HOW ONE iTuliper IS INVESTED?

[BiscayneSunrise]

Re: HOW ONE iTuliper IS INVESTED?

My bet now is that the equity markets are going to go up for a while--5, 10 or perhaps 20-30 days. No one knows how long or how much. It was quite a recovery today--from 12:45 to 4PM the DJI picked up 625$. I expect some follow through, and I am not sure that even today's opening price will be retested.[/QUOTE]

Jim,

Agreed. Time now for a relief rally which, to your point, shouldn't last more than a month, at the very most. A tradable rally only and as it progresses, a good time to sell what dogs you may want to unload. This morning, gold was showing some signs of climbing from its' most recent short term bottom.

Greg

[Tulpen]

Re: HOW ONE iTuliper IS INVESTED?

I think that yesterday's rally is one big bull trap. Also there is still an 7% gap between Europe and Asia on the one side and the USA on the other with regard to the percentage fall of the latest correction. I expect that to correct by the US stock falling at least another 7%.

Currently 100% short oil (long DCR and short USO).

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

jk, BiscayneSunrise, Tulpen, I appreciate your thoughts. I would not argue with anyone. I know the discrepany between degree of losses in world and here. We've not even hit bear-market definition on closing basis in big indices, close, but not there yet.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

I closed my SRS and SKF positions today getting out with 9.93% gain in SKF considering the 25% I shed a few days back, and 3.36% gain with SRS considering the 25% sold last week. Should and could have done better on both holding if I were thinking.

On 1/22/08 I opened an ~1% position in GDX when the gold/xau ratio popped up above 5.0.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

1/31/08

Since last note, on 1/28/08 I opened a position of ~0.84% in NLR, then I read here that we're running out of uranium in 50 years, which for me is no worry, then here someone says we'll or they'll go to using plutonium, then no worry. The USA cannot do without electricity, nor can any other place I've visited in the last 40 years, the exception I saw were villages in Vietnam country side, and I guess some of them may still exist without electricity. Nuclear is the ultimate long-term source, but then I am a "nuke the whales" kind of guy.

Today the Gold/XAU ratio hit 5.0 and I added ~0.9% to my position in GDX.

The table below is my current allocation.

My gain this year is 5.37%. My one-year gain is 15.15%, two-year 10.89% compounded, and three-year 13.01% compounded. My return since my portfolios' high in early 2000 is -0.91% compounded.

On closing bases, for 2008 the DJI is -4.63%, SPX -6.12%, Nasdaq -9.89%, NDX -11.68%, RUT -6.88%.

1/31/2008	POSITION	% INVESTD	NOW GAIN	% GAIN	ALLOCATION
DOW	DDM	2.74%	2,712	9.74%
NDX	QLD	2.70%	-104	-0.34%
SPX	SSO	2.92%	2,245	7.43%
RUT	UWM	3.03%	2,965	9.65%	11.38%	+200% OF INDEX
GOLD & SILVER	CEF	0.80%	2,879	47.67%
MINING	GDX	1.81%	381	1.93%
GOLD	GLD	2.46%	6,099	28.60%
SILVER	SLV	1.51%	2,589	18.20%
GOLD	GTU	1.31%	4,930	51.30%	7.89%	PM'S
METALS	RJZ	0.93%	660	6.83%
COMM AGRIC	DBA	1.00%	1,203	12.16%
COMM AGRIC	RJA	0.92%	171	1.70%	2.84%	COMMODITY
ENERGY	NLR	0.85%	69	0.73%	0.85%	ENERGY
YEN	FXY	10.12%	10,826	10.63%
YIELD ON 30YR-BOND	RRPIX	3.18%	-2,134	-5.69%
HEDGED EQUITY	HSGFX	18.58%	4,392	2.17%	31.87%	OTHER
	INVESTED	54.84%	39,884	6.99%	GAIN ON NON-CASH
	CASH	45.16%
		100.00%

[merry]

Re: HOW ONE iTuliper IS INVESTED?

I own CEF and GTU outside our IRA's ...

