Saturday, March 23, 2019

3/23/2019 About that Yield Curve


Sector Model
XLE | XLU
-1.38%
Full Model
Date
Return
Days
BT
8/11/2015
-49.75%
1320
TMK
11/23/2015
36.53%
1216
NVR
12/16/2015
67.66%
1193
NVR
2/22/2016
74.72%
1125
AMWD
3/17/2016
11.16%
1101
CASY
5/12/2016
11.14%
1045
MFC
9/1/2016
36.73%
933
SFM
9/8/2016
14.89%
926
CFFN
9/12/2016
4.81%
922
FOSL
5/11/2017
-3.88%
681
HIBB
7/25/2017
65.65%
606
FOSL
7/27/2017
25.72%
604
HZO
8/1/2017
21.68%
599
BCE
5/31/2018
13.63%
296
DFS
10/21/2018
-4.26%
153
CL
10/29/2018
10.39%
145
ATVI
11/23/2018
-7.94%
120
KMI
12/31/2018
27.36%
82
ALLE
2/20/2019
-0.85%
31
AMAT
3/5/2019
4.70%
18
(Since 5/31/2011)
S&P
Annualized
9.80%
Sector Model
Annualized
13.99%
Full Model
Annualized
12.32%
S&P
Total
107.59%
Sector Model
Total
178.03%
Full Model
Total
147.86%
Sector Model
Advantage
4.18%
Full Model
Advantage
2.52%
Previous
2019
S&P
85.79%
11.74%
Sector Model
129.27%
18.44%
Full Model
122.54%
11.38%



So, after 11 years of waiting, we finally got an inverted yield curve.

Bear market?

Well, not quite.  An inverted yield curve usually PRECEDES a bear market, but sometimes by a couple of years.

I’ve been having computer troubles of late, and now have a backup computer – which I’m restoring data to.  I had limited internet access the other day and couldn’t report the switch to XLE and XLU.

To make matters worse I wasn’t able to get into the XLU position and doubled down in XLE.  So while the model is reporting XLE and XLU the returns posted reflect that I’m in XLE.

I’m still planning to drop reporting on the Sector Model at some point, not that the Full Model is functioning on par with it.

As for the broad market, the Fed has blinked, but they haven’t panicked yet.  They were slightly late to panic in 2001, and a little early in 2008, but there’s no point in panicking until they do, and barely a point to panic even then. 

Tim








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