Sector Rotation: (if long, XLU; if short, XLF)

[Timothy Clontz]

I was looking at the wrong numbers on the Robot yesterday. Although not an ideal day to enter the position, these would be the correct numbers if converted from IWM to XLP.

[Andrei]

Thanks Tim.

I have yet to go through your explanations on sector rotation model, but does it play out as expected, i.e. your call for 1393.28 on 6/8/2011? This is obviously just a projection, so I don't hold my breath for it to be hit on that date, or even that month.

[Timothy Clontz]

Andrei,

The only thing I was noting was that the average returns for the present relative strength between sectors is still (at least late stage) bullish.

Right now the average returns would take us to 1439.01 on 6/16. Will we actually hit that?

I doubt it, because this was an artificial bull market propped up by Fed steroids. I'm tempted to call it the "bulloney market".

My favorite short is XLP and my favorite long is XLU. I see that XLP is crushing XLU right now...

Averages are only averages.

My other models are bearish. My yield ratio model is SERIOUSLY bearish. But it's ALSO skewed by the Fed action.

In other words, I don't think ANY average models apply to the present state of the market.

Tim