Timing Model = 1.5
80% long, 20% cash
Global allocation of long positions
MSCI EAFE Index 20%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 50%
Top U.S. Sectors
U.S. Telecommunications 3.5
U.S. Health Care 3.5
U.S. Semiconductor 2.5
Composite Internet 2.5
U.S. Biotechnology 2.5
Precious Metals 2.5
U.S. Leisure Goods 2.5
U.S. Pharmaceuticals 2.0
U.S. Consumer Services 2.0
Top Intl. ETFs
MSCI Malaysia Index Fund 1
MSCI Brazil Index Fund 1
FTSE China (HK Listed) Index Fund 1
S&P Latin America 40 Index Fund 1
FTSE/Xinhua China 25 Index Fund 1
MSCI South Korea Index Fund 1
MSCI All Country Asia ex Japan Index Fund 1
MSCI Taiwan Index Fund 1
Strategy 3
Money Market 33%
U.S. Long Bonds 33%
Precious Metals 33%
Strategy 4
U.S. Long Bonds 25%
U.S. Large Caps 25%
Precious Metals 25%
U.S. Small Caps 25%
Sentiment will increasing become a non factor and the SPX and Value Line Composite Index's ability to rise or stay above its 75 dma will be increasingly important. Sector rotation has muddied the waters a bit recently. I'll be curious to see if Semis and Internet can hold onto their recent hot steaks. I'm also curious if the intermediate term OS condition of Healthcare means the sector will have a another run. Right now, sector diversification is makes a lot of sense.
Sunday, March 29, 2009
Monday, March 23, 2009
Here we go again
Once again the Value Line Composite broke above it's 75 day moving average, pushing my timing model to +1.5 or 80% long. This could very easily be reversed tomorrow - equities are over-extended on a short term basis. Whipsaws must be expected when using trend indicators. If the market looks as though it will hold tomorrow, I will be increasing exposure according, but will be ready...even expecting to reverse course.
My guess is we will see some consolidation over the coming days if not weeks. However, I would love to see equities, both large and small cap, take a run at their 200 day moving average sometime during the next month or two.
From a long term perspective, it's impossible to know if the bear bottom is in or if we'll see yet another low.
One last thing. My Tactical Asset Allocation portfolio is now only 7.3% from breaking even with where it was on January 2, 2008. I don't know if I should be happy or not about that.
My buy and hold portfolio has fared far worse. Thankfully I had slightly over 30% in bonds when the bear market began. I really need to re-balance though - and soon.
My guess is we will see some consolidation over the coming days if not weeks. However, I would love to see equities, both large and small cap, take a run at their 200 day moving average sometime during the next month or two.
From a long term perspective, it's impossible to know if the bear bottom is in or if we'll see yet another low.One last thing. My Tactical Asset Allocation portfolio is now only 7.3% from breaking even with where it was on January 2, 2008. I don't know if I should be happy or not about that.
My buy and hold portfolio has fared far worse. Thankfully I had slightly over 30% in bonds when the bear market began. I really need to re-balance though - and soon.
Saturday, March 21, 2009
Week of 3-22-2009
Timing Model = 0.5
60% long, 40% cash
Global allocation of long positions
MSCI EAFE Index 20%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 50%
Top U.S. Sectors
U.S. Health Care 4.5
U.S. Semiconductor 3.5
Precious Metals 3.5
Composite Internet 3.0
U.S. Technology 3.0
U.S. Biotechnology 3.0
U.S. Oil & Gas 3.0
U.S. Telecommunications 2.5
U.S. Pharmaceuticals 2.5
Top Intl. ETFs
MSCI Malaysia Index Fund 1
MSCI Brazil Index Fund 1
MSCI South Africa Index Fund 1
Strategy 3
Money Market 33%
U.S. Long Bonds 33%
Precious Metals 33%
Strategy 4
U.S. Long Bonds 25%
Agriculture 25%
Precious Metals 25%
U.S. Small Caps 25%
The reversal in sentiment as again added more equity exposure. Now it's up to prices to signal an intermediate term trend change. Let's see what happens over the coming weeks.
