Volume 18 Monthly Return Comparison Regular Portfolio +2.73% Aggressive Portfolio +2.68% S&P 500 +1.69% Dow Jones Industrial Average -0.13% Nasdaq Composite +2.89% Russell 2000-1.00% March 17, 2019 The Technical Portfolio The Market Environment Our last index analysis showed the Russell 2000 testing its 200-day moving average, a short-term resistance, and a long-term resistance (read the analysis for members here, or the free blog here). The Russell 2000 started last year s drop from the highs because it peaked a month a month before the S&P 500 and other large cap indices. It also bottomed at a significant support level; further evidence the index is leading stocks. The S&P 500 and Dow Jones Industrial Index did not find significant reversal points, but the Nasdaq Composite did. The Russell 2000 and Nasdaq Composite are the two leaders investors should watch for technical signals. The Russell 2000 has always been a leading indicator for investor risk appetite, and a proxy on the U.S. economy. The Nasdaq Composite has a large allocation to technology stocks, and these have been driving the bull market for the last few years. Now, these two indices are diverging away from significant resistance levels. One is showing a bullish breakout, while the other is failing to advance past the resistance level. It is likely that one of these signals is false. Last week, stocks fell as the Russell 2000 failed to clear its 200 day moving average. This hurt stock momentum as there are less stocks above their 50 day and 200 day moving averages. In addition, the MACD, RSI, and MFI indicators are no longer reaching new highs, which is most concerning for the Nasdaq Composite. Sector rotation is also a problem, as the S&P 500 tests its November and October highs. Only technology, utilities, and real estate are above their November highs. The rest of the sectors are still below them, with materials currently testing its November peak. If the S&P 500 and the rest of stocks are going to continue higher, the major sectors need to break past the resistance with the index.
Portfolio (Total Return) AAPL +12.53% AZO +14.68% CSCO 7.02% GLD 7.58% GRMN 15.96% PYPL +2.82% SBUX +9.18% SRCL (AGG) +1.76% XLK +14.32% XSD +17.68% Until we see the follow through with the Russell 2000, S&P 500, and Dow Jones Industrial Average, we are going to expect stocks to remain in a range. Amazingly, if the follow through occurs, then we are potentially looking at the beginning of a new uptrend. It s hard to imagine a new uptrend at this juncture of the economic and market cycle. We are in a stock picker s market, and we need to be extremely selective of the stocks we purchase and continue to hold. We are looking for stocks that have strong uptrends and breakouts. We want our holdings to pause only slightly when the S&P 500 reaches the resistance even, but continues to make new highs through the volatility around them. Stocks like these are hard to find, but we can find candidates using technical analysis. Portfolio Performance & Management When the S&P 500 first reached its resistance at the end of February, we raised cash by selling JPM and LOW. These were the weakest positions we had, and they helped lower risk in our portfolio. Unless the major averages make significant moves past a resistance or a support, I still believe the market will be in a trading range. I am comfortable with the level of cash in our portfolios, as we can wait to deploy into high quality opportunities. Specifically, I am looking for stocks that have been in a range for a few years, but now are starting to breakout. We still have a large position in gold (GLD), but there isn't a real reason to get out of the position. We initially purchased the position as a hedge. The metal had reached a strong support level, and stocks were starting to show weakness. This gave us the perfect opportunity to purchase. Now, the market has recovered, but I think the metal still has room to grow. We will continue to hold this hedge, but if we find good opportunities in stocks, and our cash levels start to dwindle, we will take from GLD. There are two other positions I am concerned about, but have performed really well for us: XSD and AAPL. I am only concerned because I don't really have an exit strategy. All three positions have recovered nicely, but the charts do not present any obvious signals for exit. Our other stock positions are great breakouts, with long-term potential. However, it is difficult to determine if these positions have long-term potential as well. For now, we will continue to hold these positions, and will hope an exit strategy presents itself in the future. Stocks to Watch I am looking for stocks that have large patterns that span multiple years, but are now breaking out. These types of stocks have not participated in the large run-up since 2016, and they were contained during the drop at the end of 2018. They have less of a correlation to the rest of the market, and now is their time to shine. These will be the stocks that bring the S&P 500 back up towards a resistance, and will help control its drop towards a support. With these types of positions we hope to bring our portfolio performance up, while the S&P 500 stays flat. Here are the stocks we are watching: Watchlist (Entry Price) DIS $115.00 ANF $28.84 BAC $30.18 SEE $45.32
Written by Brandon Ross, CMT for BRTechnicals.com March 17, 2019. Disclaimer: 1. Various BR Technicals newsletters (collectively, Newsletters ), are published by BR Technicals, and offered for sale to the general public. 2. The Newsletters are impersonal and do not provide individualized advice or recommendations for any specific subscriber or portfolio. 3. Investing involves substantial risk. Neither the Author, the publisher, nor any of their respective affiliates make any guarantee or other promise as to any results that may be obtained from using the Newsletters. While past performance may be analyzed in the Newsletters, past performance should not be considered indicative of future performance. No reader should make any investment decision without first consulting his or her own personal financial advisor and conducting his or her own research and due diligence, including carefully reviewing the prospectus and other public filings of the issuer. To the maximum extent permitted by law, the Author, the publisher and their respective affiliates disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations in the Newsletters prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses. 4. The Newsletters commentary, analysis, opinions, advice and recommendations represent the personal and subjective views of the Author, and are subject to change at any time without notice. 5. The information provided in the Newsletters is obtained from sources which the Author believes to be reliable. However, the Author has not independently verified or otherwise investigated all such information. Neither the Author, the publisher, nor any of their respective affiliates guarantee the accuracy or completeness of any such information. 6. The Author is not a solicitation or offer to buy or sell any securities. 7. Neither the Author, the publisher, nor any of their respective affiliates is responsible for any errors or omissions in any Newsletter.
