The Madison Letter: Weekly Update

Since inception, our overall timing return is 76.49% versus 44.48% on the S&P 500 for excess return of 32.01%.

We added a buy on iShares Core S&P 500 Index Fund ETF (IVV) and took gains on Tuesday 9/2.

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. We were left with one long position TRF from our original buys before launching with Uncommon Widsom Daily. This column replaces the Morning Matters on Fridays.

madison market timing

Portfolio Update

The S&P 500 has risen since our last update. The Nasdaq Composite rose as well. The portfolio is now 84% invested long, 0% short and 16% in cash, net long 84%. We are now at a value of 929.11% from 918.16% last Tuesday.

It appears for the time being that 2000 on the S&P 500 has become support and 2050 is resistance.

We have added the price target from the Alpha Intelligence 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. We added USO on the buy side last Friday.

Remember these returns are total returns with the average change for all winners and losers is 8.22% per idea. Our batting average of closed winners and losers is 73%. The portfolio is up 929.11% and from inception when it began at 0% in April of 2008. We began 2013 at a value of 478.60% so we had a very nice gain for 2013 ending at 732.40%. So far this year we are up 196.71 points or 26.85%. The performance on the Uncommon Wisdom Daily Portfolio Tracker is a bit higher due to dividends which they add in. We have never added in dividends so our weekly results are understated since 2008.

The Week Ahead

1.Geopolitical and Fiscal Events. Monday sees the Federal Reserve Chicago President Evans speak at 10:00 a.m. EST. Tuesday Federal Reserve Minneapolis President Kocherlakota speak at 1:30 p.m. EST. FOMC Minutes out Wednesday at 2:00 p.m. EST. Thursday sees Federal Reserve Governor Tarullo speak after the close at 8:30 p.m. EST. Friday sees Federal Reserve Cleveland President Mester and San Francisco President Williams speak.

2.Economic Releases. Releases of note this week include the weekly chain store sales, oil/gas numbers, mortgage applications and jobless claims include industrial production, PPI, housing starts, CPI, existing home sales, leading indicators and Philadelphia Fed Survey.

3.Earnings Releases. Notable releases include (in order of day’s reporting with Tuesday first and Friday last JD TSN HD MDT LOW TGT INTU GAP FL SIRO among others companies as we continue Q3 earnings.

Weekly Charts Updated

Each week we highlight charts below of the SP500, Russell 2000, NASDAQ Composite, UUP, EEM, TLT, HYG and LQD. The charts use the 50 day moving average slope indicator. When it is green we like the instrument we are tracking and when it is red we avoid the name/sector/asset class.

U.S. Equity indexes are all in the green. The S&P 500 is above 0 with the NASDAQ Composite. Meanwhile the Russell 2000 just broke above 0.

All charts are created from www.erlangerchartroom.com and if interested in using this indicator in Chart Room please feel free to send us an email by using the Contact Us section from the home page.

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Portfolio Update

The S&P 500 has risen since our last update. The Nasdaq Composite rose as well. The portfolio is now 84% invested long, 0% short and 16% in cash, net long 84%. We are now at a value of 918.16% from 898.55% last Tuesday.

It appears for the time being that 2000 on the S&P 500 has become support and 2050 is resistance.

We have added the price target from the Alpha Intelligence Stock Scorecard into the weekly update. Most stocks are below their price targets thanks to the pullback except four. 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 8.02% per idea. Our batting average of closed winners and losers is 72%. The portfolio is up 918.16% and from inception when it began at 0% in April of 2008. We began 2013 at a value of 478.60% so we had a very nice gain for 2013 ending at 732.40%. So far this year we are up 185.76 points or 25.36%. The performance on the Uncommon Wisdom Daily Portfolio Tracker is a bit higher due to dividends which they add 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.

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The Madison Letter: Weekly Update

We are invested on our overall Market Call. Since inception, our overall timing return is 74.63% versus 42.96% on the S&P 500 for excess return of 31.67%.

