|
Sector Model
|
XLU
|
36.59%
|
|
|
Large Portfolio
|
Date
|
Return
|
Days
|
|
BBRY
|
7/16/2012
|
127.45%
|
208
|
|
SEAC
|
9/25/2012
|
38.43%
|
137
|
|
CAJ
|
9/25/2012
|
1.22%
|
137
|
|
CFI
|
10/31/2012
|
50.55%
|
101
|
|
RE
|
11/26/2012
|
13.96%
|
75
|
|
CGX
|
12/12/2012
|
4.26%
|
59
|
|
OKE
|
12/28/2012
|
14.29%
|
43
|
|
HTSI
|
1/14/2013
|
1.25%
|
26
|
|
NSC
|
1/28/2013
|
-0.29%
|
12
|
|
BOKF
|
2/4/2013
|
2.00%
|
5
|
|
S&P
|
Annualized
|
7.38%
|
|
|
Sector Model
|
Annualized
|
20.16%
|
|
|
Large Portfolio
|
Annualized
|
35.78%
|
Rotation: selling HTSI; buying HMC
The tea leaves here are still a curious mix. The Auto industry (for HMC) is a typical
investment for a market bottom, not a market top.
The grocery industry (for HTSI) is more of a toppish
investment.
Or in sector terms, exchanging a consumer staple (HTSI) for
a business cyclical (HMC) is bullish.
The sector model, on the other hand, is parked in XLU
(utilities), which is a typical safe haven for a bear market.
If the market seems confused, it’s not an illusion. It really does appear to be quite a mess.
In the South we’d call this market “Squirrely” because it is
like a squirrel that keeps running back and forth across the road in total
confusion until a car comes along to run it down.
HMC seems fitting, in that light.
In GENERAL, the Mousetrap is positioned for another bull
market advance, while the Sector model is positioned for a correction or even a
bear. Here’s the breakdown of their
typical outperformance during business cycles:
|
Bottom
|
CFI
|
|
Bottom
|
BOKF
|
|
Bottom
|
HMC
|
|
Bottom
|
RE
|
|
Bull
|
CAJ
|
|
Bull
|
SEAC
|
|
Bull
|
BBRY
|
|
Bull
|
CGX
|
|
Bull
|
NSC
|
|
Top
|
OKE
|
|
Top
|
HTSI
|
|
Bear
|
XLU
|
Clearly the exchange of HTSI for HMC is hopeful.
The breadth and money-flow strength of XLU could be an
indication of the supposed “rotation out of bonds” we keep hearing about in the
news. If I were a bond investor, I’d be
interested in dividends and safety. Of
the nine sectors followed by the sector model, XLU would be the place for bond
investors to flee.
Heck, I don’t know why people would be in bonds at all right
now. XLU offers a good percentage better
on dividend yield, and won’t implode when inflation begins to rear its head one
of these days.
So, for now… bullish on stocks and bearish on bonds. Only OKE has anything to do with inflationary
plays, and it’s tangential to inflation, at best. So, no obvious appeal for commodities.
Stocks, positive
Bonds, negative
Commodities, neutral
All I can say is that I’m glad I don’t do market
timing. This would make me pull out my
hair.
Tim
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