[Printable Version of This Page]

Morning Matters:

Weekly Portfolio Review
by Geoff Garbacz

Since we began our portfolio, it is now up 375.90% from 391.17% while the S&P 500 is down -19.72% through Friday's close. This is cumulative return of all recommendations since April 1, 2008. The average return of all open and closed recommendations is 8.54%. There have been 44 recommendations to date. This equates to turnover of 367% in two years and two months or 170% a year. The portfolio has 33% cash. There are five winners to three losers. The portfolio is 67% invested.

The indexes were lower this past week. Below is a summary of open and closed positions. January was a losing month and February, March and April were winning months. May was the worst May since 1940. Year to date the indexes are down about -4.50%.

Releases of note this week other than the weekly oil/gas numbers and jobless claims include retail sales and Michigan ISM.

The Madison Letter had been invested since Monday, May 17th. Meanwhile, the Erlanger Big Barf Indicator (EBB) remains in negative territory. The S&P 500 moved lower this past week and has held 1050 as well as the Flash Crashlow of 1065 and the February low of 1044. The EBB can only be found in Erlanger Chart Room on a daily and intrday basis.

The Dow Jones Industrial Average is now in a range of 9,500 to 10,000. Meanwhile, the S&P 500 is now between 1050 to 1100. Choppiness scores on the major indexes are in the mid to high 50s having reached exhaustion in the past two weeks.

Macro themes related to the dollar are important in today's environment. If the dollar falls, then the commodity trade will begin to outperform due to the weakness of the dollar. The Up Dollar ETF(UUP)has been in a downtrend since the beginning of March,2009 but has been in a weekly rally since December and may be forming a double top. The UUP closed at $25.77 which is now above the prior high by .23 cents.

Meanwhile, the bond market moved lower for the week as the TLT closed at $97.79. The TLT represents the long end of the yield curve where interest rate moves are the most sensitive. The Choppiness number on the TLT moves to 54 from 37. Remember when the price of treasuries rise yields drop and then the price of treasuries fall when yields rise. High yield bonds moved lower and corporate bonds rose week over week.

The dollar is trading at 91.10 from 92.47 against the yen last week, the Euro is at .84 from .81 and the pound is still at .69. The CRB index finished at 248.94 from 258.55. Brent Crude Oil Futures is at $70.66 from $78.04. Gold moved to $1217.30 from $1230.60.

The S&P 500 is now below its 50 day moving average as is the NASDAQ Composite. The S&P 500 is below its 200 day moving average and the NASDAQ Composite is just below its 200 day moving average with Friday's close. In addition to tracking, the 50 day moving average it is important to follow the Daily Advance/Decline Line for both the NYSE and the NASDAQ. The advance decline remains weak over the last week.

Second a review of breadth on a sector level is crucial to discerning new sector patterns. Below tracks the top 17 sectors. The review looks daily at the top six names on a market capitalization and determines whether they closed in the plus or minus column. We track this over the past ten sessions. Ranks range from 6 (most positive) to 0 (most negative). As an example, the Consumer Services sector tracks MCD, CMCSK, CCU, NWS, DIS and CCL. Scores of 4 or higher are highlighted green. There has been recent weakness in the past two weeks.

Morning Matters Archives