lose all their clients’ money because they were certain of a trend or trade. Looking at the chart below we see the US Dollar very stretched to the upside.  Normally the Dollar will return to its 20 day moving average.  Being that it’s so stretched over the level, I expect that the US Dollar will either start to revert back to that 20 day moving average or mark time in this area until that line catches up.  Either way I think this should be bullish for equities because it means this relentless rally in the US Dollar could be stalling out for now.  Once traders realize this they will panic to cover their shorts or jump into long positions once again with the large cash positions they are sitting on. Then it’s off to the races and you will be amazed at how fast the indexes will rise to new highs. It will make your head spin.  And that’s the world of unlimited money printing we live in today.

US Dollar Index

(US Dollar Index Chart)

 

Another victim of the strong dollar is the oil sector. I had a few pics on my list below for oil plays that were undervalued and paid dividends. One was NSLP and the other was Chesapeake Energy. At this point I will just continue to hold them because they are paying us dividends while we wait. But we are to keep these positions to a minimum 2-5% of your portfolios. Eventually oil will rise once again and these companies will thrive. If you have a long term view on the sector and want to be bold I would just recommend holding onto an Oil Service Sector ETF. Just wait for the MACD level to bottom out and cross positive.  While it’s in a negative downtrend let’s just leave it alone and not jump the gun. Some Oil ETF’s are OIH or XLE.  Remember, until this US Dollar finally tops out and starts to weaken all commodity sector plays will be under pressure.  It’s just the nature of the beast. The problem is to avoid companies that might not make it and file bankruptcy before the good times return. This is why ETF’s are best at times like this.  Keep it safe.

 

SIGNAL – Our BTI Signal is currently in a “Bull” condition. Our BTI System allocated funds are now 100% Long. This trade is only for our BTI signal allocated funds. (I allocate 1/4 of my account to trading along with the BTI Signal.) The rest of the portfolio is made up of Long Term Core holdings which we do not sell, like IYM, Berkshire Hathaway (BRK.B), CVY, DVY, IWD, etc.. and our Mini-Turbo Portfolio.   We continue to hold all Long Term CORE positions.

Short Term Trend Oscillator, Today:   1.00 (Indecision Neutral)

3/12: 1.01,     3/11: .96,     3/10: 1.00,      3/9: 1.12,     3/6: 1.17,     3/5: 1.30

(.65 oversold to 1.6 overbought range)

 

Remember, I try to hold off on adding to any Long Term Core positions with cash you may have until the short term trend oscillator reaches under 1.0, bottoms and starts to rise again.  I have seen this indicator bottom at .98 and I have also seen it bottom at extreme selling in the past 15 months near .67.  So it’s up to you where you decide to nibble and add at your Core positions.  But as long as it’s near an oversold area I would not worry since these will be multi-year or decade holdings.  Just watch the short term trend to pick your spot.

 

Check out my many recommendation at the bottom of my report to get ideas on what you could pick from to diversify your portfolio.

http://www.usdebtclock.org/

*We continue to hold our Long Term Core holdings which should account for about 66-70% of your portfolio.*

 

Note:  My portfolio is made up of 70% Core long term positions with dividend paying ETF’s and stocks, Gold/Silver per my sample portfolio & the other 30% to my BTI Trend signal.

The 30% of my portfolio that is dedicated to the BTI signal I trade 50/50 between QQQ & IWM (Russell 2000 etf) so half of my position has less exposure to Apple and more exposure to smaller cap stocks.  IWM will usually appreciate higher during Bull markets that we expect to be continuing like the one at the moment. Depending on the size of your portfolio you can cut down your holdings to less until the funds grow or you continue to contribute to your savings/investment account.

** Any last minute evening Signal changes will be emailed to you by 7:30am the next morning via auto alert update.

 

GOLD/SILVER—  I continue to believe with all the monetary global printing metals and most commodities will resume their bullish move higher all in good time.  I continue to watch and wait patiently with our precious metals holdings.  Just remember to keep your allocation of Gold/Silver and some miners to less than 20% of your portfolio.  We don’t know the future and don’t want to get over invested into any one sector.  In my view Gold is a form of currency that is timeless. If you add to your holdings on a regular basis it is a good savings plan.

