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