Hi Jim, do you file form 8621 for CEF since it is not in an IRA? I manage my Mom's IRA and non-IRA accounts and I also do her taxes. I found out that CEF is considered a PFIC when it is not in an IRA so I had to make sure that form was filed when I did her taxes. I hope I did it correctly last year. It didn't seem to be that hard.

Thank you.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

Hi Jim, do you file form 8621 for CEF since it is not in an IRA? I manage my Mom's IRA and non-IRA accounts and I also do her taxes. I found out that CEF is considered a PFIC when it is not in an IRA so I had to make sure that form was filed when I did her taxes. I hope I did it correctly last year. It didn't seem to be that hard.

Thank you.

I don't think that question came up on my tax program last year, and if my life depended upon it, I hope it doesn't, I have no idea of what form 8621 is.

Do you think the IRS will come after me? I've got my tax stuff somewhere here on my messy desk, so I'm make a note to check form 8621.

Thanks Merry.

Incidentally, what is a PFIC?

[zoog]

Re: HOW ONE iTuliper IS INVESTED?

I don't think that question came up on my tax program last year, and if my life depended upon it, I hope it doesn't, I have no idea of what form 8621 is.

Do you think the IRS will come after me? I've got my tax stuff somewhere here on my messy desk, so I'm make a note to check form 8621.

Thanks Merry.

Incidentally, what is a PFIC?

PFIC = Passive Foreign Investment Company. According to silveranalysis.com:

CEF, on the other hand, should be eligible for the 15% capital gains rate. However, because CEF is considered a "passive foreign investment company" (PFIC), it is normally taxed at very onerous rates! Fortunately, by filling out tax form 8621, and making the qualified electing fund (QEF) election, CEF should qualify to be a QEF. There is a document on their web site which addresses their PFIC/QEF status in detail. You must file this form in every year which you own the shares (outside an IRA or other tax-protected account). In a taxable account, acheiving a 15% rate vs. a 28% rate makes a big difference, and in my opinion fully makes up for the risk associated with buying at a premium, assuming you only intend to sell at much higher prices. However, because of the complications inherent in investing in PFICs, I highly recommend you speak to an accountant when buying CEF in a taxable account. It is possible to be charged up to a $10,000 dollar penalty from the IRS if you don't file form 8621 when you are supposed to!

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

PFIC = Passive Foreign Investment Company. According to silveranalysis.com:

I could say, "holy shit!!", but writing I really can't say that.

Thanks, Zoog. This is something I'll get squared away.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

Look around, does anyone see anything that is bullish for equities?

Well, there certainly is not any bullishness in any news I've crossed in a while.

Today I added a third more to my +200% positions in the ETF's DDM, QLD, SSO, and UWM based respectively on the DJI, NDX, SPX, and RUT.

Why? Saturday, I noted in

in discussing weekly put/call data for the OEX

that a rare low reading of 0.65 was recorded for the weekending 2/8/08 and offered some discussion regarding that datum.

I also track the daily CBOE put/call rations for Equity Options as well for the S&P 100 (OEX) http://www.cboe.com/data/mktstat.aspx


DATE CALLS PUTS RATIO

02/05/08		32,919		22,568	0.69
02/06/08		27,150		16,856	0.62
02/07/08		25,315		16,671	0.66
02/08/08		35,468		16,931	0.48
02/11/08		20,514		12,688	0.62

{SORRY FOR SCREWY FORMATTING IN TABLE}

Above are the data for the past five days through last night. Since 1/3/06, 279 market days, there have only been 39 days when the put:call ratio was less than 1.0. There have not been five days running when the p/c ratio was less than 1.0 since 4/18-4/25/05 when there were six straight. It turned out that 4/20/05 marked an interim bottom using the SPX, and a nice entry point for being long equities.

There are similar instances where what I consider strong bullishness in the OEX p/c ratio suggests going long. This interpretation is not of course infallible.

At any rate, my assessment of the equity market using a number of recent readings for AAII sentiment, these put/call data just mentioned, relatively high p/c readings in the Equity Options (suggesting fear amongst small investors), and what I see as generally a very bearish atmosphere in general make me want to add to my speculations on the long side.