 

We continue to hold all our metals (20% maximum of our portfolio) and very small mining positions if you have any.

Oil ETF complex I like: USO, XLE & IEZ.

Shopping list:

SLW  (I continue to hold some shares)

SSRI, GDX, SIL, EXK, IAG,

Keep the total of any of these trades to under 3% of your portfolio value if you do decide to get involved.  See my sample sector allocation section of the web site to see how much you should have total exposure to Gold/Silver and miners.

 

FINAL THOUGHTS— It’s times like now that you appreciate being diversified. Even though markets were in turmoil this Friday, our Gold holdings eeked out a small gain along with our Mini-Turbo Portfolio.  I’m not worried long term about our investments. This is just a normal short term panic wave caused by impatient and scared hedge funds. Like always, once they realize the end of the world is not here due to a high dollar, and more companies announce buy-outs or good news, the Trillions of sideline cash will continue to come trickling in one wave at a time.

 

It’s been a busy weekend for me. Between my daughters school cheerleading, my sons cub scout outings, going upstate to prune my Apple tree’s before the spring melt and work where does the time go.  That’s why I keep saying to everyone, to enjoy the time we have with friends and family as much as you can.  It just goes so fast that you don’t want to look back ten or twenty years from now and say why I didn’t do more fun things.  Sure we all have to work hard. But you also have to take time to enjoy life with family and friends. It’s the little things you will remember later on.

 

For now our investments are doing just fine as long as we stay diversified, have your emergency cash reserve already saved up, have our 10-20% Gold/Silver, don’t use leverage in investing and try to get out of debt.  If you do those things you will sleep much better at night and long term you will be very successful.

I hope you all have a great weekend and I’ll see you back here Monday for our mid-week shorter updates.

Karl Hormann

The Bull or Bear Report

(Newsletters put out every evening before 8:45pm daily.  You will receive email notification once posted. If you did not receive the notification just login to the website.)

 

 

MARKET UPDATE:  

Dow:  Down -145.91  (-.82%) 17,749.31 (BULL)

Transports:  Down -60.56  (-.67%) to 8,945.13

NASDAQ:  Down -21.53 (-.44%) to 4,871.76

S&P 500: Down -12.55  (-.61%) to 2,053.40

Gold:  April Gold Up +6.70 (+.58%) to 1,158.60 (as of 6:00 pm EST.)

Silver:  April 15 Silver Up +.122 (+.79%) to 15.638 (as of 6:00 pm EST)

US Dollar Index:  Up +.727 (+.73%) to 100.550

Crude Oil Futures:  April 15 Oil Down -1.93  (-4.11%) to 45.00/barrel

Decliners beat Advancers (from 8K+ stocks) by: 4,931 decl. to 2,320 adv.

 

Our Recommended Popular Holdings: 

QQQ   Down -.53 (-.50%) to 105.27 as of 4:00 pm (BULL)

IWM   Down -.45 (-.37%) to  122.60 (Russell 2000 etf)

IYM  Down -.94 (-1.12%)  to 82.90 (Good long term Core position. Basic Materials etf)

MOO  Down -.41 (-.76%) to 53.44   (Good Agriculture industry holding)

GDX   Up +.02 (0.01%) to 18.07 (Large Gold mining etf)

SIL   Up +.02 (+.24%) to 8.21  (diversified way to own the Silver miners.)

