TRADING UPDATE
The stock market finally decided to make a move, and it was a big one – down. The S&P500 closed on its low tick for the day at 893.04, down 28.19 points for a 3.06% loss. This after it had paused for a couple of days on the way down from 953. I was fortunate to have added some short ETFs over the last two weeks, based on nothing much more than an observation that previous bear market rally peaks tended to occur at volume lows (and that was happening as the market stalled at 950), and my simpleton view that the recession wouldn’t be ending any time soon. I stayed within the parameters of REAP and just weighted a bit more to the short side to hedge. That part has worked well enough so far (I could have just as easily been reamed by another up-leg going the other way).
After the initial sell-off from the rally peak, the sudden severity of today’s decline was interesting. It looked like people were ready to snatch their money off the table. My take on the psychology of it is that the longs (most of the world) have been hugely relieved to see their equity recover in the recent rally, and with the fright they got when the S&P500 dipped under 700 would most definitely not want to experience that thrill again.
Increasing the short hedges is only as good as being able to actually take advantage of them, and that finally began to happen today. The volatility triggered two REAP trades, with double-short ETFs taking the sell side for the first time since the March low. So at least now if the market rallies, I can say I was right – kind of.
| REAP TRADES | Trading Update # 165 | |||||||
| # | Trade | Qty | Stock | Symbol | Price | Grp | ||
| 277 | Sold | 30% | ProSh UlSht Dow ETF | DXD | @ | $49.20 | 6 | |
| 277 | Bought | 100% | Claym Gl Solar ETF | TAN | @ | $9.20 | 5 | |
| 278 | Sold | 31% | ProSh UlSht SP500 ETF | SDS | @ | $58.55 | 2 | |
| 278 | Bought | 162% | ProSh Ult Silver ETF | AGQ | @ | $41.37 | 1 | |
| REAP methodology detailed in the blogroll under “My Portfolio” | ||||||||
| Qty % are amount by which shares counts are decreased/increased | ||||||||
These trades re-establish the position in the Claymore Global Solar Companies ETF (not exactly a defensive stalwart, but OK), and add a big chunk of silver back to the portfolio. Although I’m wary of the double long and short ETFs, I decided to keep the silver one going for now.
The portfolio equity has held up not too badly in Canadian dollar terms, down at the close still only by 2.0% on the year and gaining a little on the S&P500 at 4.0% ahead. The commodity positions have been hit pretty hard, but the matching fall in the Canadian dollar has mostly offset that. Here are the stats as of today’s close.
| PORTFOLIO SUMMARY | 22-Jun-09 | ||||
| (in $C, adjusted for $US exchange rates) | |||||
| PORTFOLIO | S&P500 | S&P500 | SP500 $C | REAP | vs S&P |
| Tot Retrn | |||||
| Reference Date | Start | Last | % | % | Var. |
| Inception MAR 07 | 1406.2 | 893.0 | -33.6% | -28.8% | 4.8% |
| Re-start OCT 07 | 1526.7 | 893.0 | -24.6% | -16.6% | 8.1% |
| 2009 Year to Date | 903.3 | 893.0 | -6.0% | -2.0% | 4.0% |
| Discretionary Trading P&L (included in above results) | -5.7% | ||||
| Canadian dollar | Last | Inceptn | Var. | Restart | Var. |
| 0.8668 | 0.8547 | -1.4% | 1.0069 | 13.9% | |
| Dividend Yield (current) | 1.73% | ||||
| Intrinsic leverage (from 2x ETFs) | x | 1.49 | |||
| Currency Mix | 100.0% | ||||
| Canadian Investments/Cash | 22.3% | ||||
| US Investments | 69.5% | ||||
| Other (Currency & Country ETFs) | 8.2% | ||||
| Market Bias | Net Long | 40.8% | |||
| Cash | 10.6% | ||||
| Short | 24.3% | ||||
| Long | 65.1% | ||||
| Theme Mix | 100.0% | ||||
| Agriculture | 9.3% | ||||
| Energy | 14.4% | ||||
| Metals | 9.9% | ||||
| Other Commodity | 1.5% | ||||
| Short Commodity | 2.3% | ||||
| Country ETF | 4.7% | ||||
| Financial | 6.4% | ||||
| Health Care | 0.0% | ||||
| Infrastructure | 1.8% | ||||
| Real Estate | 3.6% | ||||
| Retail | 0.0% | ||||
| Technology | 8.9% | ||||
| Transportation | 1.1% | ||||
| Short Equity | 18.5% | ||||
| Short Bond | 3.5% | ||||
| Currency | 3.5% | ||||
| Cash | 10.6% | ||||
| Portfolio Notes | |||||
| Inception date is when I started tracking portfolio performance in | |||||
| this blog. I track it to reflect total performance after initial mistakes | |||||
