TRADING UPDATE
Today was another big day in the stock market, this time spurred by much better than expected earnings from Intel. The S&P500 was up 27 points, or 3%. An interesting counterpoint to that was the 1.1% decline in the US dollar index and the 1.5% selloff in the long bond (US 30-year treasury bond). Although REAP did quite well today, this bodes even better for my long commodity positions (except for natural gas, which is really just waiting to be shot and put out of its misery). The gold and oil did great today, while grains tried to make up their minds with a big intra-day swing, but finally settled on “let’s try higher”. Gas face-planted.
Although commodities saw good action, the effect was attenuated somewhat by the continued rise in the Canadian dollar. My ETFs are denominated in Canadian dollars, and when the Canadian dollar rises, it serves to decrease the value of US-denominated assets – i.e. commodities. So the commodities did go up net, but not as much as they could have without the currency effect. In fact, this is going to be the case most of the time, because the Canadian dollar generally correlates with commodity price movements – especially energy prices.
Ironically, with all of today’s action, none of the four CETF program commodity ETFs traded. The one trade was a REAP signal to sell the Direxion triple-long energy shares ETF (ERX). That last traded exactly a week ago - a buy at $22.24. Today it was going out at $27.77!
| REAP TRADES | Trading Update # 176 | |||||||
| # | Trade | Qty | Stock | Symbol | Price | Grp | ||
| 282 | Sold | 31% | Drxn Energy Bull 3X ETF | ERX | @ | $27.77 | 5 | |
| 282 | Bought | 27% | ProSh UlSht Dow ETF | DXD | @ | $46.17 | 6 | |
| REAP methodology detailed in the blogroll under “My Portfolio” | ||||||||
| Qty % are amount by which shares counts are decreased/increased | ||||||||
The big move of the Canadian dollar in the past couple of sessions has stalled the overall portfolio in Canadian dollar terms, though REAP is again up 4.4% on the year in US dollars, but now only ahead of the S&P500 by 1.1%. The quick drawdown (loss) in the CETF program reached just over 16% at one point, but now has eased back to 12%.1. More rallying by stocks (likely because earnings reports have just started to come out and seem to wanting to surprise to the up side) and weakness in the US dollar and treasuries, should boost commodities for a while as well, so this deficit could be erased quite quickly.
Here are the summary portfolio results as well.
| PORTFOLIO SUMMARY | 15-Jul-09 | ||||
| GAIN | WGT | ||||
| COMMODITY ETFs | 20.9% | ||||
| REAP | 79.1% | ||||
| Total Equity (Cdn) | -32.0% | 100.0% | |||
| ********************************************************************** | |||||
| C-ETF PORTFOLIO | C-ETF | ||||
| (Cdn Dollars) | |||||
| Inception 24 JUN 09 | -12.1% | ||||
| CETF POSITIONS | |||||
| ETF | SYM | LAST | GAIN% | WGT | |
| HBP DJIA Ag Bull+ ETF | HAU | $17.89 | -13.3% | 32.6% | |
| HBP GoldSh Bull+ ETF | HGU | $11.10 | -1.5% | 14.6% | |
| HBP NGas Bull+ ETF | HNU | $4.13 | -19.4% | 19.9% | |
| HBP CrOil Bull+ ETF | HOU | $7.54 | -9.4% | 25.0% | |
| Cash | 7.9% | ||||
| ********************************************************************** | |||||
| REAP PORTFOLIO | S&P500 | S&P500 | SP500 | REAP | vs S&P |
| (US Dollars) | TOT RET | ||||
| REF DATE | START | LAST | % | % | VAR |
| Inception MAR 07 | 1406.2 | 932.7 | -29.3% | -27.1% | 2.2% |
| Re-start OCT 07 | 1526.7 | 932.7 | -38.9% | -27.6% | 11.3% |
| 2009 Year to Date | 903.3 | 932.7 | 3.3% | 4.4% | 1.1% |
| CDN DOLLAR | LAST | INCPT | VAR | Oct-07 | VAR |
| 0.8974 | 0.8547 | -5.0% | 1.0069 | 10.9% | |
| AVERAGE YIELD | 1.33% | ||||
| LEVERAGE (from 2x ETFs) | x | 1.53 | |||
| CURRENCY MIX | 100.0% | ||||
| US Cash | 8.9% | ||||
| US Investments | 77.4% | ||||
| Other (Currency & Country ETFs) | 13.7% | ||||
| MARKET BIAS | NET LONG | 38.7% | |||
| Cash | 8.9% | ||||
| Short | 26.2% | ||||
| Long | 64.9% | ||||
| THEME MIX | 100.0% | ||||
| Agriculture | 4.0% | ||||
| Energy | 11.8% | ||||
| Metals | 10.5% | ||||
| Other Commodity | 1.5% | ||||
| Short Commodity | 2.1% | ||||
| Country ETF | 6.5% | ||||
| Financial | 5.1% | ||||
| Health Care | 0.0% | ||||
| Infrastructure | 2.4% | ||||
| Real Estate | 7.0% | ||||
| Retail | 0.0% | ||||
| Technology | 9.9% | ||||
| Transportation | 1.6% | ||||
| Short Equity | 19.7% | ||||
| Short Bond | 4.4% | ||||
| Currency | 4.6% | ||||
| Cash | 8.9% | ||||
I had a somewhat star-crossed evening. I remembered that I needed to pick up my (repaired) bike at a bike shop in the East end of the city fairly far from where I live. So just before I left, I told Nick, who wanted to come for the ride, ”you know, I’d better check to see if they’re open”. So I called and no-one answered. Then I noticed on the web-page that their store hours were till 8PM on Thursdays, so I figured, I still had an hour and someone still had to be there. So off we went, and then as I was turning into their lot they looked very closed, and I suddenly realized, amidst a flurry of bad words, that today was Wednesday.
So we came home and I took the kids to the Elgin Diner. Nick and Maddie had their usual, as did Thomas. Thomas’ “usual” is a French Canadian thing called “poutine” – french fries covered in melted cheese and gravy. Thomas eats this all the time, cleans his plate in fact. I decided tonight I would try to see the world from Tom’s perspective, so when the waiter turned to me I heard myself saying ”I’ll have the poutine as well”. I figured if Tom can eat this stuff and doesn’t seem any worse for the wear, it can’t be that bad. Well it can, and it is. If you think the picture looks disgusting, try eating some. (You might as well just pack cholesterol implants into your arteries and wave off the defibrillator). After just 3 bites I felt bloated, lethargic, and terminally ill, whereas Thomas remained cheerful and obviously has some kind of natural immunity to it. (It must be God’s way of protecting teenagers from their lack of judgement and an early death.) All I can say is friends don’t give friends poutine – ever.
Vladimir Putin is fortunate to have been born in Russia and not Quebec. Political office in Quebec would just not have been an option open to him – on any level.
So now I’m keen to see if gold, oil, and grains provide enough of a boost to elevate my status from complete idiot to the more promising partial idiot. I think I’ll go check the overnights …
Cheers,
Allocator
a.k.a. George Parkanyi
