My latest No Load Fund/ETF Tracker has been posted at:

http://www.successful-investment.com/newsletter-archive.php

Two strong up days pushed the major indexes to their best week in 5 years. We are now in striking distance of a domestic Buy signal.

Our Trend Tracking Index (TTI) for domestic funds/ETFs has moved now +1.43% above its long-term trend line (red), which means we are close to breaking out to the upside of the neutral zone.



The international index dropped to -3.07% below its own trend line, keeping us in a sell mode.



For more details, and the latest market commentary, as well as the updated No load Fund/ETF StatSheet, please see the above link.

The markets took off yesterday after some decent first quarter earnings reports from eBay along with bullish guidance from Intel pushed the Dow to a 257 point gain. Helping matters were better-than-expected numbers from JP Morgan Chase and Wells Fargo. Sky-high crude oil prices did not seem to matter.

IBM’s after-hours bullish report, along with raised profit guidance, could fuel the rally, at least for the short-term. The positions of our Trend Tracking Indexes (TTIs) improved as well and in the domestic arena we have now moved back to the upper end of the trading range:

Domestic TTI: +1.05%
International TTI: -4.13%

Again, to move out the neutral zone and into an all-out domestic Buy signal, we will need to pierce the upper end of the trading range at +1.50% and stay there for a few days. Until then, we will remain mostly on the sidelines, but may take small positions in those indexes that already have pierced through to the upside and are beginning to establish a new trend.

The WSJ had a feature on Barclays Global Investors new launch of an all-world stock fund, the exchange traded iShares ACWI Index Fund (ACWI). Here are some highlights:

Early this month, Vanguard Group announced plans to launch Vanguard Global Stock Index Fund. Vanguard’s first global index-tracking fund will offer both exchange-traded shares and traditional mutual-fund shares.

But Mr. Wiener argues that an actively managed fund may be a better bet for all-world investors — even those looking for low-cost options. He points to Vanguard Global Equity Fund (VHGEX), which charges expenses of 0.64% and has substantially outperformed global stock benchmarks over the long haul.

While such an ETF may provide some value in the future, don’t be swayed to jump right in. I for one will want to see price activity for some 9 months in order to be able to identify a trend.

Don’t fall for “using these global index funds as core funds,” because that means buying and holding no matter what. With the uncertainties in the market place, there is not one fund/ETF around that would qualify to be held without regards to market direction.

To survive these tumultuous times with your portfolio intact, you have to be sure that you are always on the right side of the market. That means you need to adopt the time tested saying “let the trend be your friend” when making any kind of investment decision.

I received several e-mails from readers who are “angry” with the market direction or at least their interpretation of it. When the domestic Trend Tracking Index (TTI) moved closer to the lower end of the neutral zone a few weeks ago, some investors apparently ended up being a little premature as they initiated substantial short positions. Some committed up to 30% of portfolio value.

As is often the case, when trends can’t be clearly defined, the markets can move sideways and/or back to the higher end of the neutral range causing some whip-saw losses. As you know from my updates, I have repeatedly cautioned not to make to early of a commitment either on the long or the short side.

It is important to accept the fact that the market is never wrong. You can be wrong or you can be right, but still lose money because your commitment happened to be too early. If your timing is off, just be sure to limit your losses via my recommended sell stops.

You have to be big enough (and forget about your ego) to accept the fact that you will be wrong at one time or another. The only way I know of how to deal with being wrong is to cut your losses short and forget about them. Prepare yourself for the next opportunity as well as the next trend, which is sure to come along; we just don’t know yet when.

Thanks to Michael Covel, whose book “The Turtle Trader” I reviewed a few weeks ago, I found a link on Michael’s website to a song created by Ed Seykota, a long time super-successful trend follower, whose blue grass band perfectly interprets and offers solutions to the whip-saw problem.

It’s a well done music video and you can watch it by visiting this link.

Enjoy!

Reader Brad pointed to an article titled “U.S. vs. Global Markets: Pain is Where You Feel It.” Here is an excerpt:

For months now, the entire media and the financial blogsphere has been talking about how dismal the U.S. financial markets have been. There is a tendency to believe that we are at the center of the world and that our problems are amplified compared to everyone else’s. In reality, although it may be true that we are situated at the hub of the world economy; but relatively speaking, our problems are not so bad.

The decline of the U.S. market (DJIA) by 7.9% YTD is hardly a dent compared to the losses other countries have been experiencing this year.

The featured map illustrates this point well as it shows at a glance how the world stock markets fared during the first quarter:

I like American success stories. You realize that there is simply no place like the U.S. when you read some of Lee Iacocca’s books or others detailing how a dishwasher made it up the food chain all the way to company president.

Entrepreneurial spirit along with boundless opportunities makes the Unites States a unique country to live and work in. With all of the gloom and doom of late, not much of this spirit has made front page anywhere. I was reminded of this when I read Timothy Sykes’ book “An American Hedge Fund,” a ‘Rocky-like’ story about a realistic look at the world of stock trading and hedge funds.

It is very inspiring and educational as Tim describes his trials and tribulations as he, while in college, turned $12,415 of Bar Mitzvah gift money into $1.65 million trading thousands of stocks from1999-2002. He managed the #1 Short Bias Hedge Fund from 2003-2006, and starred in the TV documentary Wall Street Warriors all before the age of 26.

What I liked about this book is Tim’s admission of failure and how he messed up trades by letting his ever growing ego get in the way. Here’s a man who definitely learned from his shortcomings and is willing let the world know about it by sharing them in his book.

The knowledge he gained from several years in the trenches represents wisdom that I have found also applicable to the world of trend tracking. Here are some highlights:

Before many traders even take a position, they guarantee their inevitable failure by allowing their obsessive research to cloud their objectivity. After putting in countless hours, days and sometimes even months of hard work, these traders aren’t open to the possibility that they may be wrong in their assumptions. They’re unwilling to admit that the most effective course of action might be contrary to their thinking.

Well said! Any trader or investor should adhere to Tim’s findings. This book is a fast and fun read, and I couldn’t put it down. Tim is a reader of this blog, so feel free to post comments below.