October 2, 2015 (weekend report) BTI Signal Change

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THE BULL OR BEAR DAILY REPORT

By: Karl Hormann

 (Mini-Turbo Portfolio)  Live Gains since Jan/2013: +100.23%

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

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BTI Signal:  **BULL: Caution**

**BTI SIGNAL CHANGE**

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 (BTI:  Bull or Bear Trend Indicator Signal)  Gains since Jan/2012: +10.12%

We are changing from 100% cash to 50% Long on 10/5 9:30am  open for BTI allocation only.

(Using QQQ & IWM)

 

October 2ndThe time to buy long term is when there is fear and blood in the streets. If you listen to the financial media today they are all skeptical of today’s vicious reversal higher on the extremely disappointing jobs number released. We were expecting 203K jobs, but instead the economy only created 142K jobs. Wow. The futures are now reflecting that there will be no rate hike until March of 2016, with some economics even calling for no raise until 2017. So what does this mean for investing?

 

One hint today was that Gold rocketed higher by +$26.30 or +2.36% while all the miners just exploded higher by double to triple that amount. That’s why I gave you all that list of companies to start adding into earlier in the week, which all went up huge today. But to me Gold was reacting to the weak US Dollar plus it could be telling us that more printing is in the cards to keep the economy afloat. Now is this the start of a new Bull market, or is it just short covering that will plunge back to new lows? Many analysts are all bearish and expect lower prices. The truth is that again, no one knows for sure. You can ask ten different experts and you will get ten different predictions.  I look at the chart for clues.

 

Below we see a chart showing you what percentage of stocks on the (NYSE) New York Stock Exchange Stocks are above their 200 day moving average.  As you can see we hit a low in August of 16% of stocks, and now we have rebounded back over 20% of stocks are above their 200 day moving averages. The last time we hit lows of this magnitude was in the summer of 2011. That turned out to be a great buying opportunity.

 

NYS 200MA

(NYS 200 MA)

 

Another chart I was looking at is the broad Wilshire 5000, to gauge the health of the larger market. This chart is quite bullish in my view. These are the perfect set ups you look for in either a stock or an index. When a stock or index makes a new 52 week low while the MACD makes a higher low at the same time. It’s a bullish divergence and usually leads to the stock making a large move higher. If this indicator stands true, we could see indexes make a large Santa Clause rally, as they say, into the year end. I think traders just became too bearish thinking the end of the world was coming again. Yes commodities were hammered and this was leading to credit fears in commodity companies. But that will not lead to widespread financial contagion and economic collapse. Those are company specific and banks are very protected with hedges and unlimited backing from the Federal Reserve.  So let’s get this collapse scenario out of our minds.

 

Wilshire 5000 Chart

(Wilshire 5000 Index)

 

In my view this is probably the best buying opportunity in decades for the basic materials sectors. Again look at Alcoa, Freeport McMorran, Chesapeake Energy and the list goes on and on.  These stocks are major players that are 80% or more off their highs. Unless these companies are going bankrupt, this is the time to build positions and average into them. Take a look at companies with Yahoo Finance.com. On the left side you will see a button that says “insider transactions”.  If you see insider directors and executives accumulating stock with their own money, I would be a buyer of that stock. They are not buying because they think the company is going bankrupt. But you need to have a multi-year time horizon for these investments, not a two month view like many hedge funds seem to have lately.  Stay diversified, keep building up those core holdings, add to your basic materials portfolio of stocks and sit tight. We will know over the next week if this is the start of a new Bull Run or just a Bear market rally.

 

Our BTI Signal has changed to “BULL:Caution” mode. 

All Core positions Remain unchanged.

We have no changes in our Mini-Turbo Portfolio today.

We are 100% in CASH our Mini-Turbo Portfolio.

 

SIGNAL – Our BTI Signal has changed to “BULL:Caution” mode. Our BTI System allocated funds will change from 100% Cash to 50% Long.  This 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:  .60  (Trending Higher)

10/1: .56,    9/30: .55,     9/29: .53,     9/28: .55,      9/25: .60,     9/24: .63

 (.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 about 40% Core long term positions with dividend paying ETF’s and stocks, Gold/Silver (per my sample portfolio), 25% to my BTI Trend signal and 1/3 allocated to my Mini-Turbo Portfolio.

The 20% or so 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 (10-20% maximum of our portfolio) and very small mining positions if you have any.