GLD  Up +.48  (+.43%) to 111.20  (or you can substitute with:  SGOL)

BRK.B:  Berkshire Hathaway’s Class B Shares. [12-15 month target:  $190.00]

July 31st at: $116.21,     Sept. 24th at:  $115.05,     Oct. 9th at:  $111.77   (Book Value: 1.36),      November $114.87,      December 7th at: $116.62,   Feb 5th 2014 at: $108.83,  Mar 5th 2014: $119.02  April 18th $127.18,        May 7th 127.50 ,                June 25th  127.13,           July 15th $128.45,        August 19th $134.90     Sept 16th $138.80           Oct  17th  $137.40,           Nov 13th $146.28,   December 23rd $151.52,  Jan 23rd $149.08,   Feb 17th $149.16

**BRK.B IS A GREAT CORE HOLDING FOR LONG TERM AND FOR PEOPLE WITH LIMITED FUNDS THAT CAN ONLY HOLD A FEW POSITIONS.  BUY ON THE DIPS AND HOLD.  Berkshire is a great buy at a Book Value at under 1.1 to 1.2***

Other good diversified Conglomorates like Berkshire but a bit riskier are: LUK, Y, SEB & APLCY

iShares Russell 1000 Value ETF:  IWD  (pays 2% dividend)

       Oct 17:  $89.25,      Nov 21: $92.37,    Dec 28: $93.74  April 4: $96.43

 

Healthcare ETF’s below. (Great for Core position holdings)

XHS at $75.36 on 4/25/13 (Health Care Services etf. I like more.  Good Core holding)

IYH   at $100.00 on 4/25/13 (Health sector such as J&J, Pfizer, Amgen…, Dividend: 1.42%)

 

(IWD & CVY highly recommended for diversified safer yielding ETF)

CVY  (Guggenheim Multi Asset Dividend ETF)  Very Good.  Dividend yield around 5%.

DVY   (another great dividend earning etf)

IWD  (Russell 1000 Value Fund. Pays 1.9% dividend while giving you exposure to equity inflation)

VYM  (Blue Chip high yielding stocks etf)

XLE   (Energy Sector ETF.  Good on pull back’s for rising energy exposure. Pays +1.68% div.)

 

Extra Suggestions (Undervalued Dividend Payers) :

BGCP:  Target  $9.00  (Real Estate broker play) Dividend 5.38%  (Stop close below $8.44)

EXG:   Target  $12.00 (Global High Income Fund) Dividend  10.22%  (Buy under $11.00 on dips)  we are up +13.68% since 7/15/13.

HMC  (Honda Motorsport):  Long, Target: $47.00; (Stay out under $31.05)  Pays 0.00% dividend

CHK (Chesapeake Energy): Target: $23.00  (stop: Stay out below $15.98)  Pays 2.54% Dividend)

NYMT (NY Mortgage):  Buy near $7.58,  Target: $11.40,  **13.71% Dividend Yield** (I will advise if this is removed from my list)

TGP (Teekay LNG Partners): Hold, $35.95, 7.79% dividend. (I will advise of changes)

NSLP (New Source Energy Partners): Hold, 12.48% dividend, (Fair value: $10.22) now at $6.41

NRF (NorthStar Realty):  Target: $23.10  (pays 8.82% dividend). Rental properties in Tri-state area, along with high end hotels and a portfolio of rental backed mortgages.

 

Little Riskier Bank/brokerage plays below

KKR:  Target: $34.00,   Dividend: 6.91% (Stop: stay out below $22.05)

BX:  The BlackStone Group,  Target: $49.50 , (Stop: stay out below  $29.50)

 

HIGHER RISK MINERS & OIL PICS

Sandridge Per.Trust (PER):  Target: $10.00,  dividend suspended. (Speculative hold.)

 

Abbott Laboratories (ABT):  Target:  $45.04,  Dividend 1% only.  Recommended at $33.79.

Current price: 45.68 on 11/25/13  (Stop: Close position if below $40.90)

 

MSB, BGCP, TAL (high debt but stable shipping transport business) riskier,

* FDL (First Trust Morningstar Dividend Leaders Index ETF) yields 3.5% from Blue Chip large caps.  Good to buy AFTER major market corrections.  Very conservative income generator.

