Weekly Review

Hey, when you're right, you're right. Yesterday I wrote:

"tomorrow I'm looking for at least a gain comparable to today's, maybe more."

So yesterday we gained 21 points and today we gained 30. In fact, we had quite a week, with the Dow posting its biggest gain in 10 weeks, as you can see in this weekly Dow chart.

The Dow ended the week up 2.2% and is now up 3.61% year to date. Also, the famous First Five Days of January closed higher as did the entire month. And now we have the first week of February, which is historically not as strong as January, also closing higher and by a good amount. So far, it appears that 2011 is living up to the pre-presidential year historical effect mentioned in The Stock Traders Almanac: the year before an election, the market is up an average of 10.5%, almost as much as the other three years in the four year election cycle put together.

And therein lies the immediate question. With the rally having gone on so long now, I have to wonder if it isn't about time for the correction everyone is calling for to finally kick in. Although I'm pretty confident the year will end higher, it's pretty obvious that it won't move up in a straight line. We'll address that in my next post.

Performance

Although the Dow was up 0.25% today, I somehow managed to lose 0.29%. Oh well - that happens sometimes. In any case, I ended the week up 2.38% thanks to strong performance earlier this week. I am now up 4.77% year to date which puts me easily on track to match my 32% return of last year. My Sharpe ratio stands at 0.33.

Trades

Today I closed out my position in SPIL at 7.00 for a 1 3/4 point gain and removed it from my low price/high yield portfolio. SPIL has had a nice run and its current yield of 5.77% puts it at the bottom of the list anyway. I will be looking for another tech name to replace it with and put that money back to work.