A Summer of Soporific Somnolence

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

U.S. markets endured a down week with the Dow Jones dropping 1.18%, the S&P 500 falling 0.68% and the NASDAQ pulling back 0.30%. Global stock markets bucked the trend, with the MCSI Emerging Markets Index ending the week 0.22% higher.

You did have a handful of gainers in your Alpha Investor Letter portfolio, including the Market Vectors Biotech ETF (BBH), which added 2.91%, and the WisdomTree Japan Hedged Equity (DXJ), which rose 1.31%.

Several positions did drop below their 50-day moving averages and technically moved to a HOLD. These include Berkshire Hathaway Class B Shares (BRK-B), ICICI Bank Ltd. (IBN), the PowerShares Dynamic Energy Exploration & Production ETF (PXE) and Markel Corp. (MKL).

If it seems to you that there isn’t much happening in the markets, that’s because — well, there really isn’t.

The S&P 500 closed yesterday right near the same level it did back in mid-June. So it’s not like the market has been doing poorly. It’s just that it hasn’t been doing much at all.

Volatility has dropped to vanishingly low levels. One technical measure of the market’s volatility — the Bollinger Bands -– has dropped below 2% for 10 straight days for the first time since January 2007. That puts today’s market in the bottom 1% of all such readings since 1928. Calm like this can last for a surprisingly long time. And with the calendar heading into August, we may have a while to go.

Although the headlines would have you thinking otherwise, the good news is that both the United States and global markets seem immune to bad news coming out of Russia. In fact, global stock markets have been gathering steam of late, with Asian shares touching a six-and-a-half-year peak in this morning’s trading. The MSCI Emerging Markets Index is hitting levels not seen since January of 2013. The Chinese stock market, in particular, has started to rally sharply. After several years of lousy performance and false starts, this market may be soon be worth a second look.

Portfolio Update

iShares MSCI Ireland Capped Investable Market Index (EIRL) gained 0.31% last week. Ireland is currently seeking to refinance its bailout loans in order to get a better interest rate. Ireland also recently gained preliminary approval to begin early payoff of its expensive International Monetary Fund (IMF) loans. This is all bullish news for your bet on the Irish recovery. EIRL is a HOLD.

Exclusive  Booking Triple-Digit Percentage Gains in European Success Story

WisdomTree Japan SmallCap Dividend (DFJ) rose 0.57%. This Japanese small-cap dividend fund continued its surge back from a recent correction to break above its key $54.00 resistance point and hit a new 52-week high. WisdomTree Japan Hedged Equity (DXJ), your other Japan-based holding, is also forming a similar pattern and moving higher. DFJ (and DXJ) are both a BUY.

Market Vectors Biotech ETF (BBH) added 2.91% over the past five trading days. The biotech sector is continuing its “stealth comeback” after a hefty correction in the first quarter of the year. Now up better than 24% in your portfolio, BBH still has plenty of room to run back to its previous highs. BBH recently took a convincing bounce higher from its 50-day moving average (MA) and is a BUY.

Las Vegas Sands Corp. (LVS) gained 0.96%. The Nevada State Gaming Board released its June gambling statistics last week and reported a 14% jump in casino revenues. This may have a broad effect on gambling-based stocks over the short term and push prices higher. LVS pushed above its 50-day MA intraday yesterday, but fell back below it to remain a HOLD.

PowerShares Dynamic Energy Exploration & Production ETF (PXE) dipped 1.43% last week. However, with the United States, the European Union and several other players in Russia’s neck of the woods recently turning up the heat on Vladimir Putin and his cronies, a fire may ignite under energy prices at any moment, sending this exchange-traded fund significantly higher. PXE dipped to a HOLD last week.

Nicholas Vardy

Editor’s Note: New Feature! We appreciate that you may use two e-email accounts during the day, and we want to help you keep track of your investments as seamlessly as possible. As a value-added service, we will begin to send these alerts to your second email address if you would like. To add your second email address, send us an email from the account you received this hotline at with your name, zipcode and your other email address to customerservice@nicholasvardy.com.

Exclusive  Daily Data Flow: Jobs Data Boosts Dow Past 14,000; Auto Sales Strong in January; Euro Beats Dollar and Yen

Like This Article?
Now Get Our FREE Special Report:
Alternative Investing: Investing in Timber

Stock Investor editor Paul Dykewicz reveals why investing in timber may be one of the best long-term portfolio strategies you'll find today.

Get Access to the Report, 100% FREE


img
previous article

The relevance of global currency movements is tough for most American investors to get their heads around.

PREMIUM SERVICES FOR INVESTORS

Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

LEARN MORE HERE

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

LEARN MORE HERE

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

LEARN MORE HERE

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

LEARN MORE HERE

Mike Turner

Mike Turner’s financial, mathematical, computer science and engineering background serves as the foundation for his disciplined, rules-based approach to trading. Mike’s three services include:

Product Details

LEARN MORE HERE

Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details

LEARN MORE HERE

DividendInvestor.com

Used by financial advisors and individual investors all over the world, DividendInvestor.com is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

LEARN MORE HERE