Thursday, July 6, 2017

7/6/17 Can't Find My Way Home-> All Positions Off!

Closing positions in EEM (emerging markets), FXI (China 'A' Shares), EWZ (Brazil), RSX (Russia), and XLE (Energy).  Will do the same with positions in VEIEX (Vanguard Emerging Markets) and VGENX (Vanguard Energy).

Why?  A few of my thoughts:

(a) Since (re)opening all of the above positions on June 12, prices have dipped below my basis points twice and then bounced.  Prices are about to dip below for the third time today.  Being a guy who tries to 'listen' to the markets, that's a pretty strong message.  (It may also be another fake-out decline that launches the next leg, but that's not how I'm leaning.)

(b) The only way I can outperform markets is to keep my accounts near YTD highs.  By selling today, I'll be maintaining balances near those levels.  With the exception of assets in XLE and VGENX, all positions have been closed/ will be closed near their June 12 prints.  On the bright side, I was also able to capitalize on end-of-June dividend payouts in most cases.

(c) I could continue rationalizing today's sales, but the bottom line is my 'gut feel' is signaling a sell.


  1. Interesting. EEM really hasn't done much but consolidate the gains. Seems like more upside is in store but who knows.

  2. As always, I will point out when I'm wrong. Since July 6, markets have remained in a holding pattern, with bears unable to generate any sustained downside action. What now? That's a good question!

    It's never easy. Asia rallied overnight (the Hang Seng by +1.58%, in contrast to a -0.3% decline in Shanghai). On the other hand, European stocks are selling off this morning. Oil is off -1%, and US futures are slightly negative.

    Momentum is a strong force, and betting that a trend continues for longer than seems possible can pay off well. I continue to think a significant decline is around the corner, but I've been wrong so far. My trading plan? Doing nothing for now.

  3. EMES seems to have put in a bottom on July 7, which is a double bottom relative to mid-June. The XES chart confirms this. I've been waiting patiently to add to my oil positions until charts start to indicate that the bottom might be in, and now they might be saying that. Just added more EMES at 8.44 with a mental stop at 8.