4-3-2013 Comments

My portfolio seems stalled. Two days ago I did some selling (GEOS, AWAY and AL). I remain in VRX, CBI. V, CELG and CVLT; about 50% invested.

The Market Exposure Model remains at 75% invested and we haven't seen any buy or sell signals for a couple of weeks. The distribution count remains high at 4 with no potential for a drop off for a couple of weeks. This probably means that we will see some sell signals on any future distribution day.

I don't really know what is in store for us going forward but I note Pascal's comments about QE and perhaps the madness will continue until Bernanke stands down. I don't see the kind of volatility that usually accompanies significant market tops but we live in strange times. The small caps, NASDAQ, IBD 50, IBD 85-85 indices are definitely lagging. Jerry is away and I don't know what the leaders index looks like but I think it could be lagging also. It seems that the S&P and Dow are the leaders currently, a situation I don't find particularly conducive to CANSLIM type investing. Essentially that is why I own V now.

The chart below is a relative strength of two modeled portfolios based on NASDAQ and S&P500 MarketSchool exposure count models. Both models buy and sell the NASDAQ (S&P) indices at the recommended exposure count. I then compute a NASDAQ portfolio relative strength. The NASDAQ portfolio RS is significantly lagging. I marked prior times when the NASDAQ modeled portfolio was lagging. In none of those times was it a great time to be in the market.

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