Dissecting a Losing Trade

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SYNOPSIS
During the past week gains were extended for the major US indexes, and to some extent the S&P/TSX Composite Index. The Canadian small caps took losses once again.

ProfiTrend Portfolio… The annualized growth rate for the ProfiTrend Portfolio is now at +127%… well above the comparable numbers for the S&P/TSX Composite Index (+3%) and the S&P 500 (+37%).

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PTA 2015… Renewal Time, with an Early Bird Special
Our fee structure changes for ProfiTrend Advantage 2.0 Membership in 2015. In spite of ups and downs, we assume that you’ve all had a profitable investment year by incorporating our weekly information and data. We also assume that you’re looking forward to more of the same next year. You know that the relative trend analysis™ (RTA) approach is designed to maximize profits via our unique brand of trend analysis, while reducing potential losses during the down times. Be sure to renew early to lock in your 2014 rate for 2015. We’ve extended the Early Bird Renewal Discount to January 31, and that’s final! See the specifics below.

Topic of the Week… Dissecting a Losing Trade
Generally speaking, when we close out a position, we don’t look back. We not only burn our bridges, we use major explosives to save time! We take our cash and look for new opportunities. Occasionally though, a sudden loss that triggers a sell order just doesn’t seem to make sense, given other data that we’re seeing. It’s as if measuring distance in yards and metres suddenly wasn’t 100% correlated. That’s when we generally make time to figure out what’s going on. We can learn from that, whereas most of the time looking in the rear-view mirror teaches us nothing. We’re going to walk you through one of those odd discrepancies below, and tell you what we’ve learned from our small research exercise.

What a Difference a Country Makes!

FOR YOUR AMUSEMENT
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SYNOPSIS
Last week was practically a mirror image of the week before in terms of one-week changes. The prior week had been one of the worst in years for equities, but last week had major indexes flirting with new highs again.

ProfiTrend Portfolio… The annualized growth rate for the ProfiTrend Portfolio is now at +199%… well above the comparable numbers for the S&P/TSX Composite Index (-3%) and the S&P 500 (+32%).

Seasonality… We don’t have anything to add this week, and will wait until next weekend to expand on the outlook for January and beyond. We’ll just remind you that the final two weeks of December and the first week of January are generally favourable times to be invested in equities. This past week may have just been the beginning of the so-called Santa Claus Rally.
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State Street Investor Confidence Index… You’ll find the latest results for November and the revised data for October. The November reading continues to favour stocks over lower risk assets. While the global index fell slightly, due to declines in the North American and Asian markets, institutional investors jumped right back into more European equities, after reducing their holdings in October. Apparently, they know something that we don’t. The European index is at an all-time high, since the publication of the SSICI indexes began. We’ve updated our chart and you’ll find more detail below. This month’s data will obviously not be out until near the end… December 30.

PTA 2015… Renewal Time, with an Early Bird Special
Our fee structure changes for ProfiTrend Advantage 2.0 Membership in 2015. In spite of ups and downs, we assume that you’ve all had a profitable investment year by incorporating our weekly information and data. We also assume that you’re looking forward to more of the same next year. You know that the relative trend analysis™ (RTA) approach is designed to maximize profits via our unique brand of trend analysis, while reducing potential losses during the down times. Be sure to renew early (before December 31) to lock in your 2014 rate for 2015. See the specifics below.

Topic of the Week… What a Difference a Country Makes!
While we still have about 10 days to year-end, we’ve decided to have a look at how the stock markets of various countries have performed in 2014. We’ve been repeatedly reminding you in recent months of how US stocks have outperformed Canadian stocks, but do you remember what the situation was like in the first half of the year? And, what about the rest of the globe? More on all of that below.

Let’s Talk Oil!

FOR YOUR AMUSEMENT
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SYNOPSIS
By some accounts last week was the worst one-week drop among major US stock indexes in 2 ½ years. If so, keep in mind that Canadian stocks had far bigger losses. On a trend basis, only the Nasdaq has a marginally positive trend value. All others are now negative.

ProfiTrend Portfolio… The annualized growth rate for the ProfiTrend Portfolio is now at +213%… well above the comparable numbers for the S&P/TSX Composite Index (-50%) and the S&P 500 (+4%). We have to admit though that the PTP gains are due to an ever-increasing short play on Energy. More on that below.

