Lg Cap Portfolio Review

The market took a rest this week with the SP500 declining -1.6%. The pullback appears to be little more than a retest of the prior breakout level and polarity support at 2,065. The two levels to watch going forward will be this 2,065 retest and most importantly the swing lows at 1,995.

SP500 weekly chart

While Friday's reaction to the better than expected Payroll number was a bit disconcerting, the intermediate trend remains higher as we continue to see higher highs. You have to be willing to stomach a little volatility if you wish to remain aligned with long-term trends. This is why we have rules in place to encourage us to act in a competent way when stress begins to elevate.

Looking at our Large Cap Portfolio this week, we do have one Exit and no new entries. After a 14-month run we will be closing our 20+ Year Treasury Bond (TLT) position. While rates and rate sensitive names continue to get beaten, the overall picture for our portfolio remains on solid footing.

EXITING TLT

It was a good run for our Treasury position. While we did give back some gains at the end (as will always be the case with a trend based strategy), clearly we stuck to our trade until the trend showed serious signs of deterioration.

With the convincing break of support this week, we will step aside collecting a 15% gain and all those 1st of the month payouts along the way. Overall it was a super trade and we stuck with our plan all the way.

This week we are going to look at our remaining positions on a Year to Date basis to see how each is performing so far in 2015. The SP500 is currently sitting on a 0.5% gain for the year.

Daily Charts YTD

SBUX

Stop: $79

BA

Stop: $120.75

DIS

Stop: $90.95

UNH

Stop: $100

BMY

Stop: $57.50

AAPL

Stop: $106

IP

Stop: $51.50

HON

Stop: $95.88

LMT

Stop: $188.35

CSCO

Stop: $26.35

PPG

Stop: $219.80

TWX

Stop: $77

UNP

Stop: $111.90

PCG

Stop: $49.50

10 out of our 14 holdings are currently outperforming the SP500 so far in 2015. What we need to focus on closely are our lagging positions. Winners take care of themselves, so we have nothing to do there except continue to let them work. 

Stops are in place to protect our account from suffering too large of a loss. As long as we stick to our plan of cutting our losses quickly and letting our winners run, we will be just fine.

Most of our holdings have seen reasonable consolidations after making new highs and no further action is required at this time. PCG and UNP are our most vulnerable holdings currently and will need to be watched closely.

Everything else looks just fine and to abandon those winning positions now would only be due to an emotional/fearful reaction. Always make your plan when the markets are closed, and most importantly always stick to that plan.

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