09/24/2012 major rebalancing on Mousetrap

[Timothy Clontz]

Small Portfolio XLF & IAU 16.68%

Position Date Return Days
DECK 6/15/2012 -21.84% 101
CVX 7/5/2012 10.57% 81
RIMM 7/16/2012 -12.97% 70
UEIC 7/30/2012 32.62% 56
QSII 8/6/2012 10.30% 49
SWM 8/23/2012 4.53% 32
FCX 8/27/2012 11.49% 28
DWA 9/4/2012 4.48% 20
DVN 9/7/2012 3.49% 17
NPK 9/21/2012 3.26% 3

S&P Annualized 6.29%
Small Portfolio Annualized 12.64%
Large Portfolio Annualized 16.26%

From: http://market-mousetrap.blogspot.com...n-morning.html
Major rebalancing:
1) Selling – CVX, UEIC, QSII, SWM, FCX, DWA, NPK
2) Keeping – DECK, RIMM, DVN
3) Buying – OKE, SEAC, CAJ, DDAIF, SSD, AF, AM
With the rush of liquidity from Central Banks in Japan, Europe, and the U.S., the industries have basically been turned on their head. No one has ever done a globally orchestrated money printing program of quite this nature before.
It’s impossible to nuance this. I’m looking at fifty-two card pickup on a global scale as large players rush to reposition themselves to take advantage of (or protect themselves from) whatever is coming down the pike.
On the plus side, we have orchestrated liquidity.
On the negative side, we are facing the fiscal cliff.
The fiscal cliff includes tax hikes, so it’s better to rebalance now.
The liquidity includes risks of inflation, with the GOAL of inflation in the housing sector (hence SSD).
The worst sectors on my model include utilities, so that’s bullish.
I’ll check in the morning and rotate the best opening stocks on my sell list into the worst opening stocks on my buy list. With luck, I can do the entire rotation in five minutes.
But I won’t spend more time on it than that. I’ve never had to do this with the model before, and I have little interest in doing it again.
I’m getting tired of these “once in a lifetime” macro events. “Once in a lifetime” is getting routine. Someone needs to give Bernanke a valium before I need one myself.
Night everyone.
Tim

[Timothy Clontz]

Small Portfolio XLF & IAU 16.68%

Position Date Return Days
DECK 6/15/2012 -24.51% 104
RIMM 7/16/2012 -3.45% 73
DVN 9/7/2012 1.36% 20
OKE 9/25/2012 -0.02% 2
SEAC 9/25/2012 -3.92% 2
CAJ 9/25/2012 -4.30% 2
DDAIF 9/25/2012 -5.40% 2
SSD 9/25/2012 -4.66% 2
AF 9/25/2012 -4.88% 2
AM 9/25/2012 13.27% 2

S&P Annualized 4.93%
Small Portfolio Annualized 12.56%
Large Portfolio Annualized 15.70%

From: http://market-mousetrap.blogspot.com...-this-dip.html
All of the position changes were successful the other day. I’ll give a full trade history for the model this weekend. This morning I want to take a quick look forward at the market.
Market breadth is lagging the indexes. Small caps and fundamental selections (i.e. basically most of the stocks in my model) are likely to have difficulty for a while.
The market is losing momentum as well, but this is still an uptrend until it isn’t. We’ve pulled back to short term support, but financials still have strong money-flow (hence XLF on the small portfolio).
On the full model the strongest industries are:
OILGAS
ENTTECH
ELECFGN
SHOE
BUILDING
AUTO
WIRELESS
THRIFT
PUBLISH
RAILROAD

And the weakest industries are:
B2B
BIOTECH
SEMICOND
SOFTWARE
FUNL SVC
DEFENSE
UTILEAST
DIVERSIF
PIPEMLP
DRUGSTOR

The weakness in DEFENSE is a reflection of cutbacks in preparation for the fiscal cliff. While traders can speculate it will not occur, businesses cannot. I’ve been noting the weakness in technology, and we have three technology industries lagging in money-flow: BIOTECH, SEMICOND, and SOFTWARE. This is NOT a new bull market, nor even a young one. But that’s stating the obvious.
What about the OLD bull market? Is it dead?
I don’t think so. Not yet. I’ll confess to being a permabear on a gut level, but BUILDING, AUTO, and RAILROAD are not bearish industries. What is missing here is AIRTRANS. It’s been under pressure lately, and is only mid range on my model. It’s neither a short nor a long, but should trend with the broad market until we have definitive guidance on the fiscal cliff in the US and the willingness of Spain to take a bail-out.
If I were timing (which I’m not, but if I were), I’d buy this dip.
Tim