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.

The S&P 500 is 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.

1

Portfolio Update

The S&P 500 has fallen hard since last week’s update. The Nasdaq Composite fell 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 901.17% from 954.62% last Tuesday.

It appears for the time being that 1950 on the S&P 500 has become support and 2000 is resistance. Support has dropped two levels.

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.

Remember these returns are total returns with the average change for all winners and losers is 7.97% per idea. Our batting average of closed winners and losers is 72%. The portfolio is up 901.17% 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 168.77 points or 23.04%. 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. Wednesday sees the FOMC announce its latest decision Friday sees Federal Reserve Chicago President Evans speak at 10:00 a.m. EST and Federal Reserve Richmond President Lacker at 12:30 p.m. EST.

2.Economic Releases. Releases of note this week include the weekly chain store sales, oil/gas numbers, mortgage applications and industrial production, housing starts, CPI and leading indicators.

3.Earnings Releases. Notable releases include PAY FCEL DRI FDS ORCL FDX NKE CAN PAYX KMX (in order of day’s reporting with Monday first and Friday last 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.

The S&P 500 is above 0 with the NASDAQ Composite. The chart below is 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.

1

Portfolio Update

The S&P 500 has risen since our update last Tuesday. 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 954.62% from 953.44% from last Tuesday.

It appears for the time being that 2050 on the S&P 500 has become support and 2100 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 November, 14th. So far this has yet to work.

Remember these returns are total returns with the average change for all winners and losers is 8.45% per idea. Our batting average of closed winners and losers is 72%. The portfolio is up 954.62% 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 222.22 points or 30.34%. 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 Federal Reserve Atlanta President Lockhart speak at 12:30 p.m. EST.

2.Economic Releases. Releases of note this week include the weekly chain store sales, oil/gas numbers, mortgage applications and jobless claims include retail sales, PPI and Michigan Sentiment.

3.Earnings Releases. Notable releases include HRB MTN AZO NCS COST TOL ADBE LULU (in order of day’s reporting with Monday first and Friday last among others companies as we continue Q3 earnings. See the earnings section.

Monday, December 8

No events of note. Tuesday, December 9

The latest short interest data from the NYSE and NASDAQ is due out after the close.

Wednesday, December 10

No events of note.

Thursday, December 11

November Retail Sales is due out at 8:30 a.m. EST and is expected to improve to 0.7% from 0.4%.

Friday, December 12

November PPI is due out at 8:30 a.m. EST and is expected to fall to -0.2% from -0.1%. At 9:55 a.m. EST, the latest Michigan Sentiment number is due out and expected to rise to 90 from 89.5.

Weekly Charts Updated

Our market timing process from Superstock Trader called the Market Crash Indicators has returned 53.67% since inception while the S&P 500 has gained 38.63%. So if you follow us you are one happy camper. We finished up 13.07% for 2013 and so far this year are up 8.43% versus 12.92% on the S&P 500 (start of 1/6/14).

The goal of this model is very simple. Tell you when to raise cash and tell when to be invested. Simply check each week to see how invested we are.

Last year we added a new component to our process. If we are 100% invested then we own the Ultra S&P 500 Proshares (SSO) which returns 2X the S&P 500, 75% we own the S&P SDRS Unit Trust (SPY), 50% invested S&P Powershares S&P 500 Downside Hedge (PHDG), Cash is Cash and 100% short we own the S&P Ultrashort S&P 500 Proshares (SDS) which returns 2X the downside of the S&P 500.

The ETF timing model has returned 24.93% against the S&P 500 return of 34.71% since we started this process. S&P 500 made 0.93% since the last update. SPY made 0.70% since our last update. The past two weeks we were 75% invested so we owned SPY 

Weekly Portfolio Update

The S&P 500 has risen since our last update on November 18th. 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 953.44% from 929.11% Tuesday, November 18th. There was no update due to travel last Thanksgiving week.

It appears for the time being that 2050 on the S&P 500 has become support and 2100 is resistance.

We have added the price target from the Alpha Intelligence Stock Scorecard into the weekly update. Several names above price targets. 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. Expect to see us close some names soon and then add new names on weakness.

Remember these returns are total returns with the average change for all winners and losers is 8.44% per idea. Our batting average of closed winners and losers is 72%. The portfolio is up 953.44% 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 221.04 points or 30.18%. 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 again lagging the S&P 500 on a daily basis.

Morning Matters: I Think I Can, I Think I Can

October 15th we saw a major low on the S&P 500 of 1820.66 put in before closing at 1862.49. Clearly, on that day someone, maybe the Plunge Protection Team or a huge whale of investor, stepped in and bid futures higher. Stocks have not looked back and the pain trade is higher. Why? Investors have too much cash and shorts sellers have increased bets. Therefore, both groups are struggling to keep up especially with the S&P 500.

The S&P 500 year to date is now up 11.83%. Meanwhile the Russell 2000 which represents small cap stocks is up 1.95%. That is a big divergence and the last time we saw it was 2011 when the S&P 500 closed up 0.00% and the Russell 2000 lost -5.45%. That spread was 5.45% and this spread 9.88%.

We have noted that since November of 2012, we have been in a really nice up cycle moving from 1343.35 to yesterday’s close at 2067.03. Within this up cycle, there have now been nine up and down moves of significance.

The October finished down move was the sharpest decline since we began the current up cycle. The down move was -7.40%. The next closest was -5.76% which happened twice. We have been in a new up cycle for a bit more than a month and the talk of a pullback continues to grow. A week later the question remains, “Should we be concerned?”

In less than a month, we have already moved more than the typical up move, 8.95%. The move is now 10.98%. So the conclusion is the easy money is in and now the challenge of the S&P 500 is to move above the best move seen at the same time last year, 11.59%. A big plus is that the S&P 500 has moved above its 200 and 50 day moving averages.

The red headed step child remains the Russell 2000. It is above the key moving averages noted in the paragraph above. However, it has now put in several closes above its September high of 1183.85. Two weeks ago the Russell 2000 closed at 1186.47. Yesterday it closed at 1186.94. The Russell 2000 has become like the little red engine, “I think I can, I think I can.” A breakout here would unleash the power within. Watch closely for some Thanksgiving magic instead of some turkey and stuffing.

The conclusion is we are more bullish here a week later but the models tell us this move still has the potential to be a head fake though each higher closes lowers that chance.

It should be noted the last two weeks we have noted that the S&P 400 Mid Cap index had yet to take out its September closing high as well, 1442.81. Today it closed at 1453.72.

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