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General Market Commentary
Add up the numbers in the dots in each indicator pane. A BULLISH state first occurs when the count reaches 5 out of 5. Can be used as a 'regime filter' to signal when the odds are in your favour of going long your favourite stocks or as a system to go long SPY or move to cash/bonds (AGG).
The Call For The Week of Oct 14th:
Rising bond yields and mortgage rates combined with Chinese selling of U.S. Treasury bonds are the reasons being blamed for the market's sell-off. Gold held up on safe haven buying. The S&P 500 closed 3.7 standard deviations below its 50 day average price, suggesting that a near term bounce could materialize. Keep some powder dry.
Systematic Model Portfolio with corresponding Chart #'s:
1. 0% SPY and/or
2. 0% HXT.TO (for Canadians)
3. 10% GLD (AlphaGold)
4. 20% TLT (AlphaBond -- wait in SHY)
5. 0% IWO (ValueMentum -- wait in SHY)
6. 25% SPY (Dual Momentum)
Each position is managed by a unique system, namely 1. and 2. AlphaDow, 3. AlphaBond, 4. AlphaGold, 5. ValueMentum and 6. Dual Momentum respectively.
Our main system turned BULLISH on the U.S. stock market in May of 2015 and BEARISH June 29th, 2018.
Bullish when 5 out of 5 are true (+1) for each condition:
1. $SPX is above 65wk MA
2. Advance/Decline Line is trending up (buying power)
3. $TRAN is trending up (Dow Theory confirmation)
4. Utility Average MA rises (interest rate sensitive Utilities lead)
5. Bonds are trending up (interest rates are low)
Average holding period 392.3 days. 0.58 round trip trades per year. Longest drawdown duration 50 months vs. 73 for buy & hold.
64% winning trades since 1980. Beats buy and hold with less volatility (0.53 MAR Ratio).
Past performance is no guarantee of future results. This is not investment advice, but is for educational purposes only. Consult your investment advisor for additional information regarding suitability, fees, expenses and short term trading costs.
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