Subsidies

WHERE NEXT? (SECTOR ROTATION MODEL CHECKUP)

SECTORS & CYCLES
I've advocated for some time that some of the best ways to deploy capital is to pay attention to where you are in the economic environment (expansion/contraction) and weigh where you think you are in the market cycle (bull/bear).  the Market Sector Model highlights areas that tend to do well during those corresponding periods or phases in the cycle.  Frankly, this approach has been pretty successful over the course of many years of investing.  I like this approach, and it keeps me constantly evaluating my positions and where we are heading.

The question becomes, where are we now.  Personally, I feel as though we are right new the middle of the graphic which would suggest that we've gone through a raging bull market, scaled the walls of worry furiously, and reached IPO nirvana which to me signals a market top.  Bonds have been acting weird and energy stocks have been bought with a vengeance.

THE DETAILS -
(Graphics below from marketscalpel.com)

I found this neat little summary that I didn't ever see before which simply restates the original model above.  In a way, I like this graphic even better as it is cleaner, but doesn't overlay the market (bull/bear) phases though.

This version that draws out sectors in energy, healthcare and consumer goods should be performing well and this seems to correspond pretty well with what we've seen in actual trading in the last 5 to 6 months.

I find that this graphic is even cooler as you can drill down into very specific details of each category.  Here's a breakdown of the Consumer Goods, Healthcare, and Energy.

Consumer Goods - Food & Beverage & Tobacco
Healthcare - Medical Equipment & Supplies and Pharmaceuticals
Energy - Oil & Gas and Coal

Coal has been destroyed in the last year or so due to our Presidential war on coal.  As crazy as it may seem, it may be time to consider coal plays like Peabody (BTU).  It is an ugly chart, but the upside reward might be worth a smallish play.

IS THE PARTY OVER?
No, I don't think we are through and on to the next phase of Utilities and Telecoms, but that doesn't mean that you don't look at them and you don't start preparing.  In fact, we've commented that utilities have simply been the best performer for the year.  Other market participants may be front running this or simply assume that we are indeed farther along in the cycle than I do.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.com/

WORLD CUP OF CHARTS

The US tries to keep hope alive, very much like this market.  Utilities, munis, corporate bonds, and treasuries have all been big winners so far through 6 months.  The SP500 is up around 5% and the Dow is up around 2%.  All in all, not much has happened, but a slow grind higher in the midst of a world ripping itself apart due to our leadership deficit in so many places.  Its a good thing the US soccer team has a great coach and so do we as Janet Yellen stands at the helm, guiding us ever so gently in a ZIRP environment.

Here's just a few charts I look at daily.  Near the end I've highlights stocks I've watched, bought, missed, or feel like there may be opportunities in soon.

XLU - Why not utilities?  Utilities must be signaling that rising interest rates are pretty much a myth and will never happen.

XLU:SPY

IMPORTANT CHARTS
APA - Energy Sector has had an awesome run, is this starting to tire?

ARCP - Looks constructive now.

COP  - Overbought?  Each of those recent peaks in RSI have resulted in short term pullbacks.  Traders may want to exit and buy again on any weakness

EWY - Emerging Markets finally coming back?

FB - A run into earnings.... exit a day or two before they announce?

FCX - Who knows what the cost of production is/was for gold and silver, but as gold hit $1250, the destruction of gold, silver, metals, and miners suddenly stopped.  FCX has had a nice run since hitting $30 with a unexplained pop today taking it above $37.

IXN - This etf has been a long-time powerful winner.  Short term looks a bit overbought.

JBLU - Finally breaking out.  Look at the RSI at the top showing overbought.

JOY
There is some risk here of a reversal and fall to mid 50's.

KMI - Nice run.  Is there still momentum to move higher?

KRE - US Regional banks are certainly nicer than European banks.  It looks like there is room to go 5% higher at least.

SLW - Momentum is here.  The 14 Week MA crossed over the 40 Week.  This is a significant longer term signal suggesting continued upward pricing.

VTR - We need a bounce here.  VTR is extremely tied to longer term bond yields.  The 4% dividend yield is nice.

OTHER ITEMS - FOR CONSIDERATION

AAPL - APPLE - Probably goes to $100.  Probably should wait on this one as risk/reward set up isn't great.

 

 DUK -DUKE ENERGY - Utilities are all the rage.  A possible breakout as the higher-highs and higher lows just keep coming.

GDXJ - JUNIOR GOLD MINERS
Will the evil gold cartels and traders allow gold to continue to rise?  COT report shows large increase in commercial shorts, probably doesn't bode well for gold, unless some geo-political shock comes to light.... we haven't had any of those lately have we?

GILD - GILEAD - Hard to buy here, but this should be a strong earnings report and the rebound has been impressive.

GMT - GATX CORP - Railcar leasing seems simple enough.  

GOOGL - GOOGLE - Same risk / reward trade off as AAPL, however I think GOOGL is better than AAPL.

INTC - INTEL - Strong breakout.  INTC seems to have its swagger back.  Any pullback can be bought.

HAL - HALIBURTON - Energy anyone?  Too late to buy here.

MSFT - MICROSOFT - Remember when we could have bought at $26 on its way to $30.  I think this is a hold and not a buy. 

OXY - OCCIDENTAL PETROLEUM - Wait for a pullback and confirm price action.  This has run a long, long way.

O - REALTY INCOME - The leader in long-term triple net leases.  I like the action here and has a nice dividend.

PPLT - PHYSICAL PLATINUM - Very nice.

SCCO - SOUTHERN COPPER - Nice chart, would have like to buy on the bounce.  Is housing going to slow?

Stocks have run quite a bit.  I like Realty Income, Gilead, and GATX Corp, and possible AAPL with an eye toward earnings.  Otherwise, energy has been unstopple, it just seems hard to buy now.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.com/

WHAT COMES NEXT? (BID & MACRO VIEW)

Without any commentary..... what do you think comes next?

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.com/

THINKING OF BITCOIN? THE DEVIL'S CURRENCY

Just in case you were thinking about buying some bitcoins, perhaps it is the father of lies and temptation who is the source of your wandering thoughts.....

Bitcoin seems to be under attack from governments, hackers, and the corporate-types as Apple un-approved the bitcoin app this week as well.  Could AAPL or GOOG be ready to enter with their own crypto-currency like a Googlecoin?  We all know that corporations and government are tied pretty closely, could a special request have come from .gov to shut down apple user access to bitcoin?  We probably won't know, but it hasn't been a good week for bitcoin as it suffered a flash crash.  I hadn't owned any, but on the crash, I picked up my first .5 BTC just for grins.  I'm still in the money but the screen shot of the Bitstamp Exchange is a little scary.

FYI, Obamacare's enrollment is about to come to an end (unless the deadline is changed) and I'll be back to posting with regularity.  Sorry for the absence, just can't handle the volume and maintain the posts.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.com/