Friday, October 30, 2015

Wednesday, October 21, 2015

Tuesday, October 20, 2015

10/20/2015 Another Whipsaw

The Sector Model sold XLE and bought XLU before the close.

10/20/2015 Two Trades

The Full Model sold CPK and bought IPG.

The Sector Model sold XLU and bought XLE.

Each had a slightly favorable gap.

Monday, October 19, 2015

10/19/2015 Whipsaw

After losing for the day and dropping XLE for XLU, the final read for the day is back in XLE.

If there is a favorable gap in the morning I'll trade back to XLE.

10/19/2015 Sector Trade

The Sector Model sold XLE and bought XLU before the close.

Sunday, October 18, 2015

10/18/2015 Troubling Graphs

Sector Model
XLE
3.04%
Full Model
Date
Return
Days
DRQ
5/15/2015
-16.02%
156
INT
7/7/2015
-16.79%
103
BT
8/11/2015
-7.85%
68
TM
8/12/2015
-3.91%
67
MMP
9/4/2015
-0.73%
44
CPK
9/8/2015
13.12%
40
ED
9/17/2015
5.46%
31
WEC
9/30/2015
4.26%
18
UNP
10/7/2015
-0.48%
11
ORA
10/12/2015
3.27%
6
(Since 5/31/2011)
S&P
Annualized
9.88%
Sector Model
Annualized
19.30%
Full Model
Annualized
13.00%
S&P
Total
51.14%
Sector Model
Total
116.77%
Full Model
Total
70.84%
Sector Model
Advantage
9.42%
Full Model
Advantage
3.11%
Previous
2015
S&P
53.06%
-1.25%
Sector Model
142.84%
-10.74%
Full Model
101.13%
-15.06%

Apologies for the scarce reports lately.  A lot has been happening in the real world.
In any case, a few graphs.

Sector Model is hovering along the median regression line – annoyingly normal.




Next, the Sector Ratios, strongly in bearish territory.



I’ve mentioned the demographic problems we face. We have a lot of people retiring and a lot of aborted babies not taking their place in the workforce. The following chart is the standard deviation channels of the S&P/M1 money supply against the birthrate plus 46 years (i.e. the average age of the workforce).



The correlations are strong, which brings us to the bad news – minus another round of QE, the demographic forecasts show a sharp bear market from 2016 to 2019 – with an even steeper negative slope than the 2008 bear market.




My guess is that we’ll get more QE, but that’s ultimately up to Janet Yellen.

Tim

PS, the Sector Model is BARELY favoring XLU, and if there is a favorable gap in the morning I will take that trade.