I also opened a position ~1% in DIG a +200% ETF based on DJ US Oil and Gas Index. http://www.proshares.com/funds for two reasons, I am underinvested in energy and the chart of DIG presented a classical buy signal using the RSI indicator and the MACD had turned up and the MACD histogram had just turned positive.

Edit: Good man, FRED, thank you. FRED made the table better, headings still off, but in correct order.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

I'll be god, (I'm dyslexic) I found a bullish item regarding Barton Biggs' thinking that the market is "at or very near an important bottom" and may be led higher by banks and brokerages when a rally occurs.

Biggs correctly forecast U.S. equities would rebound from declines in March and August last year. On March 16, following a 5 percent decline by the S&P 500 from its Feb. 20 peak, he said stocks were approaching a bottom and predicted a gain of as much as 15 percent for the index in 2007.

The S&P 500 rose as much as 12 percent from that level before retreating to end the year with a 3.5 percent gain.

On Aug. 16, after a 9 percent decline by the index, Biggs said it was bottoming and predicted a rebound. The benchmark rose almost 11 percent over the next seven weeks.

http://www.bloomberg.com/apps/news?p...U2I&refer=home

I'll be watching UYG +200% Financials on the opening tomorrow.

http://www.proshares.com/funds/uyg.html?Overview

Edit: here is chart on UYG. There has been a tremendous pickup in volume, which either represents late capitulation by those who were long, or either buying by individuals looking for a bottom.
http://bigcharts.marketwatch.com/int...x=25&draw.y=12

[jk]

Re: HOW ONE iTuliper IS INVESTED?

I'll be god, (I'm dyslexic) I found a bullish item regarding Barton Biggs' thinking that the market is "at or very near an important bottom" and may be led higher by banks and brokerages when a rally occurs.



http://www.bloomberg.com/apps/news?p...U2I&refer=home

I'll be watching UYG +200% Financials on the opening tomorrow.

http://www.proshares.com/funds/uyg.html?Overview

Edit: here is chart on UYG. There has been a tremendous pickup in volume, which either represents late capitulation by those who were long, or either buying by individuals looking for a bottom.
http://bigcharts.marketwatch.com/int...x=25&draw.y=12

i just read somewhere that barton biggs was short oil from 30 to 70. nonetheless, a rally is quite plausible as long as there is no bad news. also, this weeks action is likely heavily influenced by options expiration.

[algerwetmore]

Re: HOW ONE iTuliper IS INVESTED?

I agree with Jim, as the bulk of my IRA is split between Hussman Strategic Growth Fund and the Hussman Total Return Fund.
However, my wife's IRA is mostly in gas/oil royalty trusts, central fund of Canada and a hard currency fund. I guess I'd rather hit for average than swing for the home run.

[nathanhulick]

Re: HOW ONE iTuliper IS INVESTED?

EJ says gold is a bubble. It will go up, but then go down . . . and it's been said here many times that it's hard to catch a top.

What about taking that cash and buying long-term T-bonds at around 20% (interest rates predicted by EJ in KaPoom theory), then collecting 20% for the next 25 - 30 years (depending on when the Fed calls them)?
Of course, you'd have to try and catch the top with bonds, too.

Or maybe a combination of both . . . ride gold up, then buy T-bonds.

I just want to point out here, that you wouldnt have a return of 20% for 25 - 30 years in these long bonds unless you believe that interest rates are going to stay at 20% for that entire time.

If interest rates dropped back to "normal levels" (5-10%??), you would have a large gain on the bond at that time, at which point you would only be getting a return of whatever the actual interest rates were. (from an accounting standpoint, the value of the bonds would have increased and your rate of return would decrease)

I am sure that I did not explain that very well, but hopefully it makes sense.

[Jim Nickerson]

Re: HOW ONE iTuliper IS INVESTED?

i just read somewhere that barton biggs was short oil from 30 to 70. nonetheless, a rally is quite plausible as long as there is no bad news. also, this weeks action is likely heavily influenced by options expiration.

I don't look upon Barton as dog, but over the years as I remember he has made some worthwhile calls mostly contrarian I believe.

Who isn't wrong sometimes?