Aileron Market Balance: Issue 40 | Yield (Finance) | Dividend

August 5, 2012

and annoucements. Although we were at resistance, I didn't want to start a short on the AUD/JPY. I wanted to watch and observe. We moved higher, and what is very interesting, is that the currency markets are telling me that they are focusing on data and beneficial economic data coming out of the United States. I find that an interesting 'tell'. As I have been considering seasonal tendencies, I reflect on the fact that this is an election year. And that brings it's own seasonal tendencies that I perhaps have ignored too much until this point.

Aileron Market Balance
Issue 40
Visit Us: NoNonsenseTrading.com Email: aileronmarketbalance@gmail.com Twitter: @NoNonsenseTrade

Election Year – Equities Seasonal Tendencies Source – Bespoke Investment Group

Each

newsletter on Sunday that will contain my thoughts for the week ahead will have an audio file that accompanies it. The audio file that is associated with this PDF will contain my detailed thoughts moving forward into the next week. This PDF file is meant to serve as a rough, general outline to the audio file that many subscribers are finding more advantageous.

Interesting. To say the least. We actually see the market continue to head higher. On the topic, as I have discussed selling of my CocaCola (KO), and why … well … there are other stocks that I feel are getting a little … over-valued considering historical P/E's and intrinsic values. As it relates to Aileron Market Balance? Johnson & Johnson (JNJ) is getting to near that point. And although I have not purchased Abbott Labrotories (ABT) for Aileron Market Balance? I have discussed that stock publicly. Come September 1st? I may need to evaluate both of those stocks, and if they mark much higher? I may need to sell them if they mark much higher. I am still researching what stock will be my next “undervalued” purchase. My current leading

Investing Outlook:
Note: As a reminder. the share purchases of the “Dividend Investing 'Sister'” will be extremely small. It is my intent to demonstrate how to grow the size of these positions from 2 shares, to 300 shares using the “three sisters” portfolio management style. The “Dividend Investing 'Sister' Account” will also implement the “Permanent Portfolio Method” beginning in 2012 with $1,120.00 of the cash dedicated towards it.

Although I was not bullish last week due to what I saw in the currency markets, I didn't want to put on any bearish positions in front of the Fed and ECB moves

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August 5, 2012
contender is Aflac (AFL). I love their 'moat', or market share, and I like the numbers. There is always risk, and I do want to evaluate the risk I see they exposed to in Japan. As always, I will let you know before making any moves. than I thought we might. However, this is not unusual at the very end of July. The daily chart is showing clear resistance in this 2350 region. And typically, August 1st, sees a resumption of the earlier downtrend after the end of the month rally. So that is to say that I will begin to look for entrances on the 'short' side next week. Again, only day trades. October Sugar (SBV12 or /SBV2 in ThinkorSwim): I'll also be watching Sugar just to see if any day trade possibilities line up.

Trading Outlook:
Note: By way of reminder, since the Model Portfolio has only $9,809.37 in the Commodity Futures and Stock Trading portion of the portfolio, there will only be ' brief day trades' at this stage of the game for Commodity Futures trading in order to escape the risk of over-leveraged gap opens in the commodity futures markets. Stock trades may last more than one day. This is an attempt to demonstrate how account size relates to trading style. As I mention in my methodology series1, as the commodity 'trading sister' approaches $30,000 I will graduate the account into 'swing-trading' and demonstrate how I would go about doing this. The Forex account has $65.64 and is considered a micro-forex account for the purposes of the model portfolio.

Micro-Forex Trading

Methodology

Creation

and

Overall Trading Thoughts
I'm not really looking at many commodity trades. With real, 20 year food shortages in the grain markets, it's sort of throwing everything off. Grain is used to feed Cattle, Hogs, and the entire food complex is somewhat thrown off. I may have a commodities trade. Possibly. The trick has been ...

With any retrace in AUD/JPY to linear regression levels on the 30 minute chart, I would be intrested in trades to the long side, and will watch the pivot points in that area to buy from.

Commodity Trading Thoughts
September Cocoa (CCU12 or /CCU2 in ThinkorSwim): …. Finding a day trading pattern in this market. The daily chart is beautiful for a retracement and pullback. Cocoa as a market is fundamentally separated from the grain markets, as Cocoa is produced in countries outside of the United States. The trick, has been finding an intraday entrance, since we have decided to start out using a tiny trading account, to demonstrate the principles. I'll continue to monitor this market however.
1 Exact Link http://nononsensetrading.com/methodology.html

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August 5, 2012

Summary of the A.M.B. Model Portfolio
Note: In the beginning of this hypothetical portfolio, the share purchases of the “Dividend Investing 'Sister'” will be extremely small. It is my intent to demonstrate how to grow the size of these positions from 2 shares, to 300 shares using the “three sisters” portfolio management style. It is also understood that readers of this newsletter have a firm understanding of my 'three sisters' portfolio management system (See the Special Reference issue of “Aileron Market Balance” 2 for an explanation of this system).

