Big reversal moves in gas and gold this week completely turned around the fortunes of the portfolio. Last week it was up just 1.3% after having given up about 2% of earlier gains, and today it’s up 4.9%. There are two trading days left in January, and looks like the lion’s share of those gains will hold. ERTS (and I was a couple of discretionary adjustments) took profits in both the gas and gold shares positions, and the rest is essentially short ETF positions. In fact the portfolio is currently 30% net short on a leverage adjusted basis (all the short positions are 3x leveraged). The worst-case scenario is a big 20+ point S&P500 rally on Monday and/or Tuesday, with gas and gold pulling back at the same time. Something like that could happen; stocks have been in market bull trend since late November, if you don’t want to count a short 40-point dip in early December – pretty much straight up. Markets seem to have grown weary of the news noise coming out of Europe. They have a way of doing that once the news about some major issue is in your face day after day and becomes stale. They react to new unexpected information.
The US portfolio is dragging 3% behind the S&P500 this month because its carrying all the short ETFs, while the Canadian positions are ahead of the S&P/TSX by 3.3%; every single Canadian position is profitable, and most of the gold and gas trading was also concentrated there. ERTS overall is beating the two market indices by 7.3% since inception – that’s over a period of 7 months. The Canadian side is still down .9% in absolute terms because commodities had a rough ride over that period, but still ahead of the index by 5.4%. The US side has done really well, up 14.6% in absolute terms and 11.1% ahead of its index benchmark. Hopefully these results are setting the tone for a good year.
The following trades were all discretionary, designed to capture gains to date. I may come to regret, or I may benefit like I did yesterday, buying back a tranche of HNU at $5.07 that I had sold the day before at $5.75. Today I sold it again at $5.66. After an outburst like this week’s big short-covering rally, there are volatile swings as traders re-position themselves – short covering, re-shorting the rally, buying the key reversal, and otherwise short-term trading for whatever reason. I did a little bit of the latter because I’m comfortable buying the dips here because the initial entry was so well placed. All in all it’s worked out so far.
| TRADING | 27-Jan-12 | UPDATE | 671 | |||||
| # | Trade | Qty | Stock | Symbol | Price | Acct | ||
| 4 | Sold | 2.7% | Potash Corp | POT | @ | $46.73 | 1 | |
| 20 | Sold | 2.1% | HBP Nat Gas 2X ETF | HNU | @ | $5.66 | 4 | |
| 14 | Sold | 2.2% | Drxn Gold Sh 3X ETF | NUGT | @ | $25.95 | 2 | |
| Qty % is the portfolio weighting | ||||||||
| EXTENSION REVERSAL TRADING SYSTEM (ERTS) | ||||
| *********************************************************** | ||||
| 27-Jan-12 | ||||
| S&P500 | 1316.3 | -2.1 | -0.2% | |
| TSX | 12466.5 | 2.2 | 0.0% | |
| *********************************************************** | ||||
| PORTFOLIO STATUS | ||||
| Market | JAN 12 | YTD | Incep | |
| Canadian Dollar | 1.0010 | 2.2% | 2.2% | -3.5% |
| S&P500 | 1316.3 | 4.7% | 4.7% | 3.5% |
| TSX | 12466.5 | 4.3% | 4.3% | -6.3% |
| Weight | ||||
| Portfolio % USD | 34.5% | 1.7% | 1.7% | 14.6% |
| Portfolio % CAD | 65.5% | 7.5% | 7.5% | -0.9% |
| FX | ||||
| PORTFOLIO EQUITY | CAD | 4.9% | 4.9% | 5.1% |
| USD ERTS vs SP500 | USD | -3.0% | -3.0% | 11.1% |
| CAD ERTS vs TSX | CAD | 3.3% | 3.3% | 5.4% |
| ERTS vs SP500/TSX | CAD/USD | 1.1% | 1.1% | 7.3% |
| Inception is 30 Jun 11 | ||||
| *********************************************************** | ||||
| Portfolio Direction | Long | Short | Net | |
| Position | 13.0% | 19.6% | -6.6% | short |
| ETF Leverage-adjusted | 28.1% | 58.7% | -30.6% | short |
| CURRENT POSITIONS | ||||
| STOCK/ETF | SYM | LAST | Profit | WGT |
| CASH | 67.5% | |||
| Drxn Gold Sh 3X ETF | NUGT | $25.97 | 2.15% | 2.2% |
| HBP Nat Gas 2X ETF | HNU | $5.65 | 2.03% | 4.1% |
| HBP Glb Gold 2X ETF | HGU | $13.70 | 1.82% | 6.7% |
| Potash Corp | POT | closed | 0.78% | 0.0% |
| Drxn Real Est 3X ETF | DRN | closed | 0.34% | 0.0% |
| Silver Wheaton | SLW | closed | 0.33% | 0.0% |
| Cenovus Energy | CVE | closed | 0.28% | 0.0% |
| Drxn Energy 3X ETF | ERX | closed | 0.24% | 0.0% |
| Cameco | CCO | closed | 0.23% | 0.0% |
| Teck Corp | TCK.B | closed | 0.19% | 0.0% |
| Drxn Energy 3X Sh ETF | ERY | $10.28 | 0.02% | 2.1% |
| Drxn Gold Sh 3X Sh ETF | DUST | closed | 0.00% | 0.0% |
| Drxn Tech 3x ETF | TYH | closed | 0.00% | 0.0% |
| Claymore BRIC ETF | CBQ | closed | 0.00% | 0.0% |
| Drxn Em Mkt 3x ETF | EDC | closed | 0.00% | 0.0% |
| HBP Glb Gold 2X Sh ETF | HGD | closed | 0.00% | 0.0% |
| Drxn Real Est 3X Sh ETF | DRV | $31.71 | -0.20% | 1.9% |
| EnCana Corp | ECA | closed | -0.36% | 0.0% |
| Drxn Em Mkt 3x Sh ETF | EDZ | $13.85 | -0.79% | 7.8% |
| Drxn Tech 3x Sh ETF | TYP | $12.89 | -0.96% | 7.7% |
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