60% long, 40% cash
Global allocation of long positions
MSCI EAFE Index 20%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 50%
Top U.S. Sectors
U.S. Health Care 4.5
U.S. Semiconductor 3.5
Precious Metals 3.5
Composite Internet 3.0
U.S. Technology 3.0
U.S. Biotechnology 3.0
U.S. Oil & Gas 3.0
U.S. Telecommunications 2.5
U.S. Pharmaceuticals 2.5
Top Intl. ETFs
MSCI Malaysia Index Fund 1
MSCI Brazil Index Fund 1
MSCI South Africa Index Fund 1
Strategy 3
Money Market 33%
U.S. Long Bonds 33%
Precious Metals 33%
Strategy 4
U.S. Long Bonds 25%
Agriculture 25%
Precious Metals 25%
U.S. Small Caps 25%
The reversal in sentiment as again added more equity exposure. Now it's up to prices to signal an intermediate term trend change. Let's see what happens over the coming weeks.
Sunday, March 15, 2009
Week of 3-15-2009
Timing Model = -1.0
40% long, 60% cash
Global allocation of long positions
MSCI EAFE Index 20%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 50%
Top U.S. Sectors
U.S. Semiconductor 3.5
U.S. Health Care 3.5
U.S. Pharmaceuticals 3.0
Composite Internet 2.5
Precious Metals 2.5
U.S. Mobile Telecommunications 2.5
U.S. Technology 2.5
U.S. Telecommunications 2.5
U.S. Biotechnology 2.5
Top Intl. ETFs
MSCI Malaysia Index Fund 1
MSCI Brazil Index Fund 1
FTSE China (HK Listed) Index Fund 1
Strategy 3
Money Market 50%
U.S. Long Bonds 50%
Strategy 4
U.S. Long Bonds 25%
Agriculture 25%
Precious Metals 25%
U.S. Small Caps 25%
40% long, 60% cash
Global allocation of long positions
MSCI EAFE Index 20%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 50%
Top U.S. Sectors
U.S. Semiconductor 3.5
U.S. Health Care 3.5
U.S. Pharmaceuticals 3.0
Composite Internet 2.5
Precious Metals 2.5
U.S. Mobile Telecommunications 2.5
U.S. Technology 2.5
U.S. Telecommunications 2.5
U.S. Biotechnology 2.5
Top Intl. ETFs
MSCI Malaysia Index Fund 1
MSCI Brazil Index Fund 1
FTSE China (HK Listed) Index Fund 1
Strategy 3
Money Market 50%
U.S. Long Bonds 50%
Strategy 4
U.S. Long Bonds 25%
Agriculture 25%
Precious Metals 25%
U.S. Small Caps 25%
Sunday, March 8, 2009
3-8-2009
Timing Model = -1.0
30% long, 70% cash
Global allocation of long positions
MSCI EAFE Index 20%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 50%
Top U.S. Sectors
U.S. Biotechnology 4.5
U.S. Health Care 4.5
Precious Metals 3.5
Composite Internet 3.5
U.S. Semiconductor 3.0
U.S. Oil & Gas 3.0
U.S. Consumer Goods 3.0
U.S. Technology 2.5
U.S. Pharmaceuticals 2.5
Top Intl. ETFs
MSCI Malaysia Index Fund 2
Latin America 40 Index Fund 1
MSCI Brazil Index Fund 1
Strategy 3
Money Market 50%
U.S. Long Bonds 50%
Strategy 4
U.S. Long Bonds 25%
Agriculture 25%
Precious Metals 25%
U.S. Large Caps 25%
My timing model continues to indicate bottoming and sentiment becomes significantly more pessimisic. I'm now at 30% long and there's every indication this allocation will increase in coming weeks.
Below are a couple charts showing how emerging market equities are performing against the U.S. and EAFE. 30% of my equity positions are now in Emerging.
