Mousetrap 7/6/2011

[Timothy Clontz]

This is the first report (on this site) of my "Mousetrap" portfolio. The methodology used in this portfolio is broad market timing agnostic. Instead, the portfolio examines volume and breadth divergences in 98 industry groups and selects fundamental stocks within technically selected industries.

The "Mousetrap" is at present a live beta test. The fundamentals have been backtested, and the technicals have been backtested. But it was impossible to backtest them both together. The target return is 30% or better. While not as good as the Robot, it could, if successful, offer a possible strategy hedge.

When fully loaded, the portfolio will rotate around 10 stocks. As of today it is up to five.

I'm being a guinea pig with my own money here:

On 5/31 I bought BKI at 25.11 -- now up 11.03%
On 6/22 I bought CFI at 8.29 -- now up 16.54%
On 6/27 I bought SE at 26.36 -- now up 4.84%
On 7/5 I bought AWR at 35.02 -- now up .03%
On 7/6 I bought CLH at 106.30 -- now up 1.89%

I'll try to keep this updated in as close to real time as possible (i.e. within a few minutes of any given trade). If it works in real time, we'll all find out together.

Tim

PS:

On the sector rotation model the long and short sectors (depending on your timing source) are...

XLK (technology) if long, or
short XLE (energy) if short