Return from $1082.72 = + 1.62 %
- 2 shares @ 156.12 of GLD ( $312.24 ) ( Currently $311.10 ) ( 28.27 % of P.P ) - 2 shares @ 139.58 of SPY ( $279.16 ) ( Currently $278.69 ) ( 25.33 % of P.P ) - 2 shares @ 118.17 of TLT ( $236.34) ( Currently $254.84 ) ( 23.16 % of P.P ) - 3 shares @ 84.45 of SHY ( $253.35) ( Currently $253.41 ) ( 23.03 % of P.P )

S&P 500 Year to Date: + 10.61 % AMB Total Portfolio Return Year to Date: + 1.898 % Investing Account Balance: $4,183.75 • Return / Yield up + 3.241 % Year to date • Interest Income on 7/31/2012 of $0.01 • 4.063508 shares of PEP (DRIP off – Yield is 2.95 % )
4 shares at $63.31 on 11/15/2011 w/ $5.01 Commissions 0.032263 shares DRIP at $66.95 on 1/3/2012 0.032145 shares DRIP at $66.25 on 3/30/2012 $2.17 in Cash on 6/29/2012 – Sent $1.08 to Sav. Side-Pocket Next Dividend: September 28, 2012

• Remaining Cash: $1,622.93 ( 38.79 % ) $1.38 Paid from SPY Dividend $0.69 sent to the payout fund
• Percentages of that Cash -$1,222.93 of this Maneuvering Capital I reserve for Hedging and New Purchases ( 29.23 % ) -$80.00 of this Maneuvering Capital I reserve to Dollar Cost Average PEP further in the future ( 1.912 % ) DCA Price w/ no fundamental changes on PEP $60.00 -$80.00 of this Maneuvering Capital I reserve to Dollar Cost PG further in the future ( 1.912 % ) DCA Price w/ no fundamental changes on PG$58.00 -$80.00 of this Maneuvering Capital I reserve to Dollar Cost JNJ further in the future ( 1.912 % ) DCA Price w/ no fundamental changes on JNJ $59.00 -$80.00 of this Maneuvering Capital I reserve to Dollar Cost WM further in the future ( 1.912 % ) DCA Price w/ no fundamental changes on WM $28.00 -$80.00 of this Maneuvering Capital I reserve to Dollar Cost STX further in the future ( 1.912 % ) DCA Price w/ no fundamental changes on STX $15.00

• 4.0676 shares of PG (DRIP off – Yield is 3.43 % )
4 shares at $61.94 on 11/28/2011 w/ $5.01 Commissions 0.32392 shares DRIP at $64.83 on 2/15/2012 0.35208 shares DRIP at $64.19 on 5/15/2012 Next Dividend: Not yet announced

• 4.035 shares of JNJ (DRIP off – Yield is 3.53 % )
4 shares at $62.31 on 11/28/2011 w/ $5.01 Commissions 0.035 shares at $65.14 on 3/13/2012 $2.46 in Cash on 6/12/2012 – Sent $1.23 to Sav. Side-Pocket Next Dividend: September 11, 2012

• 8.081305 shares of WM (DRIP off – Yield is 4.08 % )
8 shares at $32.39 on 12/22/2011 w/ $5.01 Commissions 0.081305 shares DRIP at $34.93 on 3/23/2012 $2.86 in Cash on 6/22/2012 – Sent $1.43 to Sav. Side-Pocket Next Dividend: Not yet announced

• $ 278.39 ( 6.654 % of this account ) available from Slush Fund Dividend Investing Sister Year to Date

• 11 shares of STX (DRIP off – Yield is 4.14 % )
11 shares at $24.78 on 6/29/2011 w/ $5.01 Commissions Next Dividend: August 29, 2012

• Permanent Portfolio $1,120.00 of cash I reserved for Permanent Portfolio Purchases
2 Exact Link http://www.scribd.com/doc/73238645/Aileron-MarketBalance-Special-Reference-Issue-Portfolio-Management

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August 5, 2012
Total Trading Balance: $9,875.00 ( Return / Yield up + 1.541 % Year to Date ) Commodity Futures and Stock Balance: $9,809.37 • Return / Yield up + 1.579 % Year to Date • Next Re-Distribution Goal: $10,700.00 • Original 3% risk tolerance gives us approximately $282.54 for my drawdown tolerance – ALREADY USED • $ 278.39 available from Slush Fund There were four trades last week that resulted in an overall loss of $183.20 for the week …
Short 1 SBV2 from 2284 to 2281 on 7/30/2012 – PROFIT $26.60 (including commissions of $7.00) Short 1 SBV2 from 2289 to 2288 on 7/31/2012 – PROFIT $4.20 (including commissions of $7.00) Interest Deposit on 7/31/2012 of $0.07 Short 1 CCU2 from 2388 to 2396 on 8/1/2012 – LOSS $97.00 (including commissions of $7.00) Short 1 CCU2 from 2395 to 2406 on 8/1/2012 – LOSS $117.00 (including commissions of $7.00)

And the updated Money Management Statistics are as follows ...