30% long, 70% cash
Global allocation of long positions
MSCI EAFE Index 20%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 50%
Top U.S. Sectors
U.S. Biotechnology 4.5
U.S. Health Care 4.5
Precious Metals 3.5
Composite Internet 3.5
U.S. Semiconductor 3.0
U.S. Oil & Gas 3.0
U.S. Consumer Goods 3.0
U.S. Technology 2.5
U.S. Pharmaceuticals 2.5
Top Intl. ETFs
MSCI Malaysia Index Fund 2
Latin America 40 Index Fund 1
MSCI Brazil Index Fund 1
Strategy 3
Money Market 50%
U.S. Long Bonds 50%
Strategy 4
U.S. Long Bonds 25%
Agriculture 25%
Precious Metals 25%
U.S. Large Caps 25%
My timing model continues to indicate bottoming and sentiment becomes significantly more pessimisic. I'm now at 30% long and there's every indication this allocation will increase in coming weeks.
Below are a couple charts showing how emerging market equities are performing against the U.S. and EAFE. 30% of my equity positions are now in Emerging.
Sunday, March 1, 2009
3-1-2009
Timing Model = -1.5
20% long, 80% cash
Global allocation of long positions
MSCI EAFE Index 20%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 50%
Top U.S. Sectors
U.S. Biotechnology 3.0
U.S. Health Care 3.0
U.S. Telecommunications 3.0
U.S. Semiconductor 3.0
Precious Metals 2.5
U.S. Oil Equipment, Services & Distribution 2.5
U.S. Consumer Goods 2.0
U.S. Pharmaceuticals 2.0
Composite Internet 2.0
U.S. Oil & Gas 2.0
Top Intl. ETFs
MSCI Malaysia Index Fund 2
Strategy 3
Money Market 50%
U.S. Long Bonds 50%
Strategy 4
U.S. Long Bonds 25%
Agriculture 25%
Precious Metals 25%
U.S. Small Caps 25%
Pessimism continues to tilt my timing model towards more long exposure. I'm only 20% long right now, but this could change quickly depending on what happens this week. Also, Emerging Markets have made huge relative strength gains in my models recently. Of my long positions, 30% will be allocated to Emerging.
Technically, we're seeing signs of a classic bottom - see chart below. The positive momentum divergence illustrated here is one of the few useful technical indicators in forecasting bottoms. When downward momentum wanes as the market reaches lows for the cycle, AND sentiment is signaling extreme pessimism, bottoms usually form. Obviously it makes sense to wait until you see signs that a reversal is underway. Use whatever trigger you'd like, but it makes sense to keep tight stops in place in case you're wrong.
20% long, 80% cash
Global allocation of long positions
MSCI EAFE Index 20%
MCCI Emerging Markets Index 30%
Russell 3000 Index - U.S. 50%
Top U.S. Sectors
U.S. Biotechnology 3.0
U.S. Health Care 3.0
U.S. Telecommunications 3.0
U.S. Semiconductor 3.0
Precious Metals 2.5
U.S. Oil Equipment, Services & Distribution 2.5
U.S. Consumer Goods 2.0
U.S. Pharmaceuticals 2.0
Composite Internet 2.0
U.S. Oil & Gas 2.0
Top Intl. ETFs
MSCI Malaysia Index Fund 2
Strategy 3
Money Market 50%
U.S. Long Bonds 50%
Strategy 4
U.S. Long Bonds 25%
Agriculture 25%
Precious Metals 25%
U.S. Small Caps 25%
Pessimism continues to tilt my timing model towards more long exposure. I'm only 20% long right now, but this could change quickly depending on what happens this week. Also, Emerging Markets have made huge relative strength gains in my models recently. Of my long positions, 30% will be allocated to Emerging.
Technically, we're seeing signs of a classic bottom - see chart below. The positive momentum divergence illustrated here is one of the few useful technical indicators in forecasting bottoms. When downward momentum wanes as the market reaches lows for the cycle, AND sentiment is signaling extreme pessimism, bottoms usually form. Obviously it makes sense to wait until you see signs that a reversal is underway. Use whatever trigger you'd like, but it makes sense to keep tight stops in place in case you're wrong.
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