Sector Model XLU 36.59%

Large Portfolio Date Return Days
BBRY 7/16/2012 127.45% 208
SEAC 9/25/2012 38.43% 137
CAJ 9/25/2012 1.22% 137
CFI 10/31/2012 50.55% 101
RE 11/26/2012 13.96% 75
CGX 12/12/2012 4.26% 59
OKE 12/28/2012 14.29% 43
HTSI 1/14/2013 1.25% 26
NSC 1/28/2013 -0.29% 12
BOKF 2/4/2013 2.00% 5

S&P Annualized 7.38%
Sector Model Annualized 20.16%
Large Portfolio Annualized 35.78%


From: http://market-mousetrap.blogspot.com...g-to-time.html

Rotation: selling HTSI; buying HMC

The tea leaves here are still a curious mix. The Auto industry (for HMC) is a typical investment for a market bottom, not a market top.

The grocery industry (for HTSI) is more of a toppish investment.

Or in sector terms, exchanging a consumer staple (HTSI) for a business cyclical (HMC) is bullish.

The sector model, on the other hand, is parked in XLU (utilities), which is a typical safe haven for a bear market.

If the market seems confused, it’s not an illusion. It really does appear to be quite a mess.

In the South we’d call this market “Squirrely” because it is like a squirrel that keeps running back and forth across the road in total confusion until a car comes along to run it down.

HMC seems fitting, in that light.

In GENERAL, the Mousetrap is positioned for another bull market advance, while the Sector model is positioned for a correction or even a bear. Here’s the breakdown of their typical outperformance during business cycles:

Bottom CFI
Bottom BOKF
Bottom HMC
Bottom RE
Bull CAJ
Bull SEAC
Bull BBRY
Bull CGX
Bull NSC
Top OKE
Top HTSI
Bear XLU


Clearly the exchange of HTSI for HMC is hopeful.

The breadth and money-flow strength of XLU could be an indication of the supposed “rotation out of bonds” we keep hearing about in the news. If I were a bond investor, I’d be interested in dividends and safety. Of the nine sectors followed by the sector model, XLU would be the place for bond investors to flee.

Heck, I don’t know why people would be in bonds at all right now. XLU offers a good percentage better on dividend yield, and won’t implode when inflation begins to rear its head one of these days.

So, for now… bullish on stocks and bearish on bonds. Only OKE has anything to do with inflationary plays, and it’s tangential to inflation, at best. So, no obvious appeal for commodities.

Stocks, positive

Bonds, negative

Commodities, neutral

All I can say is that I’m glad I don’t do market timing. This would make me pull out my hair.

Tim