Futures and Stock 'Sister' Account Year to Date

Micro-Forex Balance: $65.64 • • • • Return / Yield -3.811 % Year to Date Phase 2 Return: 0.18 % Phase 3 Return: -0.114 % $ 278.39 available from Slush Fund

There were no Forex Trades last week. However, there was a $0.01 positive change from an interest payment in the account …

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August 5, 2012
Micro Forex Account Year to Date Savings Side-Pocket Account Balance: $1,807.31 The interest payment from last month was put towards the rebuilding the “Slush fund / Drawdown Kill Switch fund”. We're working at that, slowly but surely. Boy, has that arm of the portfolio proven it's worth this year. We're still taking half of our dividends, and putting them towards the “Payout Fund”, and you will note that this week, that amount has increased. I'm still not taking it out though. When we're done doing that later on this year, we will take a few more dividends in the form of cash in the dividend account, and then turn the DRIP back on ... And the Micro-Forex money management stats remain the same since there were no trades …. • Capital is - 10.9 % Year to Date. Yield Return on Capital + 0.7981 % • $278.39 for a Slush fund / Drawdown Kill Switch fund ($226.75 owed to this Fund) • $1,010.29 for a Base Savings
• • Percentages of that Cash: $814.29 of this cash reserved for Long Term Variable Capital – PP - ( 80.60 % ) $120.00 of this cash reserved for CD Ladder creation ( 11.88 % ) - One $10.00 One Year CD purchased on 11/21/2011 at 0.60% - One $10.00 One Year CD Purchase on 12/21/2011 at 0.50% - One $10.00 One Year CD Purchase on 1/21/2012 at 0.50% - One $10.00 One Year CD Purchase on 2/21/2012 at 0.50% - One $10.00 One Year CD Purchase on 3/21/2012 at 0.50% - One $10.00 One Year CD Purchase on 4/21/2012 at 0.50% - One $10.00 One Year CD Purchase on 5/21/2012 at 0.50% - One $10.00 One Year CD Purchase on 6/21/2012 at 0.50% - One $10.00 One Year CD Purchase on 7/21/2012 at 0.50% $20.00 of this cash reserved for the first side-pocket purchase ( 1.98 % ) $20.00 of this cash I reserve for the second sidepocket purchase ( 1.98 % ) $36.00 of this cash I reserve for the hedging account ( 3.563 % )

• • •

• $505.14 for Emergency Savings • Getting Paid Fund: $13.49

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August 5, 2012
Total Portfolio Balance: $15,866.07 - Total AMB Inception to Date Return: + 5.774 % Return / Yield up + 1.898 % year to date) S&P 500 Year to Date: + 10.61 %

If you have any questions regarding my personal outlook, or any other comments, please feel free to contact us at aileronmarketbalance@gmail.com. Our twitter account is @NoNonsenseTrade. I will say that if you have questions about your own trading and you want to ask for my input? Please include your most recent money management performance statistics in any email correspondence.
Until next time, stay safe … trade well, and remember that loving other people doesn't cost a dime.
Note: I, the author do not grant this work for wide distribution beyond any single individual subscriber as this publication is protected by U.S. And International Copyright laws. All rights reserved. No license is granted to the user except for the user's personal use. No part of this publication or its contents may be copied, downloaded, stored in a retrieval system, further transmitted or otherwise reproduced, stored, disseminated, transferred, or used, in any form or by any means except as permitted under the original subscription agreement or with prior written permission. The above statements should not be construed as an investment or trading recommendation. Aileron Market Balance is a newsletter that allows subscribers to look 'over my shoulder' as it were, for my own personal specific trading and investing ideas and thoughts for the next week. But they are only thoughts as of the moment of publication, and are subject to change. There is no guarantee that I will enter, or have entered any of the trading or investing ideas that I discuss in this newsletter; as larger accounts may require a different strategy as the ones presented here. Any trades or investments that I discuss within this newsletter are simply my own thoughts regarding my own investing and trading outlook. I discuss which trades I take and do not take on the No Nonsense Trading Forums, as well as the Ventrilo Voice Server. Remember that entering any market is an individual decision. This newsletter simply contains my trading and investing thoughts for the next week. I personally only enter any market after watching and reading the tape and I trade using money management principles3. The losses in trading can be very real, and depending on the investment vehicle and market, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 16 years of experience in trading and investing in these markets. The Model Portfolio accounts are hypothetical accounts,with all of the inherent problems therein, which are used within this newsletter in an attempt to track the results of this newsletter, and is run for the education of other traders who should make their own decisions based off their own research, due diligence, and tolerance for risk. Any pictures used within this newsletter are believed to be public domain. Any charts that are displayed using the ThinkorSwim platform, and other pictures were obtained through Wikipedia's public domain policy.

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Exact Link - http://nononsensetrading.com/MoneyManagement.html

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