Got a Nice TAN but not so good for GLD bugs 5/28/13

Last weekend was Race weekend. First the Indy 500, then Coca Cola 600 and June 1^st we will have the Detroit Grand Prix.. As I watch these guys and gals racing at 225 mph, I can’t help wonder what drives them to take the risks that they take? We are all built differently. Some of us are less risk takers than others. The stock market is a place where we have to take risks to make money. It is a gamble as all the technicals in the world will not guarantee what will happen the next day. Still in the long run it keeps you safer than no technicals.

So with that, I visit a few charts I have written about in the past and show you some that turned the right way and one that turned the wrong way. The good news is that with technical analysis, I did not linger in the failed one long.

Let us start with the ETF called TAN. I wrote about it on 5/17 and mentioned I had a position in it. Entry signal was when the minor signal is up along with the major signal also being up. That occurred on 5/13 at $22.00. Well, seeing the futures were up today, it was a good day to download half my position at $26.00. Profit of 18% in two weeks…
I got a nice TAN but it is quite volatile right now, so be careful if you are looking at it just now for entry.

Gold has been on a downswing for a long time. It is truly unfortunate for the gold bugs that refuse to use technical analysis as the ETF GLD has dropped almost 35-40% from its peak in the last several months. I am posting the chart on GLD. I am glad I was able to get an associate of mine out of his Gold position before some of the large drops.

Finally regarding Bond funds… I had an entry position in TLT and was wondering if TLT was perking up. Well that tune changed as you can see from the charts. I took a small loss and exited all my TLT position and have been out of bond funds based on the exit signals. Never know how long these down signals last. Today the bond funds again took a big hit. Best to stay on the sideline. When this tune changes, I will be back in; but not for now…

Time to Get some TAN? 05/17/13

Last week I traveled on business to Wisconsin, then Florida and Detroit before heading back home. I had two prototype runs happening in Florida. The first was considerably tough and is an innovation project I am working on with a major health care equipment manufacturer. After a successful end to the trial and on the way to the next one, I had a very nice dinner quietly by myself. After dinner I wanted a view of the sea. I hit it at a perfect time. The sun was setting. The beach had a few people there, all who came out to see the sunset. When was the last time I took time to see a sunset? Probably never. It was beautiful. The sun slowly dropped below the horizon. There were people sitting on chairs in the sand, enjoying the view. When the sun disappeared, everyone broke out into an impromptu clapping….It was wonderful. 

And what does any of this have to do with trading and investing? Is this the perfect time to get some TAN? TAN is a solar ETF (Exchange Traded Fund) consisting of stocks like FSLR (First Solar). If we look at the chart below, we can see the 50 day exp moving average (red line) slowly coming up to cross the 200 day exp moving average (the black line). That is a good sign. Also I see new higher highs being made after a long decline and consolidation. I purchased a position at the last minor buy signal.

This particular system that I am using has a major (bigger arrow) signal and also a minor (smaller arrow) signal. One safe way to trade it is take only positions when the major signal is up and also there is a minor buy signal. All the signals will not yield positive results; but the overall results are nicely positive if you just take buy signals in the direction of the trend. Time to get a TAN. 

Japan’s Currency War 5/12/13

One of my classmates from IIT was remarking about the high interest rates offered to Indians by their banks. I believe they get between 9 – 10% interest on their savings in Rupees. Question raised was can an ex-pat take his US dollars and convert to Indian currency to make more money than the rate of devaluation the Rupee sees over time against the US dollar? Needless to say, nothing is as simple as it looks, but it made me notice the quiet currency wars that are taking place.

You would hardly notice it on the streets; but there is a raging war going on. It has to do with currency manipulation to increase the health of countries. If China were to do it any further than what they already do, we would all take notice. But when it happens to our closest friend, Japan, we stay quiet and say nothing. Maybe even tacitly agree to the plan in some 5 nation summit. Agree quietly that helping one of the largest economies spur growth is good for the global economy.

What am I talking about? The controlled fall of the Japanese Yen. If you look at my chart on FXY you will see that it has dropped from its exit signal at $124.55 to $96.42 yesterday. That is a 22.5% drop in 7 months!! And don’t tell me that the chart looks like market random behavior! In fact it looks almost like Enron did at one time… Seems like Japan has taken a chapter out of Bernanke’s book.

So when are Japanese goods going to become cheaper and flood our markets? Too bad that the Japanese auto makers have all set up plants to manufacture cars in the US with US wages. Still, all the Japanese imported parts will be cheaper compared to local ones in the US. Japan is a country that thrives on exports. One exception will be its energy imports which just got a lot costlier. Free market we call all this… Hmmmm. 

And how can one profit from such sharp currency depreciation? Look at the chart on EWJ (Japan ETF).. lessons learned... a reverse of the chart from the Yen currency value!!!

401K Monthly Analysis – No Change 5/3/13

No change from last month’s 401K. 

SPY (S&P 500) remains pointed north and has overcome the price divergence against its indicator - the MACD.

When I look at my previous employer's 401K plan, the funds to be in are Vanguard Institutional Index and Vanguard Explorer Admiral and we are seeing Fidelity Div Intl and Real estate perking up as well.

With my current employer’s 401K, the strength goes to WFA SPL Midcap VL, Fidelity Growth Strategies, same as last month.

When is the “Sell in May and go away” going to kick in?

See attached charts... entry signals were back in Nov 2012 and we are still climbing!!!