| and discretionary trading losses. A more accurate representation | |||||
| of REAP’s “pure” performance is as of 10 Oct 07, when I | |||||
| re-established it after selling out the portfolio twice due to | |||||
| sub-prime systemic concerns. | |||||
| *** S&P Comparison is total return to reflect dividend re-investment | |||||
| REAP GROUPS | Canadian Securities | U.S. Securities | |||
| Stock | Sym | Last | Gain % | Weight | Yld |
| Group #1 – US | |||||
| ProSh Ultra Silver ETF | AGQ | $41.51 | -1.10% | 4.0% | 0.00% |
| British Petroleum | BP | $46.85 | 0.44% | 2.3% | 7.15% |
| Buff Wld Wings | BWLD | $33.45 | 0.00% | 0.0% | 0.00% |
| iSh Australia ETF | EWA | $16.11 | 0.00% | 0.0% | 0.00% |
| Garmin | GRMN | $21.78 | -0.87% | 0.7% | 3.42% |
| iPth Coffee ETF | JO | $35.93 | -2.06% | 1.3% | 0.00% |
| Group #2 – US | |||||
| FTSE/Xinhua China ETF | FXI | $36.08 | 5.09% | 2.4% | 1.21% |
| Genesee & Wyoming | GWR | $25.07 | 3.09% | 1.1% | 0.00% |
| Nvidia | NVDA | $10.55 | 21.99% | 4.0% | 0.00% |
| UBS Ag Platinum ETF | PTM | $13.90 | -0.84% | 2.4% | 0.00% |
| ProSh UlSht SP500 ETF | SDS | $58.73 | 1.59% | 5.2% | 1.00% |
| ProSh Ult Cr Oil ETF | UCO | $12.00 | 38.13% | 2.0% | 0.00% |
| Group #3 – US | |||||
| Clay Gl Lumber ETF | CUT | $12.71 | 0.00% | 0.0% | 0.00% |
| iSh Singapore ETF | EWS | $8.69 | 0.00% | 0.0% | 0.00% |
| Formfactor | FORM | $18.01 | 0.00% | 0.0% | 0.00% |
| ProSh UlSht Rus2000 ETF | SKK | $37.60 | 11.90% | 1.5% | 2.53% |
| Sun Hydraulics | SNHY | $15.98 | -2.51% | 1.8% | 1.96% |
| ProSh USht Bonds ETF | TBT | $53.28 | 36.30% | 3.5% | 1.69% |
| Group #4 – US | |||||
| iPth Copper ETF | JJC | $29.60 | 0.00% | 0.0% | 0.00% |
| Nokia | NOK | $14.08 | -7.58% | 2.5% | 3.90% |
| ProSh UlSht QQQ ETF | QID | $34.58 | -13.55% | 4.1% | 2.02% |
| ProSh Ult RlEst ETF | URE | $3.22 | -5.73% | 3.6% | 7.36% |
| ProSh Ult JpYen ETF | YCL | $24.96 | -4.05% | 1.8% | 0.00% |
| ProSh UlSht Silver ETF | ZSL | $9.22 | 7.87% | 2.3% | 0.00% |
| Group #5 – US | |||||
| iPth Cotton ETF | BAL | $28.73 | -11.19% | 1.5% | 0.00% |
| CME Group | CME | $303.48 | 31.25% | 2.4% | 1.99% |
| iSh Brazil ETF | EWZ | $49.93 | 0.00% | 0.0% | 0.00% |
| Merck | MRK | $25.18 | 0.00% | 0.0% | 0.00% |
| Claym Gl Solar ETF | TAN | $9.05 | -2.02% | 2.2% | 0.00% |
| MkVec Gold Mng ETF | GDX | $35.74 | -6.64% | 1.9% | 0.03% |
| Group #6 – US | |||||
| Broadcom | BRCM | $24.63 | 0.00% | 0.0% | 0.00% |
| ProSh UlSht Dow ETF | DXD | $49.63 | -13.84% | 5.2% | 0.96% |
| iSh Hong Kong ETF | EWH | $13.27 | 5.86% | 2.3% | 5.86% |
| iPth Sugar ETF | SGG | $49.10 | -2.73% | 1.7% | 0.00% |
| ProSh Ult Euro ETF | ULE | $28.56 | 1.02% | 1.8% | 0.00% |
| ProSh Ult Financl ETF | UYG | $3.58 | -4.28% | 1.6% | 1.89% |
| Group #7 – CDN | |||||
| Bank of Montreal | BMO | $46.01 | 10.24% | 1.5% | 6.71% |
| HBP GoldSh Bull+ ETF | HGU | $10.31 | -3.76% | 1.6% | 0.00% |
| HBP NGas Bull+ ETF | HNU | $6.33 | -53.44% | 2.6% | 0.00% |
| Nthld Pwr Inc Fund | NPI.UN | $9.48 | -5.48% | 1.2% | 11.17% |
| Potash Corp Sask | POT | $100.75 | -10.58% | 2.8% | 0.36% |
| HBP SP500 Bear+ ETF | HSD | $25.55 | 10.94% | 1.3% | 0.00% |
| Group #8 – CDN | |||||
| Arc Energy Trust | AET.UN | $16.68 | 2.84% | 1.3% | 11.03% |
| CAE Inc. | CAE | $6.72 | -5.82% | 1.7% | 1.68% |
| HBP TSX60 Bear+ ETF | HXD | $18.66 | 8.44% | 1.2% | 0.00% |
| HBP DJIA Ag Bull+ ETF | HAU | $21.02 | -8.50% | 3.5% | 0.00% |
| HBP CrOil Bull+ ETF | HOU | $9.00 | 29.38% | 2.7% | 0.00% |
| IGM Financial | IGM | $38.69 | 7.70% | 1.0% | 5.70% |
I spent the whole evening researching airfares and vacation rentals for our upcoming trip to Hawaii. My brother-in-law Eric has arranged a house in Kauai for one of our big family get-togethers, which will be great fun judging by our past gatherings. But since the airfare is rather hefty to get out there for the 5 of us, we’re bolting on another week and planning to spend it at the other end of the Hawaiian islands on the Big Island - amongst the volcanoes, observatories, and tide pools. So I think its going to be Ottawa to Lihue (Kauai) to Hilo (Big Island) to Ottawa. There are some truly beautiful places to stay on the Big Island, and we’re having trouble choosing (right now they are available and pretty reasonably priced.) All this assuming I don’t vaporize my equity in the markets before then.
Mahalo
Allocator
a.k.a George Parkanyi
