Weekly Portfolio Update

The S&P 500 is lower by -7.05% from -9.29% last wek for the year. The Nasdaq Composite moves back above 4600 and the Dow moves back above 16000 and both are also lower for the year, by -2.11% from -9.90% respectively.

The portfolio is now 58% invested long, 0% short and 42% in cash, net long 58%. We are now at a value of 959.44% from 940.25% through Tuesday’s close. We finished 2014 at a value of 951.10 up 29.86% for that year. Our current value is 959.44% which puts the portfolio up 0.87% for 2015 without dividends which is huge outperformance to stocks.

Below are the year by year results on a cumulative and absolute basis: 

ssi ytd

It appears for now that 1900 from 1850 on the S&P 500 has become support. We are now at 1913.61 which is higher than a week ago. A big test for the week is to see if the S&P 500 can get above 1950 then above 2000 and stay there. If that does not happen and we break 1900, then the risk is 1850 and then 1800.

We have added the price target from the Stock Scorecard into the weekly update. Names above price targets are highlighted in yellow. We will remain with these names as well until technical violations begin.

ETFs recommendations can be found in The Madison Letter. In 2014, this will be updated each Friday with Market Crash Indicators.

Remember these returns are total returns with the average change for all winners and losers is 8.42% per idea. Our batting average of closed winners and losers is 69%. The portfolio is up to a value of 959.44% and from inception when it began at 0% in April of 2008.

The performance on the Uncommon Wisdom Daily Portfolio Tracker was a bit higher due to dividends which they added in. We have never added in dividends so our weekly results are understated since 2008.

The Russell 2000 is now beating the S&P 500 on a daily basis.

Hanger (HGR)

Hanger (HGR) will report earnings after the close. Estimates are for $0.45 versus $$0.62. The stock has been hit hard with the market weakness as it is lower by almost $10. There is some considerable upside for this name.

hgr

SSI Options Activity

We are going to highlight unusual options activity as well going forward. The third column from the left will highlight such outliers. No names saw unusual put action. No names saw excess call action today.  Overall put volume dropped as investors are getting tired the volatility.

                                                       [Image 1]

                     The rows in the options matrix are as follows:

  • Curr Vlm = Current Option Volume for today
  • OpVol20 = 20 day Option Volume average
  • % Delta (sorted descending) = Curr Vlm/ OpVol20 * 100
  • Sym = Symbol
  • 20 HV 100HV 252HV = 20 day, 100 Day and 252 Day Historical Volatility
  • Slope = The slope of the historic vol
  • Delta = Change in slope
  • cOptInt = Call Open Interest
  • pOptInt =Put Open Interest
  • cVolum = Call Volume
  • pVolum = Put Volume

Bob Evans Farms (BOBE)

Bob Evans Farms (BOBE) was doing fine until it blew earnings in early March. Since then, the stock has fallen from $60 to its current level of $45.19 is a low in August at $42.50. So is the stock worth nibbling on now?

bobe

SSI Options Activity

We highlight unusual options activity with unusual volume activity The third column from the left will highlight such outliers. SPDR Gold Shares ETF (GLD) saw call action jump as it moved higher by 0.11% and is up in futures on a weaker China PMI number. Yahoo (YHOO) saw excess put action again as continues to remain weak thanks to its core position in Alibaba (BABA)

                                                      [Image 1]

                     The rows in the options matrix are as follows:

  • Curr Vlm = Current Option Volume for today
  • OpVol20 = 20 day Option Volume average
  • % Delta (sorted descending) = Curr Vlm/ OpVol20 * 100
  • Sym = Symbol
  • 20 HV 100HV 252HV = 20 day, 100 Day and 252 Day Historical Volatility
  • Slope = The slope of the historic vol
  • Delta = Change in slope
  • cOptInt = Call Open Interest
  • pOptInt =Put Open Interest
  • cVolum = Call Volume
  • pVolum = Put Volume

The Week Ahead

1.Geopolitical and Fiscal Events. Tuesday sees Federal Reserve Boston President Rosengren speak and the RBA announces its latest interest rate decision. Wednesday sees the Federal Reserve issue its latest Beige Book Survey. Also, on Wednesday Russian President Putin visits China. The European Central Bank meets and is expected to hold interest rates steady. Thursday sees Japanese Prime Minister Abe visit China. Friday sees Federal Reserve Richmond President Lacker speak as does Federal Reserve Minneapolis President Kocherlakota. Also, on Friday the G20 Finance Ministers and Central Bank Governors meet.

2.Economic Releases. Releases of note this week include the weekly chain store sales, oil/gas numbers, mortgage applications and Chicago PMI, construction spending, ISM manufacturing, factory orders, ADP Payroll, Challenger Gray & Christmas Job Cuts, nonfarm payroll and the unemployment rate.

3.Earnings Releases. Notable releases include DLTR HRB QIHU DCI NAV GIII MDT CPB COO MRVL.

Donaldson Inc. (DCI)

Donaldson Inc. (DCI) will report earnings and estimates are $0.42 versus $0.50 which is substandard growth. Despite the weak growth, the stock price remains cheap due to strong cash flows.

dci

SSI Options Activity

We highlight unusual options activity with unusual volume activity The third column from the left will highlight such outliers.Atmel (ATML) saw call action jump as it moved higher by 1.61%. The SPDDR Consumer Staples Select Sector Fund(XLP) saw excess put action again as it tries to find a bottom.

                                                        [Image 1]

                                                       [Image 2]

                     The rows in the options matrix are as follows:

  • Curr Vlm = Current Option Volume for today
  • OpVol20 = 20 day Option Volume average
  • % Delta (sorted descending) = Curr Vlm/ OpVol20 * 100
  • Sym = Symbol
  • 20 HV 100HV 252HV = 20 day, 100 Day and 252 Day Historical Volatility
  • Slope = The slope of the historic vol
  • Delta = Change in slope
  • cOptInt = Call Open Interest
  • pOptInt =Put Open Interest
  • cVolum = Call Volume
  • pVolum = Put Volume

United Technologies Corp (UTX)

This week we are going to look at great companies whose stock price is lower by -10% or more year to date. We continue with United Technologies (UTX). The stock now has more than $40 upside to its price target. This is one of the better Aerospace & Defense companies and is getting no respect. It goes onto our shopping list.

utx

The Madison Letter: Weekly Update

Since inception, our overall timing return is 70.89% versus 39.89% on the S&P 500 for excess return of 31.00%.

Madison scores on the major indexes are in a range of -6 to -9. Stocks and indexes were hammered in the last week but have recovered some of those losses on Wednesday and Thursday. Specifically, the past two days. On Tuesday morning a series of new buy signals kicked in for our institutional client base.

The range between the buy and sell points is now above average. As an example, the S&P 500 range was 54 points at the low and is now at 316.97 points which is a moon shot over the past week. As volatility rises, this expands so it is interesting that the range has peaked in the past past week. Witness at the October low the range was 169 points. Currently, volatility has rocketed in the last week to twice its level in October.

Also, in tracking the range between the 2 year and 10 year moves to 150 from 143 basis points week over week. Short term rates are on the rise while long term have fallen in the last week. This needs to be watched. There are implications, can you say flat yield curve.

There are now two open positions, a buy on TRF and a buy on USO. We will be launching a new portfolio in September that will hold up to six positions at a time as opposed to random signals. Recent open and closed ideas are now in the second table.

We began to offer a buy and sell strategy via our Madison Market Timing Indicator at the beginning of April of 2007. There are now 24 open and closed winning trades to 8 closed losing trades with our market timing results. This gives us lots of confidence in the upcoming portfolio launch. 

madison market timing