Stocks and indexes have settled into a nice uptrend.

There is now one open position, a buy on TRF. We added a buy on iShares Core S&P 500 Index Fund ETF (IVV) and took gains on Tuesday 9/2. 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. We were left with one long position TRF from our original buys before launching with Uncommon Widsom Daily. This column replaces the Morning Matters on Fridays.

madison market timiing

Weekly Charts Updated

Each week we highlight charts below of the SP500, Russell 2000, NASDAQ Composite, UUP, EEM, TLT, HYG and LQD. The charts use the 50 day moving average slope indicator. When it is green we like the instrument we are tracking and when it is red we avoid the name/sector/asset class.

U.S. Equity indexes are mixed now. The S&P 500 is above 0 with the NASDAQ Composite. Meanwhile the Russell 2000 is below 0 still. The U.S. Dollar remains positive and some bond funds are negative. EEM which is emerging markets remains below 0. HYG clicked into the red thirteen weeks ago and is still there. We replaced CFT with LQD and that has moved back to positive. Remember what matters is the slope of the 50 day moving average not the 50 day moving average itself.

All charts are created from www.erlangerchartroom.com and if interested in using this indicator in Chart Room please feel free to send us an email by using the Contact Us section from the home page.

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Portfolio Update

The S&P 500 has risen since our last update. The Nasdaq Composite rose as well. The portfolio is now 75% invested long, 0% short and 25% in cash, net long 75%. We are now at a value of 898.55% from 854.87% last Tuesday.

It appears for the time being that 2000 on the S&P 500 has become support and 2050 is resistance.

We have added the price target from the Alpha Intelligence Stock Scorecard into the weekly update. All stocks are below their price targets thanks to the pullback except two. Celgene is above its price target again and so is Bristol Myers thanks to a great run last week. We will hold Celgene and Bristol Myers until they hit the upper limit or we begin to see technical deterioration. 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 8.02% per idea. Our batting average of closed winners and losers is 70%. The portfolio is up 898.55% and from inception when it began at 0% in April of 2008. We began 2013 at a value of 478.60% so we had a very nice gain for 2013 ending at 732.40%. So far this year we are up 166.15 points or 22.68%. The performance on the Uncommon Wisdom Daily Portfolio Tracker is a bit higher due to dividends which they add in. We have never added in dividends so our weekly results are understated since 2008. In the past week, we have added two new buy ideas to our portfolio.

The Week Ahead

1. Geopolitical and Fiscal Events. Monday sees the Federal Reserve Dallas President Fisher speak on monetary policy as does Federal Reserve Chicago President Evans at 12:40 p.m. EST. Wednesday sees Federal Reserve Minneapolis President Kocherlakota and Federal Reserve Richmond President Lacker speak at 9:15 a.m. EST and 9:30 a.m. EST respectively followed by Federal Reserve Boston President Rosengren at 10:00 a.m. EST. Thursday sees Federal Reserve Chicago President Evans speak for the second time this week at 10:40 a.m. EST. Friday sees Federal Reserve Chairman Yellen speaks on monetary policy.

2.Economic Releases. Releases of note this week include the weekly chain store sales, oil/gas numbers, mortgage applications and jobless claims include construction spending, ISM Manufacturing, factory orders, nonfarm payrolls and unemployment rate along with ADP Payroll and Challenger Gray & Christmas Job Cuts.

3.Earnings Releases. Notable releases include (in order of day’s reporting with Tuesday first and Friday last AIG MRO BABA CVS QCOM TWX DIS AZN BAM MT among others companies as we continue Q3 earnings. See the earnings section.

Options Activity

Index ETF Options Volume

We are going to highlight unusual options activity as well going forward. The third column from the left will highlight such outliers. MDY saw excess put action and heavy volume for a second day. No names saw unusual call action.

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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