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Market Update

Published on July 31, 2014 by in Market Comments

Today didn’t do much damage to our core indicators, however, two of the four components of our Market Risk Indicator are warning. A third component is very close to warning and it won’t take much to trigger it. The fourth component is further away and will take a sharp down day like today to make it warn. I just wanted to give you warning that there may be changes to the core portfolios tomorrow (Friday). I’ll update the site and post to Twitter and StockTwits by 3 PM Eastern what our allocations will be going into the close.

IF the risk indicator signals the hedged portfolio will go 50% long and use the other 50% to hedge with a mid term or dynamic volatility instrument like (VXZ, XVZ, or VIXM). If you don’t like volatility ETFs then a managed short fund like HDGE is an alternative. For those of you who use put options the strategy would be to stay 100% long, but cover your complete portfolio with intermediate term puts (3 to 6 months out).

The cash portfolio that recognizes our risk indicator will go 100% cash if it signals.

There is an update to Twitter Sentiment (now Momentum) for the S&P 500 Index at Trade Followers. The chart from that post is below.

140731spx2

 

 
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