Portfolio Return Comparison Regular Aggressive S&P 500 Date Value Change Value Change Value Change 9/22/2017 $100,000.00 $100,000.00 2502.22 10/27/2017 $101,998.19 2.00% $102,127.69 2.13% $2,581.07 3.15% 11/24/2017 $101,899.79-0.10% $102,336.45 0.20% $2,602.42 0.83% 12/29/2017 $104,833.02 2.88% $105,887.26 3.47% $2,673.61 2.74% 2017 Returns 4.83% 5.89% 6.85% 2018 $104,833.02 $105,887.26 $2,673.61 1/26/2018 $111,339.54 6.21% $113,275.76 6.98% $2,872.87 7.45% 2/23/2018 $105,971.24-4.82% $106,740.86-5.77% $2,747.30-4.37% 3/30/2018 $103,876.28-1.98% $104,007.94-2.56% $2,640.87-3.87% 4/27/2018 $105,432.92 1.50% $105,733.30 1.66% $2,669.91 1.10% 5/25/2018 $107,883.66 2.32% $108,217.73 2.35% $2,721.33 1.93% 6/22/2018 $109,663.19 1.65% $109,915.44 1.57% $2,754.88 1.23% 7/20/2018 $110,843.40 1.08% $111,694.64 1.62% $2,801.83 1.70% 8/17/2018 $111,426.28 0.53% $112,635.93 0.84% $2,850.13 1.72% 9/21/2018 $116,352.88 4.42% $117,792.26 4.58% $2,929.67 2.79% 10/19/2018 $109,086.10-6.25% $110,509.07-6.18% $2,767.78-5.53% 11/16/2018 $107,881.56-1.10% $109,174.76-1.21% $2,736.27-1.14% 12/21/2018 $108,814.22 0.86% $110,119.41 0.87% $2,416.58-11.68% 12/31/2018 $106,963.70 2.03% $108,268.61 2.25% $2,506.85-6.24% 1/18/2019 $105,420.99-3.12% $106,668.73-3.13% $2,670.71 10.52% 2/15/2019 $108,777.03 3.18% $110,191.34 3.30% $2,775.60 3.93% 3/15/2019 $111,747.30 2.73% $113,141.38 2.68% $2,822.48 1.69% YTD 4.47% 4.50% 12.59% 1 Year 7.58% 8.78% 6.88% Total Return 11.75% 13.14% 12.80%
Aggressive Portfolio SYMBOL DESCRIPTION QTY PURCHASE PRICE CURRENT PRICE TOTAL VALUE TOTAL GAIN/ LOSS AAPL APPLE INC. $30.00 $165.40 $186.12 $5,583.60 $621.60(12.53 %) AZO AUTOZONE, INC. $8.00 $839.04 $962.23 $7,697.84 $985.52(14.68 %) CSCO CISCO SYSTEMS, INC. $150.00 $49.71 $53.20 $7,980.00 $523.50(7.02 %) GLD SPDR GOLD TRUST $138.00 $116.24 $125.05 $17,256.90 $1,215.78(7.58 %) GRMN GARMIN LTD. $130.00 $71.79 $83.25 $10,822.50 $1,489.80(15.96 %) PYPL PAYPAL HOLDINGS INC $57.00 $97.97 $100.73 $5,741.61 $157.41(2.82 %) SBUX STARBUCKS CORPORATION 98 $64.73 $70.67 $6,925.66 $582.12(9.18 %) SRCL STERICYCLE, INC. 123 $48.51 $49.36 $6,071.28 $105.17(1.76 %) XLK TECHNOLOGY SELECT SECTOR SPDR FUND 103 $63.85 $72.99 $7,517.97 $941.94(14.32 %) XSD SPDR S&P SEMICONDUCTOR ETF 52 $67.89 $79.89 $4,154.28 $624.00(17.68 %) Regular Portfolio SYMBOL DESCRIPTION QTY PURCHASE PRICE CURRENT PRICE TOTAL VALUE TOTAL GAIN/ LOSS AAPL APPLE INC. $30.00 $165.40 $186.12 $5,583.60 $621.60(12.53 %) AZO AUTOZONE, INC. $8.00 $839.04 $962.23 $7,697.84 $985.52(14.68 %) CSCO CISCO SYSTEMS, INC. $150.00 $49.71 $53.20 $7,980.00 $523.50(7.02 %) GLD SPDR GOLD TRUST $138.00 $116.24 $125.05 $17,256.90 $1,215.78(7.58 %) GRMN GARMIN LTD. $130.00 $71.79 $83.25 $10,822.50 $1,489.80(15.96 %) PYPL PAYPAL HOLDINGS INC $57.00 $97.97 $100.73 $5,741.61 $157.41(2.82 %) SBUX STARBUCKS CORPORATION 98 $64.73 $70.67 $6,925.66 $582.12(9.18 %) XLK TECHNOLOGY SELECT SECTOR SPDR FUND 103 $63.85 $72.99 $7,517.97 $941.94(14.32 %) XSD SPDR S&P SEMICONDUCTOR ETF 52 $67.89 $79.89 $4,154.28 $624.00(17.68 %)
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