Sector Model
|
XLB
|
0.00%
|
|
Large Portfolio
|
Date
|
Return
|
Days
|
SR
|
6/2/2014
|
-17.89%
|
180
|
ESI
|
8/4/2014
|
-41.93%
|
117
|
STRA
|
8/18/2014
|
28.55%
|
103
|
KFY
|
9/29/2014
|
4.14%
|
61
|
IQNT
|
10/6/2014
|
49.63%
|
54
|
EDU
|
10/27/2014
|
-1.03%
|
33
|
PLT
|
11/6/2014
|
0.21%
|
23
|
BKE
|
11/10/2014
|
3.41%
|
19
|
CPSI
|
11/17/2014
|
-4.52%
|
12
|
GRMN
|
11/24/2014
|
0.40%
|
5
|
(Since 5/31/2011)
|
|||
S&P
|
Annualized
|
13.07%
|
|
Sector Model
|
Annualized
|
25.96%
|
|
Large Portfolio
|
Annualized
|
22.92%
|
Rotation: selling IQNT; buying KLIC.
Note: in order to keep the annualized tracking correct I’m measuring
the returns for GRMN from 11/24/2014 instead of 11/28/2014. That basically negates the cash position I
was forced into when AP gapped down below my buy limit order and still failed
to hit.
The Sector Model switched to XLB before the close on
Friday. I made the change in my own
account. Steve’s STAR
sector fund (which tracks my model) is still in XLF:
The sector ratios are showing a late bull configuration:
Keep in mind that the model is positioned a month ahead, so
even when it shows a top the market can continue to spike.
The collapse in XLE is a setup for a potential buy point
that could come during the next quarter.
Right now XLE is still in the “avoid” position for the model. I don’t routinely mention the “avoid”
position because I don’t want to confuse it with a “short” position. The model does not time the market, and it
therefore has no short positions. The “avoid”
position simply means that it is too volatile to be used by the model. Sometimes I’ll have a stock that slips into
that position and it skyrockets.
Sometimes I’ll watch a sector in that position have a devastating day
like this past Friday. Since the model
cannot use the information, it avoids it rather than shorting it.
I should mention, though, that the market typically does
quite well when XLB is the choice. Basic
Materials are much in demand when the economy heats up, and we typically have
some positive surprises in the news during these times. Let’s hope it can stay in XLB for a while.
Tim