5/7/2015 Lining up for a Top

Sector Model	XLE	-1.62%
Full Model	Date	Return	Days
JOY	12/8/2014	-16.46%	150
RS	12/11/2014	6.60%	147
AGCO	1/23/2015	15.72%	104
SSYS	3/3/2015	-42.31%	65
PWR	3/9/2015	-1.16%	59
BHE	3/31/2015	-3.80%	37
CBI	4/2/2015	3.78%	35
MTZ	4/9/2015	-6.00%	28
HUN	4/28/2015	2.24%	9
CCL	4/30/2015	-2.14%	7
(Since 5/31/2011)
S&P	Annualized	11.72%
Sector Model	Annualized	21.70%
Full Model	Annualized	18.51%
S&P	Total	54.63%
Sector Model	Total	116.58%
Full Model	Total	95.04%
Sector Model	Advantage	9.99%
Full Model	Advantage	6.79%
	Previous	2015
S&P	53.06%	1.03%
Sector Model	122.60%	-2.70%
Full Model	101.13%	-3.03%

 

My computer was having troubles for the past few weeks and I had to run the model on a borrowed one. Now that I have my hardware troubles solved I can get back into a little more detail than before.

No improvement for the year.  The market is barely up and the model is barely down. 2015 is a struggle, but most of the struggle was mean reversion back to the long term benchmark for the model:

 

No doubt about it: 2014 was a good year for the model – too good in fact. The model, like the market, sometimes does better than average, sometimes worse, but averages out to average (which is why they call it average).

The model is clinging to the benchmark like a scared monkey on a branch. Last year it stayed above benchmark. We’ll eventually have a year below benchmark. But the benchmark – the average – is the long term path.

PUBLISH	Bear
THRIFT	Bear
TOBACCO	Bear
AUTO	Bull
B2B	Bull
ELECTRNX	Bull
RAILROAD	Bull
COAL	Top
ENGCON	Top
OILFIELD	Top
POWER	Top

 

A look at the preferred industries for the full model shows a strong agreement with the Sector Model: this is a market top configuration.

Keep in mind that the model tries to stay 1 to 3 months ahead of the price action. So, a top on the model is a time to watch the market give a nice pop upward. I don’t time, but it’s interesting to watch others who do.

Tim