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

Shopping list:

SLW  (A buy in the low $19’s with a 10% stop loss.)

SSRI, IAG, KGC, GDX or SIL (GDX would be your safest bet to be diversified)

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—  I wanted to take this section to discuss the state of our nation. I keep hearing from many fear mongers that the system and the economy is on the verge of collapse. You better prepare and get all your money out of the banks. I used to believe that in 2009 but today we understand that Central banks will do anything in their powers to keep the system afloat. If that means printing another $10 Trillion dollars to purchase up their own bonds, so be it. So we have to understand that a banking collapse is not in the cards. But there is a possibility of a massive US Dollar devaluation. That’s where our Gold and some Silver comes in as our “insurance policy”. I look at Gold and Silver as quasi month with an insurance hedge. So if China or a group of other nations decide to really fight against the US Dollar as the global currency, and our currency takes a nose dive. Gold will protect some of our wealth. If you see Gold get back above $1,350/oz. they you know that something bad is going on with the US Dollar.

 

All we can do is get yourself prepared for any situation. Whether it’s a financial depression, where actual underemployment reaches 25%+ like in Europe, or a currency collapse. The only realistic way out of our situation is massive inflation. That will wipe away our debt problems and solve our income stagnation. That’s probably why the government is forcing minimum wage to $15.00/hour. But that will have very negative consequences like many small stores going out of business or massive price increases to pass on these increased overhead costs onto the consumer. They figure if uneducated labor can find work for $15.00/hour, then college educated labor has to make at least double to triple that. At least that’s probably the ideas of the idiotic politicians. They are performing an economic experiment and no one knows how the outcome will be. I think it will not be good.

 

On another topic we have this gun violence situation arise again this week due to the horrible college shooting. I am a legal concealed pistol permit holder for 20 years, NRA member, former Boy Scout, hunter, business owner and father of two kids with a wonderful wife. I believe in the right to bear arms, so everyone has the right to defend themselves and protect their family. Every time we see this mass shooting, Obama or some other politician comes out railing for harsher gun control. Yes this violence should not happen, but we do live in a free country and the 2nd amendment was put there to keep the population armed as insurance against a possible tyrannical future government. Its part of the checks and balances in this free country we live in. The bottom line is we need better family values and respect for life. A bad person will always try to do bad things. I just know that when a home invader comes crashing through your door, the police are 5 minutes away, while you could be dead in 1 minute. I would rather have the option to protect myself as fast as possible instead of being helpless. For politicians to use these tragic events as selling points for their disarm America agenda is pure disgrace.

 

Also, how many terrorists might we be importing from Seria and the middle east out of these 200K refugees that Obama pledged to give asylum to from Europe? I guarantee there are some wolf in sheep’s clothing in the group that are using this situation as a perfect opportunity to sneak into many countries. This would give them an opportunity to create chaos and death to try to destabilize foreign governments. Again I fear the next five years and how all this will end up. How can we solve our mounting national debt approaching 20 Trillion dollars? How are we going to stop the growing underemployment in our country? How are we going to handle the growing global religious war by radical Muslims hell bent on killing everyone else that is not on their side?  It’s a scary time but again, prepare for the worst and hope for the best. All we can do is stay optimistic but don’t be naive that everything will be just fine. Be awake and vigilant to protect your family, wealth and rights of Freedom.

 

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

Best regards

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:  UP +200.36  (+1.23%) 16,472.37 (BULL:Caution)

Transports:  Up +40.94  (+.52%) to 7,873.64

NASDAQ:  Up +80.69 (+1.74%) to 4,707.77

S&P 500: Up +27.54  (+1.43%) to 1,951.36

Gold:  December Gold Up +26.30 (+2.36%) to 1,140.00 (as of 6:00 pm EST.)

Silver:  December Silver Up +.732 (+5.04%) to 15.243 (as of 6:00 pm EST)

US Dollar Index:  Down -.286 (-309%) to 96.040

Crude Oil Futures: October Crude Up +.12 (+.26%) to 45.66/barrel

Advancers beat Decliners (from 8K+ stocks) by: 5,468 adv. to 1,756 decl.

