Last week, we made some changes to the DG ETF and Fidelity Sector Fund portfolios. We sold two ETF's and two Fidelity Select Funds. We will hold the proceeds in cash for now.
Here are the sells from last week;
DG ETF Portfolio
New Sells:
USO: U.S. Oil Fund@ $37.72/ Paid $33.27
PGJ: PS Golden Dragon China Fund@ $23.40/ Cost $21.31
Fidelity Sector Fund Portfolio
New Sells:
FSCHX: Chemicals- Cost $69.60
FSCPX: Consumer Discretionary- Cost $17.57
We have been closely monitoring the warning signs for a topping market. This being said, there are many out there.
First, the Investors’ Intelligence figures released yesterday showed that the number of bulls rose from 47.2% to 49.2% and bears falling to 21.3% from 25.8%.
Corporate Insider selling for July came close to hitting a new high of sellers to buyers.
Some market gurus are calling for a a business-led recovery, but if the consumers don't join in (70% of GDP), we may see the economy fall into a double-dip recession.
The consumer, many of whom are jobless or make enough just to make ends meet, can no longer get excessive amounts of credit to fuel their spending habits. Since the consumer is 70% of the economy, there is no way corporate profits will return to 2004-2007 levels anytime soon.
The VIX index is once again approaching euphoric levels while the CBOE Equity Put/Call ratio is at lowest its lowest level for the year.
Here are our Top 10 ETF's for the week of August 17th:
1) DBA: Powershares DB Agriculture Fund
2) IGF: iShares S&P Global Infrastructure Index Fund
3) DBE: PowerShares DB Energy
4) IYW: iShares DJ US Technology Sector Index Fund
5) IYF: iShares Dow Jones US Financial Sector
6) DDM: Ultra Dow 30 Proshares ETF
7) EWZ: Brazil Index
8) CASH
9) CASH
10) CASH
Here are our Top 10 Fidelity Sector Funds for August 2009
1) FSPTX: Technology Portfolio
2) FSRBX: Banking
3) FSCGX: Industrial Equipment
4) FCYIX: Industrials
5) FSENX: Energy
6) FSCSX: Computers & Software
7) FNARX: Natural Resources
8) CASH
9) CASH
10) CASH
For the Week:
On Friday, the Dow fell as much as 165 points before closing down 76.79 at 9321.40. The S&P 500 was down 8.64 points, and the Nasdaq closed down 23.83.
The stock market sold off aggressively Friday, but managed to recovered over half of its losses by the close.
The selling got aggressive when investors realized that the feds were going to close-down Alabama lender Colonial BancGroup.
On Tuesday, General Motors said that its Chevy Volt averaged 230 miles per gallon in city driving, based on the EPA’s latest ratings.
On Thursday, the Commerce Department reported that retail sales fell by 0.1% in July after many economists had predicted a 0.7% rise.
On Friday, the Reuters/University of Michigan consumer sentiment index was released, showing an unexpected decline in August to 63.2 from 66 in July. This was the lowest reading since March.
The Fed kept the benchmark short-term interest rate near zero, and said rates would likely stay there for a while longer to guide the way to recovery. The fed went on to say it will slowly phase out a program to buy $300 billion in longer-term Treasuries by the end of October.
-Gold
-The U.S. Dollar
Our current asset allocation is as follows;
85% Equities: (Normally 95%) Aggressive
72% Equities: (Normally 80%) Moderately Aggressive
56% Equities: (Normally 60%) Moderate
36% Equities: (Normally 40%) Moderately Conservative
18% Equities: (Normally 20%) Conservative
