Following October’s opening day rally that triggered our Seasonal MACD Buy Signal, some profit taking has created a minor pullback. The Dow is off 0.8%, S&P 500 and NASDAQ 0.3%. This weakness has provided an opportunity to accumulate all of our recent seasonal ETF recommendations.
The table below details the official entry prices for the Almanac Investor ETF Portfolio as of the close on Monday, October 1, when we issued the Alert. These entry prices also serve as Buy Limits. We have installed Stop Losses at 10% below those prices in the event something unexpectedly negative causes a selloff. We will be monitoring the 50-day moving averages for signs of any breakdown.
Target prices have been set based on historical seasonal performance and our current outlook. Auto Sell prices are 10% above the Targets. Should our generous targets be exceeded we will lock-in profits. If we do feel that conditions have changed we will recommend selling at that time.
The five ETFs we recommended in the September newsletter never reached our buy limits. In light of our current outlook, they are being added to the portfolio at today’s closing prices, which will also serve as Buy Limits.
Disclosure Note: At press time, officers of the Hirsch Organization held positions in DDM, QLD, SSO, UWM, EXB, IAH, HHH, IIH, IYT, UYM, UYG, USD, ROM.
For the record Prudent Bear Fund (BEARX) was closed out of the portfolio on Monday’s close of 5.86 for a minor loss of 1.8% from our June 15, 2006 recommendation at 5.97. BEARX served its purpose as downside protection and the loss during the market’s rally was incredibly paltry.
Caveat Emptor
Though our recent analysis and forecast for market gains of 15-20% over the 3-6 months reflects a solidly bullish stance, we do have some trepidation. While we believe that the heavy selling and pessimism in mid-August represented a capitulation of sorts and a rallying point for the market over the next several months, many of our concerns about housing, the dollar, China, the derivatives market, energy prices, inflation and slowing global growth still remain.
A confluence of events in one or more of these areas could trigger a major market meltdown. We’ll keep on the lookout for any signs of trouble and keep you informed, but we don’t expect anything to materialize over the next couple of quarters.
STANDARD TRADING GUIDELINES! BUY LIMITS ARE GOOD TILL CANCELLED. ALL STOPS EFFECTIVE ONLY WHEN THE STOCK CLOSES BELOW THE STOP PRICE. ALWAYS SELL HALF ON A DOUBLE.
Please Trade Carefully. Jeffrey A. Hirsch, Editor J. Taylor Brown, Director of Research
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