AOD Watch

The Alpine Total Dynamic Dividend Fund (AOD), a high-yield, high-risk place to park money, is showing bull phase on the macd after a 30-trading-day sojourn into bear territory that saw the price decline by 35.5%

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
AOD $6.81

At 11:20 a.m. Eastern

AOD's current yield is 20.75%, paid in monthly installments. You don't get that kind of yield without risk to principal (except in my dreams, of course).

Generally, companies that are less than blue chip are the ones that pay the big dividends, increasing the risks of default and capital loss due to poor earnings or other fundamentals.

The fund, seeking high yields, has strong overseas exposure, which means not only interest-rate risk but currency exchange risk as well.

The fund uses a rotating strategy: It enters a position, collects the dividend, and then moves that money on to the next position, thereby increasing management costs.

To my mind interest rate risk is the greatest. Since the most recent collapse of capitalist finance, governments have lowered interest rates as far as they can go -- to zero. So the only place for interest rates to go is up, and when rates rise, bond and pseudo-bond prices fall.

So, the prudent trader will treat AOD as a volatile stock, rather than as a bond. The dividends are a wonderful boost, but capital loss can wipe out that advantage in the blink of an eye, and can multiply the profit many times over just as quickly.

With AOD, ultimately, capital gain is the game. And quite a lucrative game it can be for those willing to watch their position like a hawk.

Reversal Levels

• $7.04, +3.4%
• $6.83, +0.3%
• $6.81 <== You are here.
• $6.58, -3.4%

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Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.