 

Our Recommended Popular Holdings: 

QQQ  Up +1.84 (+1.80%) to 104.06 as of 4:00 pm (BULL:Caution)

IWM   Up +1.91 (+1.75%) to  110.92 (Russell 2000 etf)

IYM   Up +1.62 (+2.48%)  to 66.86 (Good long term Core position. Basic Materials etf)

MOO  Up +.98 (+2.14%) to 46.75   (Good Agriculture industry holding)

GDX   Up +1.07 (+7.98%) to 14.48 (Large Gold mining etf)

SIL   Up +.47 (+7.38%) to 6.84  (diversified way to own the Silver miners.)

GLD  Up +2.28 (+2.14%) to 109.01  (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,             Mar 20th $145.73,           April 23rd 142.45

**BRK.B IS A GREAT CORE HOLDING FOR L7ONG 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***

 

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%)

 

(Buy these ETF’s on DIPS:  IWD, IVW & CVY/DVY 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)  ***MY FAVORITE, if you must own just one***

IVW   (S&P 500 Growth EFT. Yields over 1.42% dividend)  ***2nd Favorite for more growth***

VYM  (Blue Chip high yielding stocks etf)

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

FDL   (First Trust Morningstar Dividend Leaders)  Pay’s $3.78% Dividend Yield. Blue chip stocks. BUY THIS ON EXTREME MARKET CRASHES.

 

Extra Suggestions (Undervalued Dividend Payers) :

BGCP:  Target  $13.85  (Real Estate broker play) Dividend 6.00%  (Stop close below $8.60)

EXG:   Target  $12.00 (Global High Income Fund) Dividend  9.94%  (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: $15.00+,  Dividend Suspended.  Great energy rebound play.

With Carl Ichan upping his stake to 7% in CHK, I think it’s a great buy in the 11’s or lower.

Very weak now due to dividend suspension.

AA (Alcoa): I recommended this in the low $13’s. Target: $15.00+  (insider buying at $13.20)  **Long Term Accumulate for when oil bounces**

 

FCX (Freeport Macmoran): Target $20.00+  Great material play rebound for next 1-3 years.  This stock used to be $40.00/share.  Insiders buying at $10.00/share.

NYMT (NY Mortgage):  Buy near $7.58,  Target: $7.00,  **16.29% Dividend Yield** (I will advise if this is removed from my list)  (Respect stop levels you place)

TGP (Teekay LNG Partners): Hold, $35.95, (Target: $32.39) 9.86% dividend.

NRF (NorthStar Realty):  Target: $23.10  (pays 8.68% dividend). Rental properties in Tri-state area, along with high end hotels and a portfolio of rental backed mortgages. *in downtrend*

 

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. **During the Monday Meltdown (August 24th) this ETF flash crashed from $22 to $12.31 and bounced back to $22.00! Use Limit orders to buy on panic days and take advantage of mispricing***

 

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*****

Check out my 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.

Since 2009 Compounded rate of return was 46.92%/year with Maximum Drawdown of -11.10%.

I will update portfolio as changes occur. A note will be posted at top of newsletters with changes to TURBO MINI PORTFOLIO.

TURBO Mini Portfolio G/L for today 9/11/15:  +.00%

Portfolio Gains from 1/1/13- 9/11/15:   +100.23%  (live trades)

Holding 100% in Cash.

(Portfolio Graph I will post each weekend.)

 

HISTORICAL TRADES BELOW for 2014+

9/2/15:  Sold (NOC) @ $160.95

9/2/15: Sold (AZO) @ $720.87

8/25/15: Sold (GOOGL) @$646.47 (Trailing stop rule triggered)

8/25/15: Sold (HUM) @ $177.67 (Trailing stop rule triggered)

7/27/15: Sold (BIIB) @ $305.40 (Gap down, Stop loss rule triggered)

6/30/15: BUY (HUM) @ 193.94

6/29/15: Sold (BLK) @  $344.55 (Trailing Stop loss triggered)

6/23/15: BUY (NOC) @ 165.70

6/23/15: BUY (BIIB)  @ 419.74

6/22/15: Sold (PCLN) @ $1152.87 (Trailing Stop loss triggered)

6/15/15: Sold (REGN) @ $489.66 (trail Profit stop)

4/13/15: BUY (REGN) at $461.10 open price.

4/10/15: BUY (PCLN) at 9:30am open price.

3/27/15: Sold (REGN) at $449.48  (+7.25% profit)

3/20/15: Sold (BIIB)  at $464.00  (+29% Profit)

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