 

IMPORTANT NEWSLETTERS BELOW FOR QUICK REFERENCE 

July 20th 2012: Real Estate Special Discussion Edition

Nov 19th 12012: How to insure your portfolio

Nov 6th 2012: How to make $200K per year

 

*****TURBO MINI PORTFOLIO STRATEGY*****

See our new mini portfolio below called TURBO MINI STRATEGY.  It’s a purely mechanical computer generated investment model that picks superb S&P companies that have positive cash flow, positive earnings, accumulating interest and are leaders in the S&P for growth. This is a bit more of an aggressive portfolio, but if you have a large investment account then it could be a great way to supercharge a portion of those funds.  Last year in 2013 it only made about 6 trades and currently holds the 5 stocks listed below.  I will list the changes as they occur in 2014. Of course past performance is no guarantee of future results, but if the Fed will continue to print to infinity or face collapse, you can guarantee these monster growers will continue to accumulate the worlds growing cash supply and cause their stock to rise further.  And if one company fails to perform or falls off of its many growth criteria, that particular holding gets cut and replaced with another up and coming company.  I’m very excited about this new addition to our Bull or Bear Report.  Good luck, stay diversified and invest safely.

Compounded Rate of Return since Jan 2009:  +45.61%

Maximum Drawdown since Jan 2009:  -11.15%  (very safe)

The system will go to cash in bearish markets preserving capital.

Live trading since Jan 2013.

I will update these as changes need to be made. I will make a note at top of newsletters to changes to TURBO MINI PORTFOLIO.

TURBO Mini Portfolio G/L for today 3/13/15:   +.23%

Portfolio Gains from 1/1/13- 3/13/15:   +98.32%  (live trades)

AZO: Autozone,  Long 11/12/13  @ $448.27:   +46.04%

BLK: Blackrock Inc., Long 11/13/14 @ $350.32:  +4.94%

BIIB: Biogen Idec,     Long 1/8/15 @ $359.42:  +14.97%  

REGN: Regen Pharm.,  Long 1/22/15 @ $419.08:  +2.46%

GOOGL:  Google Class A, Long 2/13/15 @ 547.65:  +.98%

(Portfolio Graph I will post each weekend.)

ScreenHunter_727 Mar. 14 14.29

 

HISTORICAL TRADES BELOW for 2014+

2/13: Bought (GOOGL) on open @$547.65

1/22: Bought (REGN) on open @$419.08

1/15: Sold (UNP) at EOD @ $110.80 (below our trailing profit stop)

1/8:  Buy (BIIB) on open @359.42

1/5/14: Trailing Stop Hit (AAPL) @108.00

11/13/14: Bought (BLK) on open (9:30am) @ $350.32

10/13/14: Sold (ACT) on open (9:30am) @ $224.38

10/9/14: Sold BX on open (9:30am) @ $29.95

9/2/14: Buy ACT on open (9:30 am)  @227.07

7/17/14:  Sell to Close GWW (Grainger) at (9:30 am open price) @$242.25

6/27/14: Buy Long BX (Blackstone Group) at (9:31 am open price)

6/27/14: Sell Entire PCP on open (9;30 am) sold @ $251.34

6/6/14: Buy PCP on open (9:30 am) $270.08

6/6/14: Buy GWW on open (9:30 am) $265.45

4/23/14: Covered Short GDP on close (4pm)  26.44

4/16/14: SHORT GDP on open 4/16 (9:30 am) 24.85 Open.

4/16/14: SELL WYNN at open 4/16 (9;30 open) to close position.

*****

4/9/14: COVER OFIX at open 4/10 (9:30 open) to close.

4/7/14:  SHORT OFIX at open  4/7  (9:30 am open) to open

4/7/14: SELL GOOGLE at open 4/7 (9:30am open) to close.

3/25/14: Replaced Priceline with (UNP) Union Pacific at 9:30am open price

3/24/14:  REPLACED NETFLIX with  (WYNN) Wynn Resorts Ltd. at 9:30am open price