Monday, December 30, 2013 Zeb’s VUE

General Information and Analysis

Warren Buffet: “The best way to minimized risk is to think.”

It is time to re-evaluate your investment portfolio.  I will make a separate blog entry relating how I think about reviewing (auditing as it may be called) my investments.

US

Comment for 12/26/2013	Measure	Indicator	Ranking
Weekly RSI	WeeklyRSI	72.2	OverBought
Long Term MVA (200 day MVA)	200 MVA	9.59%	Bull
5 Day Slope of 55 day MVA	Slope55MA	0.75%	Bull
Intermediate Trend (Using ADX)	ADX(14)	20.22	Bull
Short Term Trend (Daily RSI 3)	RSI(3)	92.14	OverBought
Relative Volatility (ATR% vs StdDev over last 90 days	ATR(90)	.94%	Normal
VIX - MACD 10/30 (slope down)	MACD	-0.067	Neutral
The USA stockmarket is bullish with technical warning signals that the market is overbought.

Some signs of bearish beliefs entering the market.  This is a good time to set aside beliefs, and stick with your investment plans.  However, if you are holding "long" positions, now is the time to consider taking out insurance  Also, it is time to study your portfolio allocation and liquidate losers.  Yes, it is very tough to liquidate losers, but having worked with Hedge Funds and Venture capitalists for 13 years, I can say with certainty, the difference between them and retail traders is the willingness to cut losses. 

Japan

Bloomberg: Nikkei enjoys best annual performance in 41 years. Japan's Nikkei 225 has closed the day and the year at a fresh six-year high of 16291, representing a rise of 0.7% for the session and 57% for the year. That makes 2013 the index's best annual performance since it jumped 92% in 1972. Japanese stocks have been benefiting from the central bank's massive money printing.  CPI figures are manageable, and analysts pretty much concur that the CPI figures are encouraging.  Retail sales climbed 4% y/y.  Unemployment held steady at 4%. 

Inflation is increasing (but manageable), suggesting that Japan is overcoming deflation that has plagued them for decades.   The most critical statistic is cash wages.  They rose for the first time in five months; albeit only .5%.  We’ll take it folks.   GO JAPAN!!!

Gold:      

 

Gold miners are in for more difficult decisions as they write-down values due to plunge in prices.   The value of gold bullion has dropped (as you know), and Gold mining companies face write-downs due to the drop.  The drop has undermined their economic viability.  Barrick (ABX) and Newcret Mining (NEM) have already taken a massive write down in 2013 of writing.

As you know if you read my materials, Gold and Silver are recommended as a hedge against world-USA-chaos.  They are not yet in a position to be considered having bottomed.  However, seasonal cycles indicated that Gold and Silver could have a considerable rebound in the 1^st quarter.  The rebound could be profitable on a very short investment cycle.   However, and investor would have to be very nimble.  Look for retail investors to plunge in as gold looks like a bottom, and then get burned as they have no reasonable plan how to trade short term. 

 

(Seasonal cycles are explained on Investopedia if interested.)