FREDAlert!
Volume 6, Issue 2
October 31, 2014
As usual, markets are extremely volatile with big changes when I am traveling. We publish a quick alert for this reason and will cover things more in the Weekly Review for Monday.
First, GLD: We have a published stop at 113 so we would have to sell GLD here. Gold has not worked although we hate to sell it on the last day of the month. An observation – falling gold usually means less inflation, or deflation. View the action in Japan in this light.
Second, Japan: We have liked Japan for a while and continue to do so. We have a position in our Bucket list models, and have advocated using SCJ or JOF to add to Japan. This still looks like a good play to us.
Third, Market: We are close to 203 targets for SPY and think SPY can trade as high as 209 this year, our original forecast. We indicated the market indicators suggested a “change of character” and this is in facto occurring. This type of volatility up and down often is not great, and we are happy with our Low Volatility/high dividend recommendations for now. We would still carry 10% cash and think there will be opportunities. Several popular services are carrying very high levels of cash. If this changes we could certainly see more upside.
Fourth, regarding our stock list published October 15. There is some confusion as to prices and recommendations, due in part to my making a mistake on BUD. We originally published a sale at 111.50, but put 111 as a target in the Midweek Review. FOR TRADERS we would eliminate everything on that list today. AUY, our worse recommendation was not stopped but is down and will be eliminated also. BAC and XOM will remain as favorable stocks in the Sector Review but will be removed as trading positions on the close today.
I think that covers everything, we will check again upon landing.