This is just a quick post to illustrate to subscribers and public blog followers why we added positions to each the of the ETF and Stock portfolios. I added the large-cap gold miner ETF (XGD) to the ETF portfolio and Agnico Eagle (AEM) to the stock portfolio. I added them for a couple of reasons. First, they both have broken above the flattening (almost flat) 50 week moving average (wma) and completed successful tests of the 50 wma. In both cases, this is the first successful test of that moving average since 2016, so it is a notable event. The second reason is that the portfolios are both fairly heavily invested at the moment and the broader market is showing some weakness. Gold miners tend to be counter cyclical (meaning they move the opposite way of the broad markets) so these positions can act as a hedge against the long holdings. Here are the charts:
For XGD, the stop will be the swing low at $11.07, which occurred basically right at the 50 wma. You can also see that it is very close to breaking out to new highs, so when this occurs, it will give us confidence that this will be a successful investment.
The AEM chart looks almost the same as XGD (these big miners all tend to move together) but it has already broken out to new highs and is close to surpassing the 2018 high. The stop loss is at $53.10.
I have posted this on both the private and public blog but subscribers should stay tuned for a chart update on all of the stock portfolio next week! If you are not a sub, please consider subscribing to the service to receive full portfolio updates.