Seasonality… We have the latest videos from Brooke Thackeray on seasonality effects going into year-end and beyond, in case you didn’t take the time to watch them last week. This is normally a time of tax-loss selling before a relatively common Santa Claus rally. As the argument goes, once you’ve dumped your 2014 losers for tax purposes (to offset capital gains), you’re ready to buy some new stocks that you hope will outperform during 2015. This phenomenon doesn’t normally apply to those of us who trade more frequently, and don’t require a year-end ritual. Then again, we are a rare breed!
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State Street Investor Confidence Index… You’ll find the latest results for November and the revised data for October. The November reading continues to favour stocks over lower risk assets. While the global index fell slightly, due to declines in the North American and Asian markets, institutional investors jumped right back into more European equities, after reducing their holdings in October. Apparently, they know something that we don’t. The European index is at an all-time high, since the publication of the SSICI indexes began. We’ve updated our chart and you’ll find more detail below. This month’s data will obviously not be out until near the end… December 30.

PTA 2015… Renewal Time
We repeat the specifics of the 2015 fee structure for ProfiTrend Advantage 2.0. In spite of ups and downs, we assume that you’ve all had a profitable investment year by incorporating our weekly information and data. We also assume that you’re looking forward to more of the same next year. You know that the relative trend analysis™ (RTA) approach is designed to maximize profits via our unique brand of trend analysis, while reducing potential losses during the down times. During 2014 we’ve placed more emphasis on playing the short side during downtrends. Hopefully, you too have experienced some gains in your portfolios, over and above loss prevention (by stepping to the sidelines during downtrends).

Topic of the Week… Let’s Talk Oil!
With the usual media hysteria, the bottom to oil prices is nowhere in sight. That is particularly detrimental to Canadian stock markets which are natural resource intensive. Unfortunately, other kinds of equities are being dragged down in sympathy (or so they say). But is this sharp decline in crude as bad as it seems? It’s clearly great for consumers with reduced gasoline prices and advantageous to major corporations like airlines too; but are the negative impacts on the economy offsetting those? That’s what we’ll be discussing this week.

ProfiTrend Advantage 2.0 Annual Status Report

SYNOPSIS
Canadian stocks continued to slide dramatically lower last week, with the S&P/TSX Venture Index dropping 5.4%! Although the Nasdaq slide a bit lower last week, the other two major US indexes rose. Nasdaq continues to be the trend leader.

ProfiTrend Portfolio… The annualized growth rate for the ProfiTrend Portfolio is now at +138%… still well above the comparable numbers for the S&P/TSX Composite Index (-22%) and the S&P 500 (+38%).

Seasonality… We have the latest videos from Brooke Thackeray on seasonality effects going into year-end and beyond.
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State Street Investor Confidence Index… You’ll find the latest results for November and the revised data for October below. The November reading continues to favour stocks over lower risk assets. While the global index fell slightly, due to declines in the North American and Asian markets, institutional investors jumped right back into more European equities, after reducing their holdings in October. Apparently, they know something that we don’t. The European index is at an all-time high, since the publication of the SSICI indexes began. We’ve updated our chart and you’ll find more detail below. This month’s data will obviously not be out until near the end… December 30.

Topic of the Week… ProfiTrend Advantage 2.0 Annual Status Report
Although we haven’t labelled it as such in previous years, we generally like to bring you up to date in December with developments over the previous year within the newsletter and the other web site pages as well. It’s a time when we like to start planning new features to introduce in the new year, and we welcome your input. It’s also a time when the majority of our subscribers are up for renewal. We have more detail on that below.

Momentum Myths Dispelled – Part 2

SYNOPSIS
Last week was a depressing one again for Canadian equity owners, while US stocks had minor gains. The trends are up (if only slightly) for US stocks, while Canadian index trends have turned negative.

ProfiTrend Portfolio… The annualized growth rate for the ProfiTrend Portfolio is now at +121%… still well above the comparable numbers for the S&P/TSX Composite Index (-7%) and the S&P 500 (+41%).

Seasonality… We revisit the US Thanksgiving trade, and concede that it didn’t deliver the turkey dinner of profits that we were anticipating.
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State Street Investor Confidence Index… The latest results for November and the revised data for October have just been released. The November reading continues to favour stocks over lower risk assets. While the global index fell slightly, due to declines in the North American and Asian markets, institutional investors jumped right back into more European equities, after reducing their holdings in October. Apparently, they know something that we don’t. The European index is at an all-time high, since the publication of the SSICI indexes began. We’ve updated our chart and you’ll find more detail below.

Topic of the Week… Momentum Myths Dispelled – Part 2
This week we continue our discussion of a major academic review paper on momentum investing. Last week we discussed 5 claims about momentum investing that have been proven to be false. This week we tackle 5 more. If you ever had any doubts about momentum approaches like our revolutionary relative trend analysis™ (RTA) methodology, those should all